Comment on Basics on SLB (Stock Lending & Borrowing)

JAXBAXMAX commented on 12 Dec 2022, 11:00 PM

The only risk a lender has would be the close-out risk (When the borrower defaults but gets the credit of shares from AI(NSCCL) using the 125% of borrower margin blocked by having an auction to purchase those shares). This close-out credit of shares is deemed a sale transaction and if the stock has made any gain from the time the lender had purchased, a short-term capital gain tax would apply to the gain.

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