SEBI has introduced Securities Lending and Borrowing scheme. As per this scheme, those persons having securities can lend their securities for consideration and those requiring securities (managing market obligations , as collateral etc.) can borrow the same. Under the scheme, the securities are lent through intermediaries who are approved by SEBI. The approved intermediary would borrow the securities for further lending to some borrowers. Lenders of the securities and borrowers of the securities enter into separate agreements with the approved intermediary for lending and borrowing the security. Lending and borrowing is effected through the depository system. A lender can recall securities; similarly borrower can repay securities as per agreement with the intermediary.
1. Can I lend the securities lying in my account?
Yes. You can lend your securities through Intermediaries approved by SEBI.
2. How would I lend my demat securities?
You may enter into an agreement with the approved intermediary, to be a lender under this scheme. After that, you may lend securities any time by submitting lending instruction to your DP.
3. How would I get back the securities lent by me?
Intermediary may return the securities at any time or at the end of the agreed period of lending. Intermediary has to repay the securities together with any benefits received during the period of the loan.
4. How would I receive the corporate benefits which would accrue on these securities during the period of lending?
The benefits will be given to the Intermediary/borrower. However, whenever the securities are being returned/recalled, Intermediary/borrower will return the securities together with benefits received.