What action is taken if the borrower fails to bring securities at the time of reverse leg settlement?
If the borrower fails to deliver the securities, Exchange conducts a buy-in auction to acquire the securities on the reverse leg settlement date. If securities are not available in auction then the transaction is financially closed out at the below mentioned close out rate.
- Maximum trade price in the capital market segment of NSEIL from (reverse leg settlement day – 1 day) to reverse leg settlement day, OR
- 25% above the closing price of the security in the capital market segment on the reverse leg settlement day.
What action is taken if the borrower fails to bring the funds/collaterals on T+1?
The transaction shall be cancelled, however, the lending fee shall be collected and passed on to the lender.
What are the implication, if I fail to deliver shares which are lent by me in SLB segment?
In case you fail to deliver the shares lent by you, the transaction shall be closed out at a price which shall be higher of:
25% of closing price of the security on T+1 day (closing price for the security in the capital market segment of NSE),
(Maximum trade price of the security in the capital market segment of NSE from T to T+1 day) – (T+1 day closing price of the security in capital market segment of NSE)
What is the tenure for SLB transactions?
The tenure for SLB transactions is up to 12 months.
The fixed settlement dates are the first Thursday of the respective month and the date is displayed on the NEAT SLB trading screen at the time of order entry.
What is early recall of securities by the lender?
A participant having an existing lend position can recall a position by entering a recall order on the trading terminal. The lender shall quote the lending fee it wishes to forego for the balance period. In case the order is matched successfully then the settlement of the early recall transaction happens on a T+1 basis. After successful completion of pay-in, the position of the lender would cease to exist. Recall orders can be entered upto 3 days prior to the respective reverse leg settlement day.
What if I wish to sell shares which are lent by me in SLB?
In case, you wish to sell shares, you have the facility to place a “RECALL ORDER” on the order matching platform.
Will I get Corporate Action benefits, if any, on the shares lent by me?
The lender remain the beneficial owners of their shares and will be entitled for the corporate benefits like Dividends and Stock Splits.
In case of corporate actions other than dividend and stock split, all transaction would be foreclosed 2 days prior to ex-date and the contract will be treated as closed.
In case of dividend, the amount will be collected from the borrower by the Exchange and will be paid to the lender.
In case of stock split, the position of the borrower would be proportionately adjusted and the lender will receive the quantity of shares on the reverse leg settlement date.
Will there be any capital gain taxes on SLB trades?
Lending doesn’t mean selling and hence no short term capital gain tax (STCG) would be applicable. If the transaction goes to close out mode , then STCG tax would apply in case of any profit out of close out.
At what rate the brokerage will be charges for SLB trades?
Brokerage will be charged as a percentage to the Lending Fee.
Will there be any demat charges for SLB trades?
Depository charges are applicable for debiting shares from client demat account
Are there any charges like transactions charges & STT applicable for SLB?
Currently, there are no transaction charges and STT is also not levied in case of SLB transactions.
Who all can participate in SLB?
SEBI has permitted all categories of Investors viz. Retail and Institutional to participate in SLB.
Which securities are available for transactions in SLB?
Currently, securities traded in F&O segment are eligible for lending & borrowing in SLB
How can I register as a participant in SLB?
You shall have to submit duly signed “Rights & Obligations for SLB” along with other documents required for activation of trading account.
If you are a existing customer, you may submit duly signed “Rights & Obligations for SLB” to participate in SLB.