A stock lending arrangement involves a person (the ‘borrower’) acquiring securities from another person (the ‘lender’) in return for an undertaking to return equivalent securities.
The borrower is required to provide security (‘collateral’) to the lender of value not less than the value of the borrowed securities. This would normally be in the form of either cash or other marketable securities, although it could be a mixture of cash and securities.
5. In a commercial stock lending arrangement, if the borrowed securities paid interest during the term of the arrangement, the borrower would be required to pay an equivalent amount to the lender (a manufactured payment). Similarly, if any securities provided as collateral paid interest, the lender would be required to pay an equivalent amount to the borrower. If cash was provided as collateral, the lender would be required to pay the borrower interest on that cash for the period of the loan. (...)
The borrower is required to provide security (‘collateral’) to the lender of value not less than the value of the borrowed securities. This would normally be in the form of either cash or other marketable securities, although it could be a mixture of cash and securities.
5. In a commercial stock lending arrangement, if the borrowed securities paid interest during the term of the arrangement, the borrower would be required to pay an equivalent amount to the lender (a manufactured payment). Similarly, if any securities provided as collateral paid interest, the lender would be required to pay an equivalent amount to the borrower. If cash was provided as collateral, the lender would be required to pay the borrower interest on that cash for the period of the loan. (...)
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