Securities Lending & Borrowing


Background

 

The number of Securities Lending & Borrowing transactions have been growing steadily for years. They now represent a substantial part of the daily settlement value in most European markets and play an important role in facilitating market liquidity.

 

Securities L & B markets are driven by a diverse set of considerations such as raising portfolio returns, taking positions, creating leverage, raising finance, increasing delivery efficiency, and others. Both the lender and borrower side are also driven by a heterogeneous group of players. 

 

This course gives an overview of Securities Lending and Borrowing for those with no prior knowledge in the field. It outlines the different L & B markets with their specific processes, opportunities, and risks; it explores the motivations of different players in the market; and it describes the different circumstances in which institutions lend or borrow securities.

 

Delegates

        Fund Managers

        Brokers & Market Making Staff

        Settlement and Back Office staff

        Custodians

        Institutional Salesmen

        Trustees

        Compliance and Middle Office Executives

        Accountants & Lawyers (CPD Credit)

        IT executives operating or designing systems in this area

 

Anyone contemplating using Securities Lending or Securities Borrowing or who is entering an existing Securities Lending or Securities Borrowing operation and has no or only a partial knowledge.


Content

 

Overview

-What is Securities Lending and Borrowing?


-Brief history

-Market size in geographical regions asset classes

-GC vs. specials

 

Lending Options and Features of Lending Programmes

-Why lend securities?


-Who Lends?


-Lender considerations: Revenue vs. risk


-Counterpart selection

-Lending arrangements

        Custodian programmes

        Self managed programmes

        Third party programmes

        Exclusive arrangements 

Borrowing Securities Outline

-Why borrow securities?

-Understanding demand drivers

        Fail coverage

        Yield enhancement strategies (tax arbitrage)

        Inventory finance

        Shorting

        Financial Strategies

 

-Who are the borrowers?

-The relationship between prime brokers and hedge funds

The loan life cycle examined

-Initiating a loan

-Locating stocks

 

        Fee negotiation: fee v rebate

        Loan confirmation

        Delivery of securities & collateral; daylight exposure

-Management of collateral

        Mark-to-market

        Margin calls

        Substitutions

-Processing of income and events

        Manufactured dividends

        Voting rights

        Corporate events and corporate actions

-Terminating a loan: Recalls vs. returns

 

-Fee and rebate accruals

 

Risks and mitigants

-Counterparty risk

-Market risk (collateral)


-Liquidity risk


-Operational risk

 

-Legal and Regulatory risk

 

-Legal and Regulatory Environment

 

Agreements and Documentation

 


 

 

 

 

 




Todays Date:


Duration 1 day
Available as an in-house course. Details on request.







Investment Education PLC
45 Old Hall Road, Manchester M7 4JF, United Kingdom
Tel:+44 (0)161 832 3800
Email: mail@investmentEducation.net
Registered in England Number 2129160
VAT Registered Number GB 480 2112 85



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