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 ?
The average stock loan fee short sellers are paying to bet against cannabis stocks is 16.75%, according to S3.
Dynamex Trading, an affiliate of Group One Trading, is a leading provider of options brokerage services catering to stock loan market participants.
The connection will provide market participants with straight-through trade processing capabilities and electronic trade submission to OCC's stock loan clearing solutions.
In a typical mortgage loan, a house or apartment building may serve as collateral; whereas in a stock loan (legislated in Canada, but presently not available in the USA) a portfolio of stocks may serve as collateral.
In January 2016, a portion of the IPO net proceeds of $38.9 million were used to retire our Small Business Lending Fund obligation of $16.4 million and repay our bank stock loan of $18.6 million.
EeAo A lack of standardisation in post-trade processing of transactions EeAu The processing of some asset classes (notably OTC derivatives, but also repos, collateral movements, stock loan and investment fund settlement and registration) continues to be impeded by low levels of standardisation.
A lack of standardisation in post-trade processing of transactions - The processing of some asset classes (notably OTC derivatives, but also repos, collateral movements, stock loan and investment fund settlement and registration) continues to be impeded by low levels of standardisation.
"The ministry has translocated game to 35 farms/ beneficiaries through the Wildlife Breeding Stock Loan Scheme.
This case involved a stock loan, unlike the transaction in Rev.
Then, if BP stock subsequently rises by three percent but the rest of the sector is unchanged, he will be able to sell his BP stock at a three percent profit, while closing out his short position (repaying the stock loan) for no loss or gain.
Buy-side clients in North America and Europe will have access to a complete provider of investment services in Mexico from custody to asset management, foreign exchange, research for equities, derivatives, fixed income products and stock loan."
The prospectus stated that the proceeds are to be divided equally between working capital supplement and stock loan payment.