My post actually referred to changing regulatory and reporting environments that are evolving to challenge past practices.
Four of the largest US participants self-deal by having both their own funds lending, but also using their affiliated lending agent (forced reporting since 2017) as well as affiliated brokers (unreported) and affiliated MMF (unreported). The latter two seem highly probable but are not disclosed. The four are State Street, Fidelity, Goldman Sachs and Vanguard. They did not even report lending agents until forced by 2017 legislation. Three others are more subtle about this by mostly acting for others i.e. State Street, BNY Mellon and Brown Brothers Harriman. We may safely assume that under current the US administration nobody will look at this, much less challenge it. This article becomes quite technical but it does lay out a pretty clear case for the net detriment to total returns tending to result from current securities lending practices.
SSRN-id3081123.pdf
However the EU is quite different because they ARE challenging these practices.
62946b2e-1a36-3bd9-9515-f48dfda43b2a.
That is a paywalled link to a recent illustrative FT article. I cannot post it openly here, but it points out how specifically the EU is attacking Securities Lending practice.
None of this suggests that following S&P inclusion TSLA net volatility will increase because of reduced participation by institutional investors. Black Rock first and foremost will fight with all their power to preserve their income streams, with the only slightly less connected ones, Fidelity, Goldman and Vanguard fighting with them. Obviously the third-party processing powers will do all they can to remain invisible outside the cognoscenti.
However, following S&P inclusion and the coming debt ratings improvements we also have both GF-3 and GF-4 which themselves will be powerful impetus for non-US institutional investor action. That non-US portion is very unlikely to participate in securities lending even through their favored US intermediaries. Specifically Deutsche, Commerzbank and nearly every major sovereign risk fund will be out of this practice. It is clear that until very recently many non-US regulators have turned blind eyes. Just as with other commercial issues (e.g. Boeing, Huawei) some US administration positions are engendering opposition rather than support.
So, in TSLA we have one of those rare species in which support outside the US is defiantly stronger than it is in the US. US attacks on TSLA are not well received, especially when they involve securities manipulations that are deemed illegal or, at best, suspicious by the EU and others.
Thus I argue that through S&P inclusion of TSLA, as symbol of maturity, quite a large body of investors will begin to participate that are distinctly different from the big US mutual funds and others. Those will have the net effect of reducing available float for lending.
There is my logic. I'm confident of it. There are many more research and opinion articles on the subject.
I am often wrong! Please argue if you think I'm off base.
Lastly, my belief is that some substantial part of current buying activity is the direct result of forthcoming GF-3 and GF-4 as demonstrations of major global support. For support of this thesis there are historical precedents recent and older. This topic becomes very long. In short: watch TSLA Supercharger expansions to see correlation to Belt and Road Initiative. As that effect grows more and more true 'buy and hold' non-US investors will rise rapidly.
On this one I am NOT wrong!! The evidence was overwhelming the day GF-3 began and repeated when GF-4 was so quickly begun.