This Securities lending team has been operational since 1996 and has comprehensive compliance, credit and FICA processes in place
The purpose of Securities Lending is to:
- Increase liquidity and efficiency to the market place
- Supports trading activities/strategies in all major markets
- Provides the lender (Pension Fund) with a low risk yield enhancement to his portfolio
- Enables the borrower to cover failed or short sale trades and to hedge/arbitrage in the market
- Facilitates effective and efficient settlement of equities and bonds through STRATE
A securities borrow/loan (SBL) transaction involves the temporary loan of equities/bonds by a lender (Pension Funds, Asset Managers and Life companies) to a borrower.
On settlement day the borrower provides the lender with collateral, in the form of cash or non-cash, which is greater than the value of the loan. A borrower being anyone shorting shares in the market, this could be a stockbroker, a hedge fund, prime broker etc.
On return of the loan, once the lender has received his equities/bonds, the lender will return the borrowers collateral.
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