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

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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.”


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Michael Klein
Michael Klein Editor Pinnacle Media Group Ltd. PO Box 1365, Grand Cayman, KY1-1108, Cayman Islands T: 345-326-1720C: 345-815-0064 E: Michael is a financial journalist and copywriter.  In the past he has been responsible for the Risk Management and Corporate Finance sections of a British monthly Corporate Treasury publication.  He has written various financial handbooks, notably on European Banking and Cash Management and the Debt Capital Markets.   In addition he has worked as a copywriter for banks and investment funds and served as corporate communications consultant to US and European blue chip companies.   Michael holds an MA in Political Science and International Law from the University of Bonn in Germany. 

Pinnacle Media Ltd

Cayman Financial Review is the only magazine which promotes the Cayman Islands financial services industry at a local and international level. Produced by Cayman’s leading printing and publishing company Pinnacle Media Ltd, the Cayman Financial Review is published quarterly and is distributed in print and online to organisations and associations worldwide as well as at key financial conferences.

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