rehypothecate

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Rehypothecate

To pledge securities as collateral for a loan when the same securities have already been pledged for another loan. Generally speaking, a brokerage rehypothecates when it needs to secure a loan for a client. That is, the client pledges securities for a loan on a margin account and the brokerage uses those same securities to procure a loan from a bank to finance the loan for the client.

rehypothecate

To repledge stock as collateral for a loan. In practice, this term means to pledge securities (by a brokerage firm) for a bank loan when the securities have already been pledged to the firm by one of its customers. The brokerage firm essentially passes along the collateral in order to obtain a loan to finance the customer's account.
References in periodicals archive ?
"Rehypothecating" cash is effectively netting by the dealer of collateral received and collateral posted.
First, dealer banks realize "collateral efficiencies" by rehypothecating collateral they have received from their customers.
rehypothecating customers' securities that it does not own, perhaps