Voting rights

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GMSLA Anatomy


UK money Markets Code
6.3 It is accepted good practice in the market that securities should not be borrowed solely for the purpose of exercising the voting rights at, for example, an AGM or EGM. Lenders should also consider their corporate governance responsibilities before lending stock over a period in which an AGM or an EGM is expected to be held.

2010 GMSLA: Full wikitext · Nutshell wikitext | GMLSA legal code
Pledge GMSLA: Hard copy (ISLA) · Full wikitext · Nutshell wikitext |
1995 OSLA: Full wikitext · Nutshell wikitext | GMSLA Netting
Let me Google that for you: Guide to equity finance | ISLA’s guide to securities lending for regulators and policy makers

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The Bank of England’s UK money Markets Code has the following (see right) to say on voting rights. You aren’t meant to do it.

Other views may prevail in other markets, but the main reason for borrowing stocks is (a) to short them; or (b) to clean up your balance sheet and optimise your funding, you shouldn’t be in the market for stock borrows if you want to vote on securities. If you want to vote on securities, you buy them. (That of course sends a price trigger into the market that borrowing and holding stocks does not).