Stock lending and borrowing (SLB) is a system in which traders borrow shares that they do not already own, or lend the stocks that they own but do not intend to sell immediately.
SLB is similar to loan transactions – shares are borrowed and lent at a fixed interest rate and for a stipulated tenure determined by the two participants of any transaction. The rate of interest depends on the market, the stocks listed in futures and options are open to SLB facility.

WHAT ARE Benefits of slbm?

» Incremental income on ideal share investments – Earn additional returns by lending or borrowing idle shares.

» Varied portfolio – Increase the versatility of your shares portfolio, invest in different sectors through SLB

» Benefit during market downturn – Short sell the shares through borrowing and earn

» Eliminate risk – Lending and borrowing transactions are assured by NSCCL to provide risk free contract

HOW DOES slbm WORKS?

  • The lender places an order of the stock with the intermediary with the following details:
    •     Name of the Stock
    •     Quantity of the Stock
    •     Time Period
    •     Expected Lending Fees willing to charge
  • The order will be placed on the exchange through the dealer.
  • Order matching on the lending fees takes place similar to trading on an exchange.
  • The lender is required to make an early pay-in of the security on the same day. If 25% of the stock value is provided as margin, NSCCL will allow pay-in of the rest of securities on T+1 day.
  • The lending fee is credited in the ledger of the lender on the day borrower places an order.
NOTE: 
  • A lender can only place an order through a dealer. Clients.branches & franchisees cannot directly participate in this process.
  • It is compulsory to make an early pay-in of lent securities on T-day itself. No additional margin is required if early pay-in of security is made.
  • A borrower also places an order of the stock with the intermediary with the following details:
    •     Name of the Stock
    •     Quantity of Stock
    •     Time Period
    •     Expected Borrowing Fees willing to pay
  • The order will be placed on the exchange through the dealer.
  • Order matching on the lending fees takes place similar to trading on an exchange.
  • A borrower is asked to bring in 125% of the stock value as margin & the lending fees.
  • Daily MTM on the margin is levied to the borrower. At the end of the contract, the lender gets back the stock and borrower’s margin is released.

 

NOTE: 
  • Borrowers can only place an order through a dealer. Clients.branches & franchisees cannot directly participate in this process.
  • It is compulsory to make an early pay-in of margin and lending fees on T-day itself for the borrower. 

HOW CAN ANS HELP YOU trade in slbm?

» Critical – care for customers

» Anytime, Anywhere – Desktop and Mobile trading facilities

» Our trading platform is available across both NSE & BSE, providing you full range of exchange services

» Client security through alerting clients regarding inherent market risks

» Margin funding facility available through our NBFC

» Easily comprehensible trading and investment experience

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