STOCK LENDING AND BORROWING MECHANISM (SLBM)
SLBM: Stock Lending And Borrowing Mechanism
SLB or stock lending and borrowing is a system in which a trader can borrow shares that they do not already own or can lend the stocks that they own.
An SLB transaction has a rate of interest and a fixed tenure.
Securities lending and borrowing Mechanism
Why do traders do stock lending & borrowing?
Lenders – Lenders can earn extra income by lending the stocks from their portfolio.
Borrowers – Borrowers can borrow the stocks for arbitrage, for short selling or to avoid the physical delivery.
Benefits of SLB
Additional Income:
Generate additional income from the idle portfolio.
Multiple stocks:
Securities on which derivatives are available in the F&O segment are available in slb segment.
No counter party risk:
Securities lending and securities borrowing transactions are guarantee by NSCCL. NSCCL act as a financial guarantor for SLB product.
Avoid physical settlement:
No issues of physical settlement has you can borrow the stock from slb and avoid physical settlement.
How to get started
To apply online – Follow given path - Login > New product > segment access > SLB
Frequently Asked Questions (FAQs)
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