SGX Securities Lending

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The 8th ACG Cross Training Seminar

• SGX Securities Lending

27 28 June 2006
Singapore Exchange
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Overview

• SBL process and model
• What we do
• Tax guidelines Regulatory updates
• QA

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AUTOMATED PROCESS
CDP
Clearing Member / Depository Agent (Borrower)
Lending Pool
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SIMPLY..
Borrowers
Lenders
CDP
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CDP SBL MODEL

• Lenders CDP account holders
• Borrowers Depository Agents/Clearing Members
• Facility Borrowing period are
• -T 3 borrowing period
• - Open dated Lending (subject to recall)
• Borrowing fee is non-negotiable
• First come first serve basis
• Same day borrowing (cut-off time 11.00am)
• Can return partial or full anytime
• Minimum size is 1,000 shares

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SBL RISK MANAGEMENT

• Borrowing limit per borrower and in total
• Lending pool limit 25
• Concentration limits (eg. each borrower to borrow
  no more than 5 of the listed company issued
  capital)
• Loans and collateral are marked-to-market at
  least once daily
• ? Cash and LC collateral at least 105 of loan
  value
• ? Securities collateral at least 130 of loan
  value

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TAX GUIDELINES

• Transfer of securities and collateral will not be
  regarded as a disposal.
• Lending fee and rebate fee arising from SBL is
  tax exempted.
• Manufactured dividend is taxable.
• For non-residents, lending fee received is
  grossed, no withholding tax.

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Questions ?