AFFILIATED AGENTS, BOARDS OF DIRECTORS, AND MUTUAL FUND SECURITIES LENDING RETURNS. (December 2014)

• Record Type: Journal Article
• Authors: Adams, John C.; Mansi, Sattar A.; Nishikawa, Takeshi
• Is Part Of: Journal of financial research. Volume 37:Number 4(2014:Winter)
• Page Start: 461
• Page End: 494
• Publication Date: 2014-12
• Subjects: Finance -- Periodicals; Investments -- Periodicals; 332
• DOI: 10.1111/jfir.12043
• Languages: English
• ISSNs: 0270-2592

Abstract

<abstract abstract-type="main" xml:lang="en"> <title>Abstract</title> <sec id="jfir12043-sec-0001" sec-type="section"> <p>Using a manually collected U.S. index mutual fund sample, we find that funds with sponsor‐affiliated lending agents have lower annual returns on lent securities and that securities lending returns are significantly higher when funds administer their own lending programs. We also document that multiple board of director appointments, more director fund ownership, higher board independence, and lower excess director compensation are associated with higher lending returns. Overall, the evidence has implications for mutual fund boards as they consider lending proposals and for future regulatory actions.</p> </sec> </abstract>