securities loan

Securities loan

The loan of securities between brokers, often to cover a client's short sale; or a loan secured by marketable securities.

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).

securities loan

1. A loan made to an investor for the purpose of buying securities. The loan is secured by the securities.

2. The lending of securities by one broker-dealer to another broker-dealer. Securities loans generally occur when broker-dealers need to borrow securities for delivery on customers' short sales.

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

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References in periodicals archive ?

Under this structure, a securities loan is negotiated bilaterally with the borrower, except that in this instance both parties agree to clear the transaction.

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Federal Reserve's Term Asset-Backed Securities Loan Facility, or TALF, program also unlocked more financing for auto loans.

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In the US, the Term Asset-Backed Securities Loan Facility (TALF) program and the Public-Private Investment Program (PPIP) were in effect debt-forgiveness schemes aimed at sub-prime mortgage holders, but on too small a scale.

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TALF -- the Term Asset-Backed Securities Loan Facility -- was set up by the U.S.

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Others, like the Capital Purchase Program (CPP) and the Term Asset-Backed Securities Loan Facility (TALF), have closed and are winding down operations, and several programs that focus on preserving homeownership and that have provided assistance to auto companies and AIG remain active.

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* $0.8 billion in earnings on loans extended under the Term Asset-Backed Securities Loan Facility (TALF) and loans to depository institutions

Reserve Banks return $78 billion to U.S. treasury

On November 25, 2008, the Federal Reserve announced the creation of the Term Asset-Backed Securities Loan Facility (TALF).

The asset-backed securities markets, the crisis, and TALF

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