BSE Ltd.SLB Introduction
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Introduction

Securities' Lending and Borrowing Securities' Lending and Borrowing describes the market practice whereby securities are temporarily transferred by one party (the lender) to another (the borrower) via an approved intermediary.

The Borrower is obliged to return them either on demand or at the end of an agreed term and also has an option to early return. Lender may recall securities at any time within normal market settlement cycle.

SLB is a major and growing activity which provides significant benefits for issuers, investors and traders alike. SLB helps in improving market liquidity, more efficient settlement, tighter dealer prices and perhaps a reduction in the cost of capital.

Why participate in Securities Lending & Borrowing ?

  • Lender's Motivation
    - It provides lender incremental return on an idle portfolio

  • Borrower's Motivation - To cover a short position : avoidance of settlement failure
    - Hedging of futures & options positions
    - Borrow and lend to reap benefits of the market sentiment


Salient Features in SLB

  • SLB Contracts up to 1 year (12 monthly contracts)
  • Early Return and Recall
  • Base Minimum Capital reduced to NIL
  • No separate exe – Login same as BOLT
  • Facility of Early pay-in


SLB Mechanism

SLB Mechanism


#L.Price: (Closing Price of T-1 day * Quantity) ; L.Fees: Lending Fees