Frequently Asked Questions

It is a system in which a trader can borrow shares that they do not already own or can lend the stocks that they own. A temporary contract between lender and borrower where securities transfer for a fee, with obligation to return them on demand or at agreed term end.

SEBI has permitted all categories of Investors viz. Retail and Institutional to participate in SLB. Any registered client can participate as either borrower or lender.

Market timings 9:15 am - 5:00 pm; Order types include Lend, Borrow, Recall & Repay; 12 monthly contract series available; T-day execution; T+1 day settlement.

Per Income Tax circular, transactions done in the SLB shall not be regarded as transfer. These transactions are not liable to Securities Transaction Tax (STT).

Lenders benefit from incremental returns on idle portfolios, risk-free income, retained ownership rights, guaranteed settlement. Borrowers benefit from supporting trading strategies, covering short positions, arbitrage/hedging, and pair trading.

You transfer idle stock from demat account to exchange clearing house via broker. Exchange transfers stock to borrower who must return it on demand or at term end. Lender retains price appreciation benefits.

Borrow shares if bearish on stock; sell borrowed shares; repurchase at lower price; return shares to lender; profit equals price difference minus lending fees and costs.

The screen based trading terminal will display the per share lending fees as quote price. Fee can be quoted based on annualized yield or expected cost.

There is no counter party risk as the clearing corporation provides financial settlement guarantee for all SLB transactions.

SLB transactions are financially closed out; securities are returned to lenders along with lending fees.

Transaction closes with value computed as higher of: 25% of closing price on T+1 day, OR Maximum trade price from T to T+1 minus T+1 closing price.

Exchange conducts buy-in auction in capital market segment; borrower account debited with auctioned value.

Securities with derivatives in F&O segment, approved non-F&O securities, and approved index ETFs. Over 300 securities currently included. Securities lending and borrowing is permitted in dematerialized form only.

Yes. Upon receiving securities, margins levied on borrower are immediately released.

Exchanges list contracts with standardized stock return days: first Thursday of month and additional Thursdays creating stock return days.

Yes. Lenders enter recall transactions; borrowers make early repayment. Settlement occurs T+1 day. Recall orders allowed up to 3 days before reverse leg settlement.

Lender: T day 25% of lending price & MTM; dropped on T+1 settlement. Borrower: T day 100% of lending fees; T+1 100% of lending price, VaR, ELM & MTM.

Market-wide position limit equals 10% of shares held by non-promoters; client-level position limit equals 1% of MWPL in specific security.

Dividend: collected from borrower, passed to lender. Stock split: position adjusted per ratio. Bonus/AGM/Merger: foreclosure occurs, 2 days before ex-date.

Yes. Borrower enters repay order selecting 'Repay' order type. Partial quantity permitted.

Cash; Bank fixed deposits or guarantees; Equity shares in demat form; Government securities.

Application for activation SLB Facility is to be given by any registered client. No additional documentations are required.

Lender--deposits securities; Borrower--borrows securities; Lending Fees--execution price; First Trade Day--contract opens; Stock Return Day--reverse leg date; Last Trade Day--3rd business day before return; Recall--lender recalls; Early Return--borrower returns early.