UK - Trustees are largely unaware of the potential conflicts of interest and risk involved with securities lending, a former governor of the International Corporate Governance Network has claimed.
He said: "The securities lending activity has been largely ignored because it was sold to trustees as a risk free activity and it was kept deliberately invisible."
However, he explained events over the past year events have shown there are problems with securities lending - both related to counterparty risk and to the reinvestment of collateral.
In addition, he said there was also a risk due to the potential bankruptcy of the intermediary involved in the securities lending transaction.
He said: "In the US courts decided lent stocks are not attachable to any bankruptcy procedure, but I do not believe the same legal principles apply in the UK.
According to Clearfield, there was no evidence so far that securities lending and short selling had a significant role in the crisis.
He added: "The process is so opaque and there is potential for abuse, so it is very difficult to conclude anything at this stage."
Mark Evans has been appointed as a director at Independent Trustee Services (ITS) to lead trustee appointments in London.
The Pension Protection Fund (PPF) is consulting on changes to the actuarial assumptions it uses in valuations in a bid to better reflect the bulk annuity market, with schemes set to move into surplus on aggregate.
Private sector defined benefit (DB) schemes were 96.3% funded on a Pension Protection Fund (PPF) compensation basis at the end of July, according to the lifeboat fund's monthly index.
Conduent has completed the sale of its actuarial and human resource consulting business to private equity investor, H.I.G. Capital.