Bursa Malaysia

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Securities Borrowing & Lending (SBL)

Securities Borrowing and Lending (SBL) is a facility offered by Bursa Malaysia to enable the borrowing and lending of securities. The two models of SBL currently offered are Central Lending Agency and Negotiated Transaction.

Overview

Central Lending Agency

Overview

Under this framework, Bursa Clearing (S) will act as a Central Lending Agency (CLA). As the CLA, Bursa Clearing (S) will borrow from lenders and onward lend to borrowers. Any person who has the requisite number of stocks may lend stocks to the CLA. On the other hand, only approved Participating Organisations i.e. local brokers qualify to become borrowers. Any other person who wishes to borrow stocks must go through the approved Participating Organisations. The lenders and borrowers must enter into an SBL agreement that will set out their rights and obligations.

The benefits that can be achieved with the implementation of Bursa Clearing (S) as the CLA are as follows:

  • Guarantee the fulfillment of all SBL transactions;
  • Provide a central location for the borrower to find information about the availability of securities for borrowing;
  • Manage risk associated with the borrowings; and
  • Provide a central location upon which all information regarding and borrowing and lending of shares can be obtained