Correct, Pension Fund A's custodian lends to Bank B, which lends to Bank C, whose hedge fund client goes out and sells short. Gross short is 2 shares. Net short is 1 share. Only one share needs to be covered by buying in the market for this example. The ASX publishes a daily securities lent and a securities borrowed report, which splits the quantities into the net and gross amounts. As you would expect, gross and net are highly correlated, though not perfectly. You can expect that a lot of shares would need to be covered for GXY.
It is worth noting that only the registered holder can vote, so Pension Fund A has to recall the loan if it wants to vote. This can create a tight borrow market and induce a short squeeze up to the record date for the AGM.
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Correct, Pension Fund A's custodian lends to Bank B, which lends...
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