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 ?
Livedoor eyes legal action against Fuji TV stock loan deal
INDIANAPOLIS -- Equities First Holdings (EFH), a leading full-service, non-purpose securities lender for businesses and individual investors, today announced that on October 4, 2012, the firm has entered into a stock loan and repurchase agreement with Kingold Jewelry Inc.
Great Southern Bank of Springfield wrote off nearly $35 million it had in a stock loan to ANB, and almost 650 depositors had $39.
The newly launched platform offers a full spectrum of bundled and unbundled services including equity finance, stock loan, physical and synthetic prime; and accommodates the most complex business requirements such as arranged finance, asset-based billing, tri-party, re-hypothecation and risk-based margin.
NoDivRisk monthly has the same economics as an OTC stock loan or equity repo transaction with added benefit of exchange traded transparent markets and central counterparty clearing.
Investors who want to tap into the value of their portfolio through a stock loan program should realize that these programs involve significant risk and cost, and may result in unintended tax consequences," said John Gannon, FINRA's Senior Vice President for Investor Education.
PQT's managed trading solution also includes exchange co-location, market data and order routing connectivity, execution, and fully integrated stock loan and clearing services.
A recognized leader in the global third market, Cantor provides solutions that address clients' requirements for execution, return optimization and risk management, offering services in domestic and international equities, derivatives, convertibles and structured products, stock loan, and equity research.
A recognized leader in the global third market, Cantor's equities sales and trading professionals provide solutions that address clients' requirements for execution, return optimization and risk management, offering services in domestic and international equities, derivatives, convertibles and structured products, stock loan, and contracts for differences, as well as research.
Global Custodian also recognized the Bank's commitment to the business: "It continues to invest [in] automated reporting, adding managed accounts (DB X Markets) and introducing analytical tools in stock loan (DB Stock Loan Quant) in the last year alone.
4 Million for Stock Loan Improprieties, Supervisory Deficiencies, Trader Suspended and Fined
Cantor Fitzgerald Equity Capital Markets offers services in domestic and international equities, derivatives, convertibles and structured products, stock loan, and contracts for difference, as well as investment banking and research.