The Securities Borrowing Account allows you to borrow shares for immediate covered short-selling. It allows you to tap on opportunities even if the market trend seems to be going downward.

Minimum borrowing quantity is just 1 board lot of the share! With Securities Borrowing, you can now engage in covered short selling, arbitrage, hedging or other trading opportunities.

The value of securities that you can borrow is up to 2 times the value of the SBL Collateral (i.e.: Cash/ Marginable Securities) you have provided to OCBC Securities.

For example:

¹ The value of SBL Collateral refers to the market value of either the cash or the marginable securities that you have put up as collateral.

² The available value for Borrowing after leveraging refers to the value that is available for borrowing after leveraging from the value of the SBL Collateral.

³ Subject to OCBC Securities’s discretion to impose another percentage The maintenance limit to is usually 150%

How the Maintenance Limit is calculated :

=  Total Market Value of SBL Collateral X  100  

    Market Value of Securities Borrowed

= $15,000  X  100
     $10,000 

= 150%

Market Risk

Clients who intend to short the market bear the risk of unlimited losses. There is no cap to the upside of a share price.

Margin Risk

Clients have to maintain a maintenance limit of 150% at all times. Otherwise, a limit call would result, and borrowing of shares and withdrawal of cash and securities would not be allowed. In certain circumstances, failure to meet the limit call may result in liquidation of your collateral to purchase back the borrowed securities, and bring the maintenance limit to not less than 150%.

Recall Risk

In the event of a corporate action, OCBC Securities may recall all the securities borrowed in respect of that counter. Clients have to close their positions and inform their Trading Representatives to return the shares. A forced buy-back by OCBC Securities may be carried out for clients who fail to do so.

Tell me more about Securities Borrowing!  

The OSPL Standard Trading Terms and Conditions  in particular Section D, Terms and Conditions Governing Securities Borrowing apply   

For more information, contact us  today!

RISK WARNING FOR SECURITIES BORROWING & LENDING

Borrowing to finance the trading of securities (leveraging/gearing) or to cover your short selling activities carries a high degree of risk. If the value of the collaterals fluctuates substantially, falling below the maintenance margin requirement, you may be called upon to deposit substantial additional funds on short notice in order to maintain your position. If you fail to comply with a request for additional funds or reduce your loan within the specified time, your position may be liquidated at a loss and you will be liable for any resulting deficit in your account. 

Disclaimer

Trading in securities can be very risky, and the customer may lose all or more than the amount invested or deposited. This is particularly so when the customer needs to i) make his or her own trading decisions and ii) ensure each trade is specifically suitable for him or her – the only basis for any trading through or with OCBC Securities Private Limited (“OSPL”).  The information provided herein is intended for general circulation/discussion purposes only and may not be published or circulated (in whole/in part) without our written consent. It does not take into account the specific investment objectives, financial situation or particular needs (collectively “Objectives”) of any particular person. Please seek advice from an independent financial adviser regarding the suitability of any trade or investment product taking into account your Objectives before making a commitment to trade or purchase the investment product. If you choose not to seek independent financial advice, please consider whether the trade or product in question is suitable for you. This does not constitute an offer/solicitation to buy/sell/subscribe for any investment products or to participate in any particular trading or investment strategy. Any proposed transaction is subject to the final expression of the terms in the definitive agreement/confirmation. No representation or warranty whatsoever (including without limitation any representation or warranty as to accuracy, usefulness, adequacy, timeliness or completeness) in respect of any information (including without limitation any statement, figures, opinion, view or estimate) provided herein is given by OSPL and it should not be relied upon as such. OSPL does not undertake an obligation to update the information or to correct any inaccuracy that may become apparent at a later time. All information presented is subject to change without notice. OSPL shall not be responsible or liable for any loss or damage whatsoever arising directly/indirectly howsoever in connection with or as a result of any person acting on any information provided herein.