Go to Securities Borrowing and Lending
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All expand | All closedGeneral Questions
1. What is Securities Lending and Borrowing(SBL)?
When a client borrows shares from Phillip Securities and sells those in the market, expecting the market and share price to fall. The client could then buy back at a lower price and take profit in the price difference.
2. What are the documentation and agreement requirements?
A client will only need to sign the "SBL agreement" given that they have already opened a securities account. Alternatively, the client could also open both in the stage of account opening.
3. What are the fees?
All outstanding loan fees will be collected once in month-end The client will also need to pay a one-time $270 account opening fee directly to the IRD.
4. Does it matter if my account is a cash or margin account?
We have no restriction on what type of account can open an SBL account.
5. Real-life SBL trading example
Given that the client performed a short sell on 22nd
On the 28th(Settle date)
Profit: $5,000 ($5 X 1,000)
Not including loan fees and other related charges
- They borrowed 9988.hk Alibaba 1000 shares and short sell at $175</> Assuming the client just opened the account; thus the $270 IRD fee will be deducted from their stock account.
- The order will also need to fulfill the margin agreement by 25% value in the stock account. In this case, it will be $43,750
- Transfer of $218,750 from stock to SBL account
- Transfer of 1,000 shares Alibaba to Stock accounts for settlement purposes
- The client decided to perform buy-back and contacted their responsible office to inform them they wished to close the position.
- For example: Buy-back 1,000 shares at $170 and informed their responsible officer
On the 28th(Settle date)
- Transfer of $218,750 from SBL to the stock account
- Transfer of 1,000 shares Alibaba from Stock to SBL account for the closing position
Profit: $5,000 ($5 X 1,000)
Not including loan fees and other related charges
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