GLOBAL - State Street Global Advisors (SSgA) has discontinued its securities lending programme across a range of funds "in the best interests" of its shareholders.
In a stock exchange announcement published this week the firm said it had also begun closing any open positions within the securities lending programme and would scrap redemption fees from its Ireland domiciled Ucits fixed income funds funds from July 13.
Portfolios affected include the SSgA World Broad Investment Grade Index; World Government Bond Index; EMU Government Bond Index; UK Government Bond Index; US Corporate Bond Index; US Government Bond Index; Euro Corporate Bond Index; Euro Broad Investment Grade Bond Index; and EMU Government Long Bond II funds.
The statement said: "The directors are of the view that the discontinuance of the securities lending programme is in the best interests of shareholders.
An SSgA spokeswoman added: "SSgA has begun notifying clients invested in its Irish UCITS fixed income funds--State Street Global Advisors Fixed Income Plc- that it is removing redemption fees put in place in March 2009 and discontinuing the funds' securities lending programme. We are proceeding with an orderly closure process for the securities lending programme.
"Redemption fees had been instituted back in March 2009 to protect the funds' shareholders in light of significant market events impacting the securities lending programme of some of the funds.
"Once certain assets acquired with the cash collateral received from lending activities have been liquidated, the redemption fee will no longer be necessary to protect the interests of non-redeeming shareholders."
John Arnesen, senior business consultant at securities financing data provider Data Explorers, said: I don't think this is anything sinister. It appears to be a corporate decision and a reflection of fixed income markets in general."
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