Securities lending is a type of securities financing transaction in which a security such as a bond or stock is loaned to a borrower, who puts up collateral and pays a fee. Securities lending may be used to transform low-quality assets into higher-quality collateral that is eligible for use in other transactions. A security, such as a stock, may also be borrowed to fill a short position, facilitate market-making, cover settlement or to arbitrage.
SECURITIES LENDING
