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Securities Lending

Lend securities for a fee. Borrower posts collateral and pays lending fee. Lender retains economic ownership.

Liquidity & Collateral
Complexity
Basic
Deal Size
$10M - $1.0B
Typical Tenor
1-3 months
Scalability
High
#liquidity#securities#fee-income#collateral
Mini Map

Flow Types

Securities
Collateral
Fee

Transaction Timeline

Phase 1: Loan Initiation(T+0)

Securities and collateral exchanged.

Use Cases

  • •Generate incremental income on held securities
  • •Enable short selling and market making
  • •Facilitate settlement and fail coverage
  • •Collateral transformation

Problem Solved

Monetizes idle securities holdings while maintaining economic exposure.

Revenue Calculator

Model deal economics

$100M
$10M$1.0B
20 bps
5 bps200 bps
10 bps
0 bps

Projected Revenue

Gross Carry Income$100,000
Funding Cost($50,000)
Net Carry$50,000
Upfront Fees$0
Total Revenue$50,000
Annualized Return
10.0 bps
If Repeated Annually
$100,000

Revenue Sources

Carry Income

Securities Lending Fee10-50 bps

Fee paid by borrower for use of securities

Monthly
Cash Collateral Reinvestment5-15 bps

Spread earned reinvesting cash collateral

Monthly

Fee Income

Regulatory Checkpoints

Collateral AdequacySFTR / Local Rules

Minimum collateralization and daily margining required.

Risk Flags

Borrower DefaultMedium

Borrower fails to return securities.

Mitigation:Overcollateralization, indemnification, credit limits.
Cash Reinvestment RiskMedium

Losses on cash collateral reinvestment.

Mitigation:Conservative investment guidelines, duration limits.