Vanguard, Columbia Funds Stop Lending to Short Sellers
September 25, 2008
Responding to the Securities and Exchange Commission’s temporary ban on short selling in hopes of helping to stabilize the markets, Vanguard and Bank of America’s Columbia Funds have stopped lending securities to such traders, The Boston Globe reports.
“We have decided to stop new lending activity for now,” said a Vanguard spokesman, “until such time investors regain confidence in the market and the volatility abates.”
Columbia Funds Chief Investment Officer Colin Moore said that while the company engages in securities lending to reduce fund costs, suspending this for a while is a better alternative since financial services holdings in the funds have, of course, been dragging their value down.
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