Securities lending explained

Default

The primary risk in the majority of securities lending programmes is the risk of default by the borrower. Defaults are extremely rare, but they do happen. The most notable from a securities lending perspective were those of Bear Stearns and Lehman Brothers. In the rare case that a default occurs with one of your borrowers, you are protected by the provision of collateral, which the borrower posts prior to the transfer of your securities.

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*This website is directed exclusively at and intended to be used only by professional investors and retail investors with direct holdings in stocks, bonds and ETFs in excess of £500,000. Our website is not directed at any person or institution where (by reason of nationality, residence or otherwise) the availability of our website or securities lending in general is prohibited. The material on this website is for general information and should not be considered as investment advice or solicitation to be involved in securities lending or to use one of Sharegain’s services. Securities lending involves risks and we have not and will not assess whether our service is appropriate for you. If you decide to lend your securities, your capital may be at risk. Please consult professional advisors if you are in any doubt as to whether the service would be beneficial for you or whether you require any consent or need to observe any formalities, before deciding to engage in securities lending.
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