Press Release

Stock Lending: Statement by the Investment Management Association

19 September 2008

The IMA considers that short selling of bank shares is neither the sole nor the principal reason for the falls in the price of certain shares in recent weeks.  It also notes that the practice of stock lending makes an important contribution to the orderly operation of the market.

However in view of the present conditions, it is imperative that confidence in the markets and the financial system is maintained.  

It therefore invites its members to consider carefully the implications of any participation in the lending of stock in UK banks, so long as current conditions prevail.  Members should weigh up the need for an orderly market and the risk to their client's interests should the lent stock be used against them.  Where stock is lent under arrangements entered into by their clients, managers should consider drawing their clients' attention to this statement.

Robert Jenkins, Chairman of IMA said, "At such times confidence is key.  We believe this may be helpful."

Richard Saunders, Chief Executive of IMA, said: "We believe our statement complements what the FSA said last night on short selling and will help to achieve their objectives."