Securities lending

What is SBL?

Securities Borrowing and Lending (SBL) is a temporary loan of securities between a lender and a borrower. This is done to allow the borrower who expects the price of a stock to fall to hold a short position for a longer duration, while the lender who loans the stock receives a lending fee from the borrower.

SBL is an important activity in many markets as it provides greater liquidity, tighter spreads, improved risk management, and possibly reduces the cost of capital.

How can I sign up for SBL?

Steps to open a SBL account for existing account holders:

1 Login to your POEMS account
2 Click on the “Account Management” tab
3 Click SBL
3 Submit the Account Opening Form

Don’t have an account?

Alternatively, visit any of our Phillip Investor Centres or contact your trading representative.

Why Securities Borrowing?

Through securities borrowing, you can short-sell without a need to buy back stocks within the same day, and also not face a “buy-in” by the relevant stock exchange.

When you anticipate a fall in the price of a stock, you can borrow the stock to short-sell and buy it back at a later date. Shorting is a classic strategy to make the best of a declining market, when the momentum of stocks or overall trend of the market is poor.

Benefits of Securities Borrowing:

Wide variety of stocks available
Ease of borrowing
No deposit required upfront
Sell through other brokerages
Potential tool to cover error trade
No fee for financing

Ready to sign up for Securities Borrowing?

Steps to open a SBL account for existing account holders:

1 Login to your POEMS account
2 Click on the “Account Management” tab
3 Click SBL
3 Submit the Account Opening Form

Don’t have an account?

Alternatively, visit any of our Phillip Investor Centres or contact your trading representative.

Why Securities Lending?

If you hold securities, you can lend them out while waiting to sell at the right price. Securities lending service acts as an avenue for you to earn a lending fee instead of letting your securities sit idle in your securities account.

This service potentially enhances the yield of your portfolio in a relatively low risk manner. Lending your securities will not cause any disruption to your trading activities as you can still sell your securities even if you have lent them.

Although there is a transfer of legal title of the securities to the borrower, you remain as the beneficial owner of the securities. This means that you will still be entitled to the economic benefits (such as dividends, bonus securities and rights issues) of the securities.

Benefits of Securities Lending:

Enhances yield of your portfolio
No minimum lock-in period
No disruption to trading activities
Hassle free lending arrangements

Ready to sign up for Securities Borrowing?

Steps to open a SBL account for existing account holders:

1 Login to your POEMS account
2 Click on the “Account Management” tab
3 Click SBL
3 Submit the Account Opening Form

Don’t have an account?

Alternatively, visit any of our Phillip Investor Centres or contact your trading representative.

Frequently Asked Questions

Securities Borrowing FAQ

The list of available securities and their respective quantity available for borrowing may differ from time to time. An updated list may be obtained from your Trading Representative (TR) or by logging into POEMS online.

You may borrow the securities online through POEMS or alternatively, you may contact your Trading Representative (TR) or email our SBL Desk at to borrow and confirm the status of your loan request.

For trading convenience, you may execute your trades through your POEMS Account. However, your short-sell and buy-back trades must be communicated to the Trading Representative (TR) for settlement through the SBL account on the same day when the trade is done.

Collateral must be deposited latest by the following day of the short-sell trade. Acceptable collateral can be in the form of cash or securities prescribed by Phillip Securities Pte Ltd.
The initial and maintenance margin ratio (MR) must be maintained above 130% of the market value of the borrowed and sold securities at all times.

Contracts (short-sell & buy back) should be settled through your SBL Account so that borrowed securities will be delivered on the due date of the sell contract.

When you buy-back the securities, you do not automatically return the borrowed securities. To return the borrowed securities, you must either return them via POEMS 2.0 (Acct Mgmt > SBL >Scrip Returning) or inform your Trading Representative (TR) of your request to return.

Interest charges will be computed as follows:

  • If securities are returned on purchase due date or earlier, interest will cease to accrue on the purchase due date
  • If securities are returned after due date of purchase, interest will cease to accrue two days after the return is done

Margin Ratio (MR) = Total Market Value of Collateral* / Total Market Value of Borrowed & Sold Securities Collateral includes:

  1. Sales proceeds from short-sell trades
  2. Cash pledged into SBL account
  3. Securities pledged into SBL account

You may want to note that only securities prescribed by Phillip Securities Pte. Ltd will be accepted as collateral and these acceptable securities will be assigned a collateralised value.

A margin call will be made if the market value of the borrowed and sold securities increases.
If the increase causes your margin ratio to fall below 130% (but above 120%), you will be informed through your Trading Representative (TR) and you will have to satisfy the margin call within 2 market days.
If the margin ratio drops below 120%, you will have to satisfy the call on the same day to restore the margin ratio to 130% of the borrowed and sold securities.

When a Customer borrows securities from Phillip Securities Pte Ltd (PSPL), the Customer will be required to deposit a required level of collateral. The Customer may be called upon at short notice to place additional deposits if the level of collateral is inadequate in relation to the market value of borrowed securities. If the required deposit is not made within the prescribed time, PSPL may buy-back the borrowed securities without prior notice to the Customer.

In addition, Customers also acknowledge that any and all collateral provided will be title transferred to PSPL as agreed in subsection 3.1 of Section 6 of the Conditions Governing Phillip Securities Trading Account and Customers will have no proprietary right to such collateral as against Phillip Securities Pte Ltd but only an unsecured debt obligation against PSPL, for the value against PSPL for the value of the collateral following the title transfer.

Securities Lending FAQ

All securities custodised with or in possession of Phillip Securities (including in any other account you may have with Phillip Securities) will also be made eligible for on-lend services.
To make your existing securities that are custodised in your direct securities account with the Central Depository Pte Ltd (CDP) available for loan, you will need to transfer those securities from your direct securities account to your SBL account by submitting a “CDP 4.2 Request for Transfer of Securities” form.

You may check your lending position by logging into POEMS Online which sets out the securities lent and quantity. Lending fees will be paid on a monthly basis and credited to the lender’s trading or SBL account.

  • Counterparty Risk – However, this risk is mitigated in that a lender only looks to Phillip Securities, a reputable financial institution, as the borrower. Phillip Securities in turn requires the borrowing clients to provide collateral of at least 105% of the market value of the loan when it on-lends securities to them.
  • Temporary Loss of Ownership Rights – When entering a lending agreement, a lender will temporarily lose ownership rights to the securities. In its place, the lender has a right to claim for equivalent securities from Phillip Securities. As the lender receives manufactured dividends, he / she may be required to treat the entire amount received as income for tax purposes

When the Customer lends securities to PSPL, the Customer temporarily loses legal ownership rights to the securities but in place, has the right to claim equivalent securities. As the Customer receives manufactured dividends, the Customer may be required to treat the entire amount as income for tax purposes.



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