Securities Lending And Borrowing - Features, Opportunities, Regulations: Motilal Oswal
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Motilal Oswal Report
Securities Lending and Borrowing (SLB) is a mechanism through which investors can borrow or lend shares to other market participants for a stipulated duration, at a certain fee.
This mechanism provides liquidity to the equity market and thereby increases the market efficiency in India.
The platform provides a viable alternative to the derivatives market for purposes of hedging.
Borrowers in SLB are usually short-sellers i.e. traders who want to sell shares that they don't own.
Lenders on the other hand are those investors who have bought shares for long-term purposes and such shares are lying idle in their demat accounts.
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