rehypothecate


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Related to rehypothecate: hypothecated

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 ?
The analysis, based on interviews with 24 buy-side firms, found that over 75% respondents were not able to rehypothecate securities collateral, adding to the strain created by using assets that might otherwise be under management for collateral.
The purchase agreement allowed the counterparty to sell, pledge, rehypothecate, invest, use, commingle, otherwise use or dispose of the pledged shares as well as the right to vote the pledged shares.
directly rehypothecate the customers' securities as collateral for