What is the settlement date for an SLBS contract?
The settlement date for an SLBS contract is the first Thursday of the concerned month.
The Securities Lending & Borrowing Scheme (SLBS) is a system through which traders can borrow shares (that they do not own) or lend shares that they own. The borrower in an SLBS transaction is required to pay the lender certain fees for borrowing securities for a fixed period.
Understanding the settlement date is important for knowing when obligations such as the return of securities and funds are completed. All SLBS contracts have a pre-defined settlement cycle. The settlement date for an SLBS contract is the first Thursday of the concerned month.
How the SLBS Settlement Works?
- When an SLBS contract is initiated, securities are lent or borrowed for a fixed period.
- At the end of the contract:
- Securities are returned to the lender’s demat account
- The borrower’s margin is released after settlement
Points to remember :
- The borrower is required to maintain margins and daily MTM to ensure there is no borrower default risk.
Failure to maintain required margins may result in penaltie.
What charges are applicable for lending through SLBM?
A brokerage fee of 15% is charged on the SLBM lending fee. In addition to this, 18% GST is charged on the brokerage amount. Apart from brokerage and GST on brokerage, no other charges (STT, exchange levy, etc.) are applicable.
Live SLBM rates are available and integrated into the Flip mobile application.
FAQ
- What is the Securities Lending & Borrowing Scheme (SLBS)? How does it work? (Step-by-Step Process)
- How can I activate the Securities Lending & Borrowing Scheme (SLBS) ? facility?
- What is the Reverse Leg Settlement Day / Stock Return Day?
- What are benefits of lending and borrowing securities?
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