Mutual Funds
What is Securities Lending Scheme?
Securities Lending and Borrowing is a scheme which enables lending of idle securities by the investors to the clearing corporation and earning a return through the same. For securities borrowing and lending system, clearing corporations of the stock exchange would be the nodal agency and be registered as the "Approved Intermediaries"(AIs). The clearing corporation can borrow, on behalf of the members, securities for the purpose of meeting shortfalls. The defaulter selling broker may make the delivery within the period specified by the clearing corporation. In the event of the defaulted selling broker failing to make the delivery within the specified period, the clearing corporation has to buy the securities from the open market and return the same to the lender within seven trading days. In case of an inability to purchase the securities from the market, the transaction shall be closed out.
Advertisement
More from this specialization
- Is the higher net worth of the sponsor a guarantee for better returns?
- Where can an investor look out for information on mutual funds?
- How long will it take for transfer of units after purchase from stock markets in case of close-ended schemes?
- How will an investor come to know about the changes, if any, which may occur in the mutual fund?
- How to know the performance of a mutual fund scheme?
- What is Investor Protection Fund (IPF)/ Customer Protection Fund (CPF) at Stock Exchanges?