Securities Lending


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Securities Lending

The act of loaning a stock, derivative, or other security to an investor or firm. Securities lending requires the borrower to put up collateral, whether cash, security, or a letter of credit. The completion of this transaction requires a securities lending agreement, which states, among other things, how long the loan lasts, what fee the lender receives, and the amount and type of collateral. Securities lending is important to short selling, in which an investor borrows securities in order to immediately sell them. The advantage of securities lending to the borrower is the fact that he/she may profit from shorting the securities; the advantage to the lender is the fee (and, if the borrower fails to repay, the collateral).
References in periodicals archive ?
Eurex Clearing's Lending CCP covers loans in global fixed income securities, equities and exchange-traded funds in Europe; its strategic partners are some of the largest providers of financial services to institutional investors and securities lending agents.
The Executives' Meeting of East Asia-Pacific Central Banks (EMEAP) has announced the launch of securities lending in the Asian Bond Fund (ABF) Pan-Asia Bond Index Fund (PAIF).
According to the SEC's order, Goldman Sachs employees who were members of the firm's Securities Lending Demand Team routinely processed customer locate requests by relying on a function of the Goldman Sachs order management system known as "fill from autolocate," which was accessed via the "F3" key.
Securities lending and borrowing will help the development of other products on DFM such as exchange-traded funds, said Maryam Fekri, an executive vice-president of DFM.
is off the hook in a suit brought by Blue Cross Blue Shield of Minnesota and other institutional investors claiming the bank misrepresented the safety of its securities lending program.
Specifically, Update 2011-11 applies only to derivatives, repurchase agreements and reverse purchase agreements, and securities borrowing and securities lending transactions that are either offset in accordance with specific criteria contained in FASB Accounting Standards Codification or subject to a master netting arrangement or similar agreement.
Summary paragraph: Don't be left adrift when it comes to securities lending disclosures
Another concern that could result in roping in insurance industry data into a central repository, is the perceived need by OFR for a central information source in the securities lending market comparable to what is available in the repo markets.
Summary paragraph: From aiCIO Magazine's Summer Issue: Securities lending is blooming once again -- but which model of lending will see fortune shine upon it more?
McAuley to the newly created position of managing director, senior business strategist, for the Global Securities Lending Business.
Similarly, revising Labor's prohibited transaction exemption for securities lending to restrict those securities lending arrangements that may pose unreasonable financial terms upon plans and providing more guidance, in general, about such transactions can also help plan sponsors and participants understand the risks that cash collateral reinvestment can pose to plan assets in investment options that lend securities and how to mitigate them.
Finadium says revenue from securities lending has already contracted, with 2010's total down 30% from 2009 levels.

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