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Securities Lending & Borrowing (SLB)

Securities Lending & Borrowing (SLB). Securities Lending & Borrowing - Concept. Securities lending transaction is a temporary loan of securities between Lender & Borrower.

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Securities Lending & Borrowing (SLB)

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  1. Securities Lending & Borrowing (SLB)

  2. Securities Lending & Borrowing - Concept • Securities lending transaction is a temporary loan of securities between Lender & Borrower. • Describes the market practice by which, for a fee, securities are transferred temporarily from one party, the lender, to another, the borrower. • Borrower is obliged to return them either on demand or at the end of any agreed term and also has an option to early return. • Lender may recall securities at any time within normal market settlement cycle. • Itpromotes market efficiency and liquidity

  3. Market Participants • Lender • Insurance Companies • Banks • HNI’s • Mutual Funds • Retail • Borrower • Short sellers, especially long term shorts • Cash & derivatives arbitragers • Market makers • Retail • Approved Intermediary • Clearing Houses

  4. 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 4

  5. Salient Features in New SLB Platform • SLB Contracts up to 1 year (Minimum 26 contracts) • AI will list contracts with multiple stock return days: • first Thursday of the month • one (1) Thursday prior to the last Thursday of the month • additional three (3) stock return days such that there are stock return days in the first five (5) consecutive Thursdays. • Early Return and Recall • Base Minimum Capital reduced to NIL • No separate exe – Login same as BOLT • Facility of Early pay-in 5

  6. SLB Mechanism

  7. Example of the contracts available for SLB

  8. Example of the contracts available for SLB

  9. Settlement Cycle

  10. Application Process Application to BOISL Member agreement with BOISL (Part A#) Deposit additional base capital for margins Fulfill all conditions specified in SEBI / BOISL Circular Member agreement with Clients (Part B#) and complete all KYC Formalities Activation of the members 10

  11. SLB Snapshot

  12. For further information, contact us @

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