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.
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
Number of shares requested from a minimum unit to large lots.
Lending period
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.
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.