September 2012
Beginner
328 pages
7h 42m
English
A securities lending transaction is a temporary transfer of legal title in a security from one party to another; the transaction is often collateralised by a matching temporary transfer of assets or cash in the opposite direction. Securities borrowing is the same transaction viewed from the counterparty’s point of view.
A dealer may sell a particular security which he does not already own. That is, he deliberately establishes a short position because he expects the price to fall so that he can buy the security back later for a profit. He must, however, deliver on the sale, even though he does not have the bond. If he does not deliver, the deal is not cancelled and he is still liable for ...
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