Securities Lending & Borrowing



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.



        Fund Managers

        Brokers & Market Making Staff

        Settlement and Back Office staff


        Institutional Salesmen


        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.




-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


        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


        Margin calls


-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
Registered in England Number 2129160
VAT Registered Number GB 480 2112 85

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