Program Brief

Stock lending and short selling are usually done when it is believed that the stock price will fall, so the borrower can make profits by selling the shares at their current price, buying them back at a lower price and returning them to the lender. This training program is designed to explain the mechanism of securities lending; It also covers risk and its management and regular reassessment of both the lender/borrower's security and its associated guarantees; As well as decisions related to profits and the regulations and procedures governing this activity.

Program Goals

At the end of the training program, the participant should be able to:

  • Understand the basics of securities lending to define the roles and responsibilities of each party within the securities lending market.
  • Understand the operational, legal and regulatory risks and related issues to determine the appropriate course of action to manage these risks.
  • Understand the advantages / disadvantages of using different types of guarantees to choose the right ones for each case.
  • Measuring the impact of companies’ actions on loaned securities to determine their impact on securities guarantees.
Program Agenda
Module 1: Securities Lending: The Fundamentals
  • 1 What is Securities Lending?

    • 2 The Purpose: Why Do Lenders Lend

      • 3 Participants and structure

        • 4 Trading Strategies

          Module 2: The Marketplace: Participants
          • 1 Lenders, Borrowers, and Intermediaries

            • 2 The Lender’s Perspective: Motivations and Considerations

              • 3 The Borrower’s Perspective: Motivations and Considerations

                • 4 Third-party lending agents

                  • 5 Central counterparties

                    Module 3: Securities Lending: Trade Lifecycle
                    • 1 Pre-trading, Locates

                      • 2 Trade execution

                        • 3 Pre-settlement

                          • 4 Settlement

                            • 5 Buy-ins

                              • 6 Mark to Market and Margin calls

                                • 7 Recall/return of lent settlements

                                  • 8 Fees

                                    Module 4: Securities Lending: Assets
                                    • 1 Equity vs Fixed Income

                                      • 2 Fundamental collateral concepts

                                        • 3 Margin: Purpose

                                          • 4 Types of collateral

                                            • 5 Re-hypothecation

                                              Module 5: Legal Documentation
                                              • 1 Global Master Securities Lending Agreement (GMSLA)

                                                • 2 Securities lending agency agreement

                                                  • 3 Global Master Repurchase Agreement (GMRA)

                                                    Module 6: Updating Books
                                                    • 1 Securities bookkeeping: Definition

                                                      • 2 Importance of updating books

                                                        • 3 Updating books and records for lent/borrowed securities, cash and non-cash collateral, fees and rebates

                                                          Module 7: Securities Lending and Corporate Actions
                                                          • 1 Corporate actions: Overview

                                                            • 2 Income

                                                              • Cash dividends

                                                                • Lent securities

                                                                  • Short sale proceeds

                                                                    • Lent/borrowed equity

                                                                    • 3 Voting

                                                                      • 4 Tax

                                                                        Module 8: Risks in Securities Lending
                                                                        • 1 Risks and mitigating factors

                                                                          • Credit Risk

                                                                            • Market Risk

                                                                              • Legal Risk

                                                                                • Operational Risk

                                                                                  • Reputation Risk

                                                                                  Module 9: Current and Future Regulatory Framework Impacting Securities Lending
                                                                                  • 1 Introduction to Regulations

                                                                                    • 2 EU Short Selling

                                                                                      • 3 Securities Finance Transactions Reporting

                                                                                        • 4 Central Securities Depository Regulations

                                                                                          • 5 Liquidity Coverage Ratio/ Net Stable Funding Ration

                                                                                            • 6 Uncleared Margin Rules

                                                                                              Module 10: Securities Lending Controversies
                                                                                              • 1 Global Financial Crisis (GFC) Causal Factors

                                                                                                • 2 Capital and Leverage

                                                                                                  • 3 What Happened in Securities Finance?

                                                                                                    Program Requirements
                                                                                                    • Basic understanding of securities and investments

                                                                                                    .

                                                                                                    Program Path

                                                                                                    Names of the training programs that are integrated (enriched) with the training program:

                                                                                                    • Not Available

                                                                                                    Names of the training programs that after the training program:

                                                                                                    • Not Available
                                                                                                    Program Method
                                                                                                    • Lecture
                                                                                                    • Case Studies
                                                                                                    • Dialogue Teams
                                                                                                    Evaluation Method
                                                                                                    • Pre Exam
                                                                                                    • Post Exam
                                                                                                    Training Type
                                                                                                    • In Class Training
                                                                                                    • Online Training

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