Until recently, Canadian mutual fund companies were excluded from participating in securities lending, putting them at a disadvantage relative to their counterparts in the United States. That changed on May 2, 2001.
“These new rules help put Canadian mutual funds on a more level footing with US funds,” said James Slater, senior vice president, capital markets, CIBC Mellon. “The Talvest opportunity represents what many expect to be a growing trend as mutual fund companies enter the lending market because it is low risk and can provide incremental income and boost portfolio returns.”
Securities lending involves the temporary loan of a security to an acceptable borrower against acceptable collateral for a negotiated fee.
CIBC Mellon is a 50-50 joint venture between Canadian Imperial Bank of Commerce and Pittsburgh-based Mellon Financial Corporation and has approximately $500 billion in assets under management.