Security Lending and Borrowing Mechanism
- Securities Lending & Borrowing is an opportunity for the lender to earn a lending fee for the stocks lend and borrower to get temporary loan of stocks which they do not own.
What is the Benefit :
- Additional Income – Goodwill Clients can generates an additional Income on the stocks that the client holds
- Short Selling – Goodwill Clients can Short sell the stocks by borrowing in the market during market downturn
- No Counter party risk – Securities lending and borrowing transactions are guaranteed by Goodwill clearing member ( NSE Clearing Ltd )
How does it works :
For example, you have a negative view on the price of a stock. You can borrow shares from SLB and sell them. You can buy them back if and when the price falls. Your profit is the difference between the selling price and the buying price, after deducting the interest rate.
- Lender View : For Ex, you have 100 shares of HDFC Bank in your portfolio which are lying idle. As an Investor you can lend that shares for a specific price and period
- Borrower View : For Ex, you have a negative view on the price of a stock. So you can borrow shares from SLB and sell them. You can buy them back if and when the price falls. So his profit is the difference between the selling price and the buying price, after deducting the interest rate
How to Participate in SLB :
- Clients should first get registered in SLB Segment ( No registration fee applicable)
- After registration, clients should inform their RM about the stocks which they intent to lend
- Goodwill, On behalf of their clients will place the request on the SLB trading platform
Frequently asked questions (FAQ):
- How many stocks eligible for SLB segment There are current 342 stocks available on the NSE Stock Lending and Borrowing platform. The list is updated on a monthly basis by the NSE.
- How shall I quote the lending fee Lending fee is quoted on per share basis. The fee depends on the demand for the shares, there is no set rule for this. Higher the demand, the more the lender can ask for every share lent.
- How can I register as a participant in SLB If you have an existing trading account with Goodwill Wealth Management Pvt Ltd., you can avail stock lending or stock borrowing privilege by simply following the link www.gwcindia.in->Quick Links->New Segment Activation or by signing the physical copy of the terms and conditions. You can submit the signed copy to the nearest Goodwill Wealth Management Pvt Ltd branch or courier it to our customer care department address as follows,
Goodwill Wealth Management Pvt Ltd.
No. 73, 1st Floor,,
Tarana Complex,
Sardar Patel Road,
Guindy, Chennai – 600032, Tamil Nadu. s
