Comparison of Canadian and U.S. rules for securities lending


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Canada:

B4 advises financial institutions to “ensure that securities lending activities are conducted in a safe and prudent manner” and makes no mention of the purpose.

United States:

Regulation U requires execution of a purpose statement for margin loans against stock except for loans extended under paragraph (c)(2) of the section, and has sections on “Amendment of purpose statement,” and “Special purpose loans to brokers and dealers,” with 10 subsections dealing with interpretations on “Determination and effect of purpose of loan,” “Reliance on ‘good faith’ on statement of purpose of loans,” and  “Accepting a purpose statement through the mail without benefit of face-to-face interview.”

 

Canadian-Banking-regulation