Jennifer Han, head of regulatory affairs at the Managed Funds Association, the Washington-based trade body that represents hedge fund managers, said the SEC’s proposals were “misguided” and could create more meme-stock style volatility “leading to situations similar to the GameStop market event”.
Lenders and lending agents will together pay about $375m in initial costs and $140m annually thereafter to comply with the proposed reporting requirements, according to the SEC.īut the drastic changes in reporting and disclosure standards planned by the SEC have triggered opposition from hedge funds and other key players in securities lending, including BlackRock, the world’s largest asset manager.ĭavid Einhorn is among the hedge fund managers to refuse to talk about shorting strategy amid the meme stock backlash © REUTERS The SEC has proposed extensive reforms to securities lending arrangements which allow hedge funds to pay a fee to borrow stocks and bonds in order to bet that an asset will fall in value - the process known as “short selling”. Gary Gensler, the SEC chair, said in November that it was time to bring securities lending “out of the dark”.
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