Phase 1 of SGX Securities Lending was launched on 7 January this year with a borrowing period of T+3 market days, and an option to rollover for another T+3 market days. In this phase, securities lending facilitates settlement of trades where investors are short of securities for delivery. As investors have become familiar with the service since its launch, CDP is now allowing successive rollovers of T+3 market days, where it has sufficient supply of the security. Registered borrowers with CDP can continue to rollover their securities borrowings at a fee of 6% per annum, and onward lend to their clients at their own rates. The extension of rollovers will facilitate longer term lending which will assist investors in their trading strategies. CDP will monitor the demand for successive rollovers and make adjustments as necessary to ensure that the needs of the market are met.
SGX is developing the next phase of the lending programme, which offers strategic lending, whereby borrowers can request for specific loan periods and negotiate the borrowing and lending rates.
Mr Thomas Kloet, CEO of SGX said, "We are encouraged by the growing interest in securities lending since its launch in January. This interest has paved the way for the next phase of our lending programme. We are happy to be working together with our brokers in developing the securities lending business which will improve settlement efficiency and facilitate the further development of our capital markets."
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