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Stock Borrowing And Lending Agreement Hong Kong

09Oct

4. Experience abroad in lending and lending of centralised securities In the event of sale and retirement or rest, a party agrees to sell securities in return for a transfer of cash to another party, with a simultaneous agreement to repurchase the same or equivalent securities at a specified price on a date agreed in the future. The resale price reflects the initial sale price as well as the accrued interest at the repo rate. Most rest periods are governed by a framework contract, the ISMA/TPMA43 GLOBAL MASTER AGREEMENT (GMRA). In 1999, HKSCC set up a mechanism to borrow shares from participants in order to fulfill HKSCC`s settlement obligation to participants with continuous long positions (CNS). However, this property is not widely used. The terms and remittances of the equity credit are negotiated between borrowers and lenders. Credit details are sent to the Depository Trust Company (DTC) using specific OCC codes. Cash and securities are transferred via DTC.

Members may also order the OCC to automatically allocate hedging positions against equity or index share positions for margin-offset. Each occ brand business evening to market each outstanding credit/loan and reports daily information to participants. Transactions are guaranteed by OCC. Euroclear Bank`s securities lending service targets credit applications in order to avoid settlement errors. Transferable securities are in principle eligible for credit if the issuing rules allow the lending and lending of securities. Currently, 32 currencies, debt securities are available on 26 markets and shares are available on 15 markets. a pension fund holder and a hedge fund borrower).