Frequently Asked Questions

Securities Borrowing

 How does a SBL transaction work?

Working Example

Client borrowed 10,000 securities of ABC securities on 2 July. He bought back 10,000 of ABC securities on 4 July and returned them on 9 July. Assuming (a) borrowing fee is 6% p.a. and (b) average of closing prices between 2 July and 9 July is $5, total cost incurred for an SBL loan will be calculated as follows:

  1. Admin Fee = $21.40
  2. CDP Settlement Fee = $0.75 (buy & sell contracts)
  3. Borrowing Fee = [6% / 365days x 8 days loan x 10,000 securities x $5 (average of closing price between 2 July and 9 July)] = $65.75
Therefore, Total cost = $21.40 + $0.75 + $65.75 = $87.90

Note: Charges & fees are inclusive of GST.


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