A security is said to be General Collateral if it is generating a lending income of between 0 and 100 basis points.
Around 90% of all securities are GC, and GC securities make up most of the volume within the securities lending market. Securities lending transaction involving general collateral securities are characterised by low returns and high volumes.
For the most part, the main index securities, including those which make up the FTSE 100 and the S&P 500, will always be GC. The major driver for this is huge amounts of liquidity. However, there are exceptions to this rule, creating an opportunity for any lenders. (This opportunity should, of course, be assessed based on any inherent risk, as with all investment activities).
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With securities lending, as with other investment activities, your capital may be at risk.
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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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