JSF usually appropriates stock certificates received as collateral for loans to stock loans (1). However, should the outstanding stock loans exceed the outstanding loans, it is necessary to procure the stock certificates needed for settlement by bidding with securities companies or institutional investors such as life and non-life insurance companies, banks and other sources (2). The highest bidding rate becomes the lending rate (Premium Charge) of that issue. This premium charge is applied to all users of standardized margin transactions, and should be collected by all sell sides and paid to all buy sides or successful bidders.
For details, please refer to "Handing of over-lent issues in Loans for Margin Transactions"
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