Lending stock to yourself? Why not?

The creation of all those long/short funds have really made borrowing stock a pain in portfolio. Stock lending has become so hard it gave rise to a weird little black market that spawned some regulatory action a while back. So how's this for an idea: Why not lend stock to yourself? AllAboutAlpha.com writes about Enhanced Index Products Company of Hong Kong, which uses its index fund as a source of stock to create short positions in its hedge fund. The firm sees this as an ideal solution, and is not afraid to use it for marketing purposes. The article notes that the situation is not ideal; there may be cases where there is not enough stock available. The index fund wins because its gets 25 percent of the gross profits from the hedge funds. You can bet we'll see some more firms get creative when it comes to their 130/30 offerings.  

For more:
- here's the article