Slb bse

1. Securities Lending & Borrowing
(SLB)

2. 2
Securities Lending & Borrowing - Concept
•Securities lending transaction is a temporary loan of securities
between Lender & Borrower.
•Describes the market practice by which, for a fee, securities are
transferred temporarily from one party, the lender, to another,
the borrower.
•Borrower is obliged to return them either on demand or at the
end of any agreed term and also has an option to early return.
•Lender may recall securities at any time within normal market
settlement cycle.
• It promotes market efficiency and liquidity

3. Market Participants
Lender
–Insurance Companies
–Banks
–HNI’s
–Mutual Funds
–Retail
Borrower
–Short sellers, especially long term shorts
–Cash & derivatives arbitragers
–Market makers
–Retail
Approved Intermediary
–Clearing Houses
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4. Why participate in Securities Lending &
Borrowing ?
Lender’s Motivation
– It provides lender incremental return on an idle portfolio
Borrower’s Motivation
–To cover a short position : avoidance of settlement failure
–Hedging of futures & options positions
–Borrow and lend to reap benefits of the market sentiment
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5. Salient Features in New SLB Platform
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• SLB Contracts up to 1 year (12 monthly contracts)
•Early Return and Recall
•Base Minimum Capital reduced to NIL
•No separate exe – Login same as BOLT
•Facility of Early pay-in

6. SLB Mechanism

7. Example of the contracts available for SLB
No. of
Contracts Scrip IDFirst Trade Day Last Trade Day Stock Return Day
1 RIL27SEP1230-Aug-12 24-Sep-12 27-Sep-12
2 RIL25OCT12 30-Aug-12 19-Oct-12 25-Oct-12
3 RIL29NOV12 30-Aug-12 23-Nov-12 29-Nov-12
4 RIL27DEC12 30-Aug-12 21-Dec-12 27-Dec-12
5 RIL31JAN13 30-Aug-12 28-Jan-13 31-Jan-13
6 RIL28FEB13 30-Aug-12 25-Feb-13 28-Feb-13
7 RIL28MAR13 30-Aug-12 25-Mar-13 28-Mar-13
8 RIL25APR13 30-Aug-12 22-Apr-13 25-Apr-13
9 RIL30MAY13 30-Aug-12 27-May-13 30-May-13
10 RIL27JUN13 30-Aug-12 24-Jun-13 27-Jun-13
11 RIL25JUL1330-Aug-12 22-Jul-13 25-Jul-13
12 RIL29AUG13 30-Aug-12 26-Aug-13 29-Aug-13

8. Settlement Cycle
Activities Proposed Timings
Trade Day
Securities Lending & Borrowing session 09:15 a.m. – 03:30 p.m.
Custodial confirmation by 06: 00 p.m.
Final obligations download 07:00 p.m.
Trade day +1
Pay-in of securities/funds 9:30 a.m.
Pay- out of securities/funds 11:00 a.m.
Fund or securities shortages Financial closeout
Early return/recall day + 1  
Pay-in of securities/funds 9:30 AM
Pay-out of securities/funds 11:00 AM
Fund or securities shortages Financial closeout
Stock return day  
Pay-in of securities 9:30 AM
Pay-out of securities/funds 11:00 a.m.
Buy-in auction for failure of borrower to return securities 12:00 noon to 1:00 p.m.
Auction obligations download 2:00 p.m.
Stock return day + 1
Pay-in of securities for auction settlement 9:30 a.m.
Pay-out of securities/funds for auction settlement 11:00 a.m.

9. Application Process
Application to BOISL
Member agreement with BOISL (Part A#)
Deposit additional base capital for margins
Fulfill all conditions specified in SEBI / BOISL Circular
Member agreement with Clients (Part B#)
and complete all KYC Formalities
Activation of the members
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10. 10
SLB Snapshot