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Securities Lending And Borrowing

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SECURITIES LENDING AND BORROWING MECHANISM

A HNI believes that his current position will give him long term returns. However, this does not mean that his stock holdings have to be an idle asset with no short-term returns. He can activate the earning potential of his stocks by lending them to a trader and charging an interest rate. Make the best of Securities Lending and Borrowing by fixing your preferred rate of interest and desired tenure.
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What is Stock Lending & Borrowing Mechanism (SLBM)?

Stock Lending & Borrowing Scheme is a system in which clients lend or borrow stocks temporarily. They can borrow shares that they do not already own or can lend the stocks that they own.

FEATURES OF SLBM

Trader borrows lower volatility stock at comparatively lesser price range and sells it right in the capital market segment.

One can sell securities short precisely against an offsetting derivatives position to take benefit of dislocation amid cash as well as derivatives markets.

SLBM provides you an official low-cost platform to better earn risk-free Incremental Income (Lending Fees) from your idle portfolio while protecting all your rights as owner, comprising all corporate benefits and actions on your precise holding, without any Capital Gain Tax implication right on your SLB transaction.

SLBM offers you a platform to cover your unplanned short position created in the books as well as avoid settlement failure and auction or to support a trading/hedging strategy.

SLBM is available on all derivatives and eligible Non-F&O securities as approved by the exchange(s) from time to time.

Financing Transaction

Trader borrows lower volatility stock at comparatively lesser price range and sells it right in the capital market segment.

Arbitrage

One can sell securities short precisely against an offsetting derivatives position to take benefit of dislocation amid cash as well as derivatives markets.

Steady additional Income

SLBM provides you an official low-cost platform to better earn risk-free Incremental Income (Lending Fees) from your idle portfolio while protecting all your rights as owner, comprising all corporate benefits and actions on your precise holding, without any Capital Gain Tax implication right on your SLB transaction.

Avoid unwanted penalties

SLBM offers you a platform to cover your unplanned short position created in the books as well as avoid settlement failure and auction or to support a trading/hedging strategy.

Additional Tool in derivative segment

SLBM is available on all derivatives and eligible Non-F&O securities as approved by the exchange(s) from time to time.

Why do traders do it?

Traders borrow stocks to short-sell them in the market.
Short selling means the sale of a stock, the trader does not own.
Short selling can be done by institutional investors and retail investors.
The SLB mechanism in turn allows short sellers to borrow securities for making delivery.
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Benefits of Securities Lending and Borrowing Mechanism (SLBM)

Flexible Tenure

The tenure for SLBM ranges from a period of 1 to 12 months.

Pay per share

You will have to pay a lending fee per share based on the rate of return.

Additional Income

SLBM allows you to gain additional income from the shares sitting idly in your portfolio. 

Timely Trade List

Get a list of securities for SLB on a monthly basis by the exchange.

Segment Eligibility

The stock and other securities which are mostly traded in the F&O segment allowed for lending and borrowing.

Corporate Action Benefit

The lender who lends the shares in SLB will enjoy all corporate action benefits.

Specific Settlement date

The first Thursday of the corresponding month is the specified reverse leg settlement date.

Automated online platform

You can trade in SLB on price-time priority using an automated online platform

How to Trade?

With Hindustan Tradecom you can trade in equities from your comfort zone using any of our online or offline channel.

Trading Terminal

Internet based platform.

Sikka Mobile App

Mobile based platform.

Contact Us

You can Call N Trade using our dealing desk.

The tenure for SLBM ranges from a period of 1 to 12 months.

You will have to pay a lending fee per share based on the rate of return.

SLBM allows you to gain additional income from the shares sitting idly in your portfolio. 

Get a list of securities for SLB on a monthly basis by the exchange.

The stock and other securities which are mostly traded in the F&O segment allowed for lending and borrowing.

The lender who lends the shares in SLB will enjoy all corporate action benefits.

The first Thursday of the corresponding month is the specified reverse leg settlement date.

The borrowing participant can repay the obligation before the first Thursday of the month.

You can trade in SLB on price-time priority using an automated online platform.

Frequently Asked Questions SLBM (FAQs)

Presently securities on which derivatives are available in the F&O segment are available for transactions in SLB.

SLB contract settles on first Thursday of every month.

In case of borrower only the lending fee is levied upfront as margin. b) In case of lender, 25% of the lending price (T-1 cash market closing price) and Mark to market (MTM) at end of day are charged to the lender. These margins are not applicable to lender in case if lender does Early Pay-in of securities.

No margins are levied on the lender.

100% of lending price, Value at Risk margins, Extreme Loss Margins (same as applicable in Cash market for buying or selling a security) and EOD MTM are levied on the borrower.

NSCCL (National Security clearing co-operation limited) act as an financial guarantor for the slb , hence the risk is cover by them.

Rollover is an option where client can rollover (shift) the current month position to next month.

Recall is an option where client can recall the shares before the end of contract.

Repay is an option used by borrowers to repay the shares before the contract expiry.

All the benefits will be forwarded to the lenders.

Shares lent will exit the lenders demat on T day itself.

Minimum Contract is for one month and maximum contract is for 12 months.

No NRI client can only do lending.

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Membership

Hindustan Tradecom Pvt. Ltd.

  • SEBI Reg. No.: INZ000156539
  • NSE Member ID: 12783
  • BSE Member ID: 6188
  • NCDEX Member ID: 1241
  • MCX Member ID: 56000
  • CDSL DP ID: 12065000 (CDSL Registration No. – INDP-CDSL-551-2010)
  • ICEX Member ID: 2043
  • CCRL ID: 12065000

Hindustan Technosol Pvt Ltd

  • SEBI Registation No. – INZ000092238
  • ACE Member ID –  6065
  • MCX Member ID -12420
  • NCDEX Member ID – 00170
  • NERL Member ID – 50218
402/101, Royal World, Sansar
Chandra Road, Jaipur – 302001

Our Links

Membership

Hindustan Tradecom Pvt. Ltd.

  • SEBI Reg. No.: INZ000156539
  • NSE Member ID: 12783
  • BSE Member ID: 6188
  • NCDEX Member ID: 1241
  • MCX Member ID: 56000
  • CDSL DP ID: 12065000 (CDSL Registration No. – INDP-CDSL-551-2010)
  • ICEX Member ID: 2043
  • CCRL ID: 12065000

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© Copyrights 2021 HTL Hindustan. All Rights Reserved.

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