The Ultimate Guide to Securities Lending in Singapore
Securities lending in Singapore is an increasingly popular option for investors seeking to maximise profits. Investors can earn additional income while minimising risk by taking out a loan against the value of stocks, bonds, and other securities held in a portfolio.
This guide will provide all the information you need to understand how securities lending works in Singapore and make informed investment decisions.
What is securities lending?
Securities lending is borrowing securities from one party and lending them to another party for a fee. The borrower receives money in exchange for temporarily relinquishing ownership of their assets which they get back when the loan period expires.
Meanwhile, the lender earns interest on their investment by loaning out these assets at a higher rate. This is a win-win situation for both parties as the borrower gets access to capital while the lender earns additional income.
What are the benefits of securities lending in Singapore?
There are many advantages to securities lending in Singapore. It provides an efficient and cost-effective way to access capital without selling investment portfolios. Furthermore, securities lending gives investors greater control over their financial decisions by allowing them to set their loan terms and negotiate interest rates with lenders.
Additionally, compared to traditional forms of borrowing, securities lending often carries fewer restrictions, making it easier for borrowers to get the funding they need quickly and without a lengthy application process. Since the loans are secured against the value of the borrower’s assets, it is considered a low-risk way to access capital.
How do you get started with securities lending in Singapore?
The first step to getting involved in securities lending is finding a broker or lender to help you with the process. The Securities Investors Association (Singapore) provides an online directory of approved brokers, websites such as home.saxo…