CHAPTER 10Securities Lending & Borrowing and Collateral – Principles of SL&B
10.1 PRINCIPLES OF SECURITIES LENDING
The particular circumstances giving rise to securities lending include:
increasing the return on investment
reducing the cost of holding securities, and
reducing taxation through arbitrage strategies.
It is important to remember that throughout the period of any SL&B trade, the securities lender retains an investment (or economic) interest in the particular security; consequently, the securities lender remains exposed to fluctuations in price and value (despite the fact that the security ...
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