Comment on Basics on SLB (Stock Lending & Borrowing)
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.