Share blocking and securities lending

Securities lending is important in today’s financial markets, because it provides liquidity in the market. Robeco receives a fee for a security that has been lent and this directly benefits our clients. If securities have been lent, Robeco is not able to vote at the shareholders’ meeting. For specific, mostly controversial meetings, Robeco can decide to recall its shares. This policy helps Robeco realize returns from securities lending and preserve voting rights.

In a number of markets worldwide, shares are blocked for sale during a certain period of time if the voting rights attached to the shares are executed. Robeco may decide not to vote if the shares will be blocked because it is not in the best interests of our clients. The blocking of shares limits the trading possibilities of the portfolio managers and may, therefore, also harm the performance of the investment portfolio. Share blocking also limits the possibilities of lending the shares to a third party, which may reduce the lending revenues. All these factors mean that voting may not be in the best interests of clients if it means that the shares will be blocked. The possible negative impact on the performance and lending revenues is weighed up against the (long term) benefits of voting. Only if both the portfolio managers and the securities-lending specialists agree, will the votes be cast and the shares blocked. If share blocking applies, voting will be carried out for a maximum of 80% of the shares (and these shares will therefore be blocked).