25 October 2011
New York
Reporter: Anna Reitman
Securities Lending default image

IROs negative on short selling - BNY Mellon survey


Some 64 per cent of investor relations offices (IROs) within companies globally think short selling has a negative impact on the trading environment, according to a recent BNY Mellon survey.

In terms of equity trading, short selling is perceived to have a negative impact across the globe by 50 per cent of companies worldwide and 32 per cent believe that hedge funds adversely affect the markets.

Developed as a benchmarking tool for BNY Mellon’s depositary receipt clients, the survey, Global Trends in Investor Relations, looks at how publicly traded companies are managing their investor relations practices and features input from 650 companies across 53 countries. Respondents cover the range of market cap and sectors, including financials, industrials, consumer, technology and healthcare.

The most vocal IROs who have a negative view of short selling on equity trading are in North America. Although fewer IROs in EEMEA, at 42 per cent, and Western Europea, at 45 per cent, share the same view, they are still critical while IR executives in frontier markets are less concerned, at 31 per cent.

A significant portion of IROs also have “definitive opinions” on the issue of regulatory oversight over short selling, at 57 per cent of respondents, even when they indicated the practice does not have a negative impact on markets.

In terms of regional breakdown, North America is where the highest number of IROs think there should be more regulatory oversight, followed by Asia Pacific, Western Europe and Latin America. On a market cap basis, a considerable majority of micro cap IROs, at 67 per cent, would like to see regulations placed on short selling.

At the same time, hedge funds remain an integral component of global IR activities with around 92 per cent of companies worldwide meeting with hedge funds, yet the percentage of a firm’s meetings devoted to hedge funds (21 per cent) has declined slightly since 2010 (24 per cent) but remains above 2009 levels (16 per cent). Micro caps devote less time to meetings with hedge funds, at 12 per cent.

More news
The latest news from Securities Lending Times
Join Our Newsletter

Sign up today and never
miss the latest news or an issue again

Subscribe now
J.P. Morgan and Citi collaborate on truePTS post-trade platform
15 December 2017 | New York | Reporter: Zsuzsa Szabo
The New-York-based startup processes ecosystem for the global $700 trillion derivatives market
SIFMA: US market requires improved CCP access
15 December 2017 | Washington DC | Reporter: Jenna Lomax
The Dodd-Frank Act has increased the need for US firms to have access to non US swaps trading venues and central counterparties, according to paper by FIA and SIFMA
France raises spectre of European financial transactions tax
15 December 2017 | Paris | Reporter: Jenna Lomax
French President Emmanuel Macron and several ministers have dismissed concerns over the negative effect of an EU financial transactions tax on securities lending revenue
Vekaria exits Credit Suisse
14 December 2017 | Dublin | Reporter: Zsuzsa Szabo
Head of Credit Suisse's Dublin branch Manish Vekaria has left the bank
Cerberus hires new managing director
14 December 2017 | New York | Reporter: Jenna Lomax
Kimmel was previously global head of prime services at Cantor Fitzgerald
SMEs to face new research costs under MIFID II
14 December 2017 | Frankfurt | Reporter: Zsuzsa Szabo
Research services for SMEs will no longer be free of charge when MiFID II comes into force on 3 January 2018
Hedge funds in sprint finish for record-breaking returns in 2017
14 December 2017 | London | Reporter: Drew Nicol
Hedge funds are on track for their best annual revenue since 2013 with average returns of 7.7 percent, according to eVestment research