World’s largest pension fund to suspend stock lending to short sellers

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World’s largest pension fund to suspend stock lending to short sellers

Chiyoda, Tokyo-based Government Pension Investment Fund (GPIF) of Japan, the largest pool of retirement savings across the globe, had issued a public statement on Tuesday, the 3rd of December 2019, saying that the GPIF of Japan had stalled stock lending to short sellers for an indefinite period of time, adding it had inclined a ban on stock short-selling as part of its responsibilities as a long-term investors, dubbing the practice inconsistent with its stewardship mandates.

In point of fact, the latest move of Japan’s Pension Investment Fund came as a major blow to the short sellers, who were almost entirely relying on securities’ lending in a bid to bet against the companies and had been facing countermeasures in a number of countries.

Meanwhile, adding that the short-selling schemes lacked transparency, the Japan’s Government Pension Investment Fund said in a statement in its website on Tuesday (December 3rd), “The current stock lending scheme lacks transparency in terms of who is the ultimate borrower and for what purpose they are borrowing.

” Nonetheless, the latest ban on short-selling activities would affect shares worth of $391.20 billion in Japan’s GPIF’s foreign equities portfolio, Tuesday’s (December 3rd) GPIF announcement revealed, while as an immediate response, Elon Musk, Chief Executive of Tesla Inc., a long-cherished target for the short-sellers, had been the first to applaud over the GPIF move saying, “Bravo, right thing to do! Short selling should be illegal. ”