Securities Borrowing & Lending - SBL

If you are currently holding on to some stocks in the Singapore share market and wondering what you can do with them while waiting to sell at the right price in this market slump, you may consider SBL or short for Securities Borrowing & Lending to potentially enhance your portfolio returns while waiting for the right time to sell in future.  So what is SBL ?

Securities Borrowing & Lending (SBL)

The Definitions

Securities borrowing and lending is a temporary loan of securities between the lender and the borrower. This is done so as to allow the borrower who expects the price of a stock to fall to hold a short position for a longer duration. On the other hand, the lender receives a fee which could potentially enhance his portfolio yield with relatively low risk.

The Benefits

On the borrowing side, you can hold a short position for a longer period of time. Short selling with Phillip Securities Pte Ltd (PSPL) allows you to have direct market access in your order. This gives you, the borrower, the flexibility to choose whether the sell order should be a market order or a limit order. In addition, you enjoy other benefits such as no account maintenance fee required, no financing charge levied on leveraging on equities and interest paid on cash collaterals.

On the lending side, you could potentially enhance the yield of your portfolio through receiving a lending fee at relatively low risk level by lending your shares that are idling in your portfolio.

The Mechanics

For securities lending, you may contact SBL directly to indicate interest in lending. When there’s a loan request by SBL, SBL will contact you to discuss on the terms of the loan.

For securities borrowing, you may contact your trading representative or the SBL Desk to check the availability and / or to put up a loan request. Alternatively, you may access the loan availability page by logging onto POEMS (SBL page)

For more details on SBL or to open a SBL account, you may wish to contact your existing Trading Representative (TR) / Financial Adviser Representative (FAR).

Source : www.poems.com.sg

Rooney

p/s : I am not sure if Malaysia stock brokers offer SBL