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Home > Our Business Field > General Stock Lending

General Stock Lending


General Stock Lending

This business lends stock certificates needed to settle trades to securities companies. A securities company would use General Stock Lending when it has no stock certificates on hand, for the purpose of hedge sale of convertible bonds or arbitrage transactions with spots and futures, and so forth. JSF has done its utmost to increase the number of eligible issues and shares for brokerage services since the business was launched in 1977.

In February 2002, we implemented offer-bid borrowing and lending transactions (e Stock Lending) by expanding the online network that is linked with securities companies, so as to include institutional investors, such as life and non-life insurance companies.

JSF procures stock certificates for lending from institutional investors such as life and non-life insurance companies. JSF also receives stock certificates in advance for quick stock lending.

Lending Conditions

Borrowers

General Trading Participant of stock exchanges: member securities companies of the Japan Securities Dealers Association and others

Available issues

Securities listed on stock exchanges.

Lending unit

Maximum one year.

Lending rate

The lending rate is calculated for the period from the day of lending until the day (including weekends and holidays) preceding the due payment day. The total of the lending rate thus calculated daily by using the lending rate and the appraised value of stock-lent will be paid. There are two types of lending rate: a predetermined one, based on the period of the loan and on other factors; and a second type, determined by negotiation (offer-bid stock borrowing and lending transactions). The former includes a volume discount system.

Collateral

Cash exceeding the market value of the stock lent or substitute collaterals which are acceptable by JSF, such as stocks, bonds or bank guarantees, are required to be deposited. Types and collateral values of substitute collateral are shown in the table below.

For cash collateral, interest calculated on the weighted average of non-collateral call overnight rate on the day will be paid.

Types and values of major substitute collaterals

Type Collateral value
Stocks Within 70% of market price
Convertible bonds Within 80% of market price
Government bonds Within 95% of market price
Government guaranteed bonds Within 90% of market price
Other bonds Within 85% of market price
Preferred securities Within 70% of market price
Listed investment trust Within 70% of market price
Bank guarantee Within 100%

Application time for borrowing

In principle, applications for borrowing are accepted from 8:30 A.M. until 6:00 P.M. However, borrowing applications for that day should be made prior to 3:30 P.M.