Dictionary – Securities lending explained
A Lender (or more specifically a beneficial owner) is an owner of stocks, bonds, and ETFs who is willing to loan their securities to a borrower. In return for lending your securities, you will receive a lending fee for every day the security is on loan. Each loan is secured by the provision of collateral by the borrower.
Lenders rarely view securities lending as a priority when making investment decisions, but rather as a method to enhance their returns. Most lenders can expect to earn between 1 and 40bps across their portfolio, depending on the demand for your securities from borrowers and the number of your securities you wish to lend.
Until now, many beneficial owners were unable to benefit from securities lending, shutout by high barriers to entry. If you were fortunate enough to be a participant, you either had to invest considerable time and money in doing it yourself or hand over control and responsibility for risk management to someone else. The problem is, without having sufficient control or transparency, how would you ever ensure you received a fair deal? Sharegain has reinvented securities lending, making it accessible to all investors by focusing on simplicity, automation, and seamless integration.