Stock lending provides financial institutions with an increasingly important source of liquidity. Gillian Gall and Kevin Cummings explain the tax rules.
What is stock lending?tock lending involves the temporary transfer of debt or equity securities from a ‘lender’ (typically a large fund or insurance company) to a ‘borrower’ (typically a dealer or hedge fund). In return the borrower promises to reverse the transaction by returning the same or equivalent securities on demand or on a fixed date. The borrower generally provides collateral (cash or non-cash) with a value equal to or greater than the loaned securities. The lender also receives a return in the form of an upfront fee or a portion of the interest it earns on cash collateral.At the end of 2011 the global stock lending market is reported to have...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
Stock lending provides financial institutions with an increasingly important source of liquidity. Gillian Gall and Kevin Cummings explain the tax rules.
What is stock lending?tock lending involves the temporary transfer of debt or equity securities from a ‘lender’ (typically a large fund or insurance company) to a ‘borrower’ (typically a dealer or hedge fund). In return the borrower promises to reverse the transaction by returning the same or equivalent securities on demand or on a fixed date. The borrower generally provides collateral (cash or non-cash) with a value equal to or greater than the loaned securities. The lender also receives a return in the form of an upfront fee or a portion of the interest it earns on cash collateral.At the end of 2011 the global stock lending market is reported to have...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
