Securities Lending & Borrowing - Operational Challenges
Download brochure Securities Lending & Borrowing has been an important activity within the securities marketplace for many years. Firms that choose to lend their equities and/or bonds do so in order to earn lending fees and to enhance their investment returns. Conversely, firms that choose to borrow securities typically do so primarily to meet delivery commitments and to receive sale proceeds in a timely fashion.

However, undertaking securities lending & borrowing transactions is not without risk. The mitigation of exposures is an essential daily task, involving the regular revaluation of both the lent/borrowed security and the associated collateral. Companies are also required to make margin calls on the counterparty and settlement of such margin calls.  

Additionally, corporate actions may arise which can impact the lent security and/or securities collateral.

It is therefore of paramount importance that those responsible for processing such transactions possess a clear understanding of the risks involved, their potential exposures and critically, what mitigating measures are necessary.

By completing the course you will:
  • Appreciate why firms engage in securities lending & borrowing
  • Understand the primary content of securities lending legal agreements and how firms are impacted operationally
  • Identify the operational level risks and best practice mitigation methods
  • Comprehend the advantages/disadvantages of using different types of collateral
  • Understand each step in the trade and collateral lifecycle
  • Appreciate the impact that corporate actions have on the lent security and on securities collateral

Who should attend?

The course is suitable for personnel working within many departments of financial institutions such as operations, middle office, risk, legal, accounting and IT. The course is applicable to buy and sell-side firms, plus those working within central securities depositories and custodians.  

The course is targeted towards those currently working within a securities lending department who would benefit from an all-round understanding of the topic. In addition, those who have had limited exposure to the topic but who require a greater understanding of the relationships between their work and securities lending & borrowing.   

Details of the next seminar

2-3 April 2020

Programme Recognition

Candidates who attend the Securities Lending & Borrowing - Operational Challenges programme and are CFA Charter Holders qualify for 13 credit hours which can be used towards study with the CFA Institute. CFA Institute members are encouraged to self-document their continuing professional development activities in their online CE tracker.

Course Trainer
Download brochureThe course content is divided into several topic areas, which are then broken down into multiple subtopics:

1. Fundamental Securities Lending & Borrowing Concepts
  • Nature of the trade
  • Introduction to securities lending
  • Introduction to securities borrowing
  • Primary characteristics of the trade

2. Securities Lending & Borrowing Trade Lifecycle - An Overview
  • Legal documentation
  • Trade execution
  • Opening & closing leg settlement
  • Exposure calculation
  • Margin calls
  • Recall/return of lent settlements
  • Settlement of fees

3. Securities Lending & Borrowing Marketplace Participants
  • The lender community
  • The borrower community
  • Intermediaries

4. The Lender’s Perspective
  • The motivation to lend
  • Considerations when lending

5. The Borrower’s Perspective

  • The motivation to borrow
  • Considerations when borrowing

6. Legal Documentation
  • Reasons for legal protection
  • The GMSLA
  • Securities lending agency agreement
  • The GMRA

7. Characteristics of the Lent/Borrowed Security

  • Characteristics of equity
  • Characteristics of bonds
  • Lent equity versus lent bonds

8. Securities Lending & Borrowing and Associated Collateral

  • Fundamental collateral concepts
  • Margin: Purpose & use
  • Types of collateral
  • Collateral and SL&B Fees

9. The Securities Lending & Borrowing Trade Lifecycle
  • Pre-trading
  • Trade execution
  • Pre-settlement
  • Settlement of opening leg
  • Throughout lifetime of trade
  • Settlement of closing leg
  • Settlement of fees

10. The Securities Lending & Borrowing Trade Lifecycle Simulation

A step-by-step exercise involving delegates (working in teams) performing all essential tasks relating to a trade, including daily fluctuating market values of the lent security – using cash collateral.

11. Updating Books & Records
  • Securities bookkeeping: Definition & purpose
  • Essential securities bookkeeping concepts
  • Importance of updating books & records
  • Updating books and records for lent/borrowed securities
  • Updating books and records for non-cash securities
  • Updating books and records for cash collateral
  • Updating books and records for fees and rebates

12. Accessing the Securities Lending & Borrowing Marketplace
  • Bilateral lending & borrowing
  • ICSD’s: Failed trades management
  • ICSD’s: Tri-party agent
  • Global custodians
  • Third-party lending agents
  • Central counterparties

13. Securities Lending & Borrowing and Corporate Actions

  • Introduction to corporate actions
  • Corporate actions lifecycles: Overview
  • Treatment of income: Cash dividends
  • Entitlement to income on lent securities
  • Treatment of income: Short selling of equity
  • Treatment of income: Lent/borrowed equity
  • Treatment of income: Equity collateral
  • Treatment of income: Lent bonds & bond collateral
  • Treatment of voting rights
  • Treatment of withholding tax

14. Securities Lending & Borrowing and Regulation

  • Introduction
  • EU financial transactions tax
  • Reporting to a central trade repository

15. Risks in Securities Lending & Borrowing
  • Risks: Lender’s perspective
  • Risks: Borrower’s perspective

Please note:

Please bring to the course a normal/standard calculator that is capable of accepting at least 12 digits (e.g. 999,999,999.99); examples of such calculators are the Office Depot AT-814 and the Canon LS-123K.
Details of next course


2-3 April 2020

ICE Education
5th Floor Milton Gate
60 Chiswell Street
London EC1Y 4SA
United Kingdom


For security reasons, delegates who have not registered in advance will not be admitted to this course.  Delegates will be required to provide photo identification on arrival, to ensure entry.


ICMA Members: £1,650.00 + VAT if applicable
Non Members: £1,950.00 + VAT if applicable


Should you have any queries, please contact

Join ICMA Executive Education on: