securities lending & borrowing (slb). 2 securities lending & borrowing - concept securities...
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Securities Lending & Borrowing (SLB)
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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.
• It promotes market efficiency and liquidity
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
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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
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Salient Features in New SLB Platform
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• 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
SLB Mechanism
Example of the contracts available for SLB
No. of Contracts Scrip ID First Trade Day Last Trade Day Stock Return Day
1 RIL02DEC10 22-Nov-10 29-Nov-10 2-Dec-10
2 RIL09DEC10 22-Nov-10 6-Dec-10 9-Dec-10
3 RIL16DEC10 22-Nov-10 13-Dec-10 16-Dec-10
4 RIL23DEC10 22-Nov-10 20-Dec-10 23-Dec-10
5 RIL30DEC10 22-Nov-10 27-Dec-10 30-Dec-10
6 RIL06JAN11 22-Nov-10 3-Jan-11 6-Jan-11
7 RIL20JAN11 22-Nov-10 17-Jan-11 20-Jan-11
8 RIL03FEB11 22-Nov-10 31-Jan-11 3-Feb-11
9 RIL17FEB11 22-Nov-10 14-Feb-11 17-Feb-11
10 RIL03MAR11 22-Nov-10 28-Feb-11 3-Mar-11
11 RIL24MAR11 22-Nov-10 21-Mar-11 24-Mar-11
12 RIL07APR11 22-Nov-10 4-Apr-11 7-Apr-11
13 RIL21APR11 22-Nov-10 18-Apr-11 21-Apr-11
14 RIL05MAY11 22-Nov-10 2-May-11 5-May-11
Example of the contracts available for SLB
No. of Contracts Scrip ID First Trade Day Last Trade Day Stock Return Day
15 RIL19MAY11 22-Nov-10 16-May-11 19-May-11
16 RIL02JUN11 22-Nov-10 30-May-11 2-Jun-11
17 RIL23JUN11 22-Nov-10 20-Jun-11 23-Jun-11
18 RIL07JUL11 22-Nov-10 4-Jul-11 7-Jul-11
19 RIL21JUL11 22-Nov-10 18-Jul-11 21-Jul-11
20 RIL04AUG11 22-Nov-10 1-Aug-11 4-Aug-11
21 RIL18AUG11 22-Nov-10 15-Aug-11 18-Aug-11
22 RIL01SEP11 22-Nov-10 29-Aug-11 1-Sep-11
23 RIL22SEP11 22-Nov-10 19-Sep-11 22-Sep-11
24 RIL06OCT11 22-Nov-10 3-Oct-11 6-Oct-11
25 RIL20OCT11 22-Nov-10 17-Oct-11 20-Oct-11
26 RIL31NOV11 22-Nov-10 31-Oct-11 3-Nov-11
27 RIL17NOV11 22-Nov-10 14-Nov-11 17-Nov-11
Settlement CycleActivities Proposed Timings
Trade Day
Securities Lending & Borrowing session 09:15 a.m. – 03:30 p.m.
Custodial confirmation by 06: 00 p.m.
Final obligations download 07:00 p.m.
Trade day +1
Pay-in of securities/funds 9:30 a.m.
Pay- out of securities/funds 11:00 a.m.
Fund or securities shortages Financial closeout
Early return/recall day + 1
Pay-in of securities/funds 9:30 AM
Pay-out of securities/funds 11:00 AM
Fund or securities shortages Financial closeout
Stock return day
Pay-in of securities 9:30 AM
Pay-out of securities/funds 11:00 a.m.
Buy-in auction for failure of borrower to return securities 12:00 noon to 1:00 p.m.
Auction obligations download 2:00 p.m.
Stock return day + 1
Pay-in of securities for auction settlement 9:30 a.m.
Pay-out of securities/funds for auction settlement 11:00 a.m.
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
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SLB Snapshot
For further information, contact us @
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Contact Person Contact No. Email id
Ms. Shikha Chauhan 2272 8749 [email protected]
Mr .Ojas Shah 2272 8504 [email protected]
Ms. Sandeep Kaur 2272 8132 [email protected]