NETHERLANDS - Dutch asset manager PGGM has stopped lending securities of all foreign financial institutions, IPE has learnt, following increased Dutch criticism of the practice of stock lending.
The decision, made on Monday evening, is in addition to existing PGGM policy not to lend stocks of Dutch-listed companies - among which are financials.
"[Monday] we decided that we will also stop the securities lending for foreign financials," the spokesman for PGGM - the newly-created asset manager of the second largest Dutch pension fund PFZW - told IPE in an interview.
It is a departure for the fund manager which said on Friday it would continue to lend shares: "Putting a stop to stock lending would have a disrupting effect on the market," the spokesman said on Friday.
That said, the company will continue the lending of all other shares as "in our view this aids the liquidity in the market", concluded PGGM.
APG - the newly-separated asset manager of the largest Dutch pension fund ABP - also stopped lending the stock it holds in some European and American financial institutions facing "downward pressure" on their share prices last Friday.
A spokesman told IPE this week the organisation sees no reason to stop the stock lending on all shares, despite earlier criticism suggesting stock lending constitutes extreme short-term thinking and while returns are not viable.
PME, the third-largest Dutch pension fund, commented today it has not made any significant changes to its stock and bond lending.
"We have, of course, complied to the request of [financial regulators] AFM/DNB to stop the lending of shares of financial companies that are listed on Euronext," said a spokeswoman.
The Dutch regulators AFM and DNB announced on Monday morning they would ban naked short-selling of financial stocks - the practice of selling a stock short without first borrowing the shares or ensuring the shares can be borrowed - for the next three months to increase the stability of financial markets.
The Netherlands was the latest of a number of European countries to have clamped down on the practice of selling borrowed shares in hopes of buying them back cheaper and pocketing the difference, as Belgium, France, Germany, Switzerland and the UK have all made similar moves.
If you have any comments you would like to add to this or any other story, contact Carolyn Bandel on +44 (0)20 7261 4622 or email email@example.com