Are you sure JD? When an entity borrows a stock, all legal...

Are you sure JD? When an entity borrows a stock, all legal rights (voting, dividends, etc) are inherited by the owner of the stock. So I don't think the lender has to include any lent stock as part of their net holding because legally, they are not the holder of the lent stock.

Entity A bought 100 shares in XYZ, and then proceed to lend 50 shares to Entity B. Entity B short sells 30 shares on the market (say to Entity C) but keeps the remaining 20 borrowed stock unsold. At that point in time, the total ownership is A with 50 shares, B with 20 shares and C with 30 shares. If A decides to recall the lent stock, B will have to purchase 30 shares (on or off market, say from Entity D) and return a total of 100 shares back to A. At which point, A will have 100 shares, B will have no holding, C will have 30 shares and D will have whatever holding minus the 30 shares sold to B.

If A has to include the lent stock as part of its holding, then that parcel of share will be double-counted since B and C are also legal owners of the 20 and 30 shares respectively.

618