SGX to relax securities lending rules
05 April 2011 Singapore
Image: Shutterstock
Singapore Exchange is to let market forces dictate the rate at which participants can borrow the securities of retail investors in a move that it says will increase liquidity.
Currently, retail investors can lend their stock scrips to SGX for a flat annual rate of four per cent. The exchange will then allow other parties to borrow the stocks at an annual rate of six per cent.
SGX says it plans to allow market forces to decide the interest rate on less liquid stocks, creating specials that can attract double-digit rates.
No timeframe has been set for the change to the current system
Currently, retail investors can lend their stock scrips to SGX for a flat annual rate of four per cent. The exchange will then allow other parties to borrow the stocks at an annual rate of six per cent.
SGX says it plans to allow market forces to decide the interest rate on less liquid stocks, creating specials that can attract double-digit rates.
No timeframe has been set for the change to the current system
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