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:
- Admin Fee = $21.40
- CDP Settlement Fee = $0.75 (buy & sell contracts)
- 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
Note: Charges & fees are inclusive of GST.
Other faq that might help you
- What are the key advantages of using SBL facilities as opposed to other short selling tools?
- How do I open a SBL account with Phillip Securities?
- Do I have to sell through Phillip Securities after I have borrowed the securities from Phillip Securities?
- How many times can I leverage on my capital through using Phillip Securities’ SBL facilities?
- How do I perform the short trade?
- Can I sell directly to the highest bidder (highest buyer’s price) using SBL facilities?
- Do I need to put in any collateral after I have sold the securities?
- How do I compute the value of collaterals required (initial margin & maintenance margin) for the securities I borrowed?
- What are the securities available for borrowing?
- What happens if the securities that I have sold have corporate actions such as dividend distributions, bonus issues or rights issues?
- What do I need to take note of when I intend to short sell the securities during a corporate action entitlement (dividend / bonus / rights) period but only buy back after the ex-date?
- After I have bought back the securities, do I have to return the securities?
- What happens if there is a recall of the loaned securities?
- How is a margin call computed?
- How do I satisfy a margin call?
- Is there a maximum period I can borrow the securities?
- Is there a minimum period I can borrow the securities?
- Can I withdraw the securities borrowed?
- Can I withdraw the cash / securities collateral?
- What will be the charges incurred for a SBL loan?
- Are there any other relevant charges?
- Do I get paid for credit cash balances?
- Do I need to disclose my Short Selling positions?
Did this answer your question?
