What is stock borrowing and lending?

Stock borrowing and lending (SBL) is an effective mechanism by which dormant securities in an investor's portfolio can be utilised by another investor to create profits, especially in a volatile market. Stock lending can be defined as a collateralised loan of securities transfer from a lender to a borrower for a limited period of time. The borrower then agrees to return identical securities to the lender in due course. However, the lender retains the benefits of ownership except voting rights. The borrower is entitled to utilise the securities as required, but is liable to the lender for benefits such as dividends, interest, bonus or rights issues.

Our Services

There is always a misconception that most SBL activity is between large sophisticated institutions. According to the Securities and Futures Ordinance, investors are required to have unconditional right of a presently exercisable stock in order to participate in short selling.