Japan's Government Pension Investment Fund is suspending stock lending.
The ¥161.8 trillion ($1.5 trillion) pension fund announced in a news release Tuesday that it's suspending the practice because it creates a temporary transfer of ownership rights to the borrower, which creates a gap in the period in which the stock is held by GPIF. The practice could be seen as inconsistent with GPIF's stewardship responsibilities.
In addition, the current method of stock lending lacks transparency, GPIF said.
GPIF may reconsider the stock lending scheme in the future "if improvements are made to enhance transparency and address the inconsistencies," the news release said.
GPIF currently has no plans to suspend its lending of debt securities.