CIBC Mellon Global Securities Services Co. says it is now lending mutual fund assets for Talvest Fund Management Inc. as part of its securities lending program.

Until recently, Canadian mutual fund companies were excluded from participating in securities lending, putting them at a disadvantage relative to their counterparts in the United States.

“These new rules help put Canadian mutual funds on a more level footing with U.S. funds,” said James Slater, senior vice president, capital markets, CIBC Mellon. “The Talvest opportunity represents what many expect to be a growing trend as mutual fund companies enter the lending market because it is low risk and can provide incremental income and boost portfolio returns.”

Talvest is one of the first mutual fund companies in Canada to participate in the lending of mutual funds. “We are anxious to take advantage of this new legislation allowing us to participate in securities lending as it will provide our funds new revenue opportunities for the benefit of unitholders,” said Richard Duval, senior vice president and CFO, Talvest. “We’re also very pleased that CIBC Mellon provides a lending program that suits our needs.”

Securities lending involves the temporary loan of a security to an acceptable borrower versus acceptable collateral for a negotiated fee. The Canadian securities lending market is well established and as of May 2, mutual funds are permitted to participate in securities lending based on amendments made to National Instrument 81-102-mutual funds.