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Securities Lending & Borrowing - Operational Challenges
Securities Lending & Borrowing has been an important activity within the securities marketplace for many years. Firms that choose to lend their equities and/or bonds do so in order to earn lending fees and to enhance their investment returns. Conversely, firms that choose to borrow securities typically do so primarily to meet delivery commitments and to receive sale proceeds in a timely fashion.

However, undertaking securities lending & borrowing transactions is not without risk. The mitigation of exposures is an essential daily task, involving the regular revaluation of both the lent/borrowed security and the associated collateral. Companies are also required to make margin calls on the counterparty and settlement of such margin calls.  

Additionally, corporate actions may arise which can impact the lent security and/or securities collateral.

It is therefore of paramount importance that those responsible for processing such transactions possess a clear understanding of the risks involved, their potential exposures and critically, what mitigating measures are necessary.

By completing the course you will:
  • Appreciate why firms engage in securities lending & borrowing
  • Understand the primary content of securities lending legal agreements and how firms are impacted operationally
  • Identify the operational level risks and best practice mitigation methods
  • Comprehend the advantages/disadvantages of using different types of collateral
  • Understand each step in the trade and collateral lifecycle
  • Appreciate the impact that corporate actions have on the lent security and on securities collateral

Who should attend?

The course is suitable for personnel working within many departments of financial institutions such as operations, middle office, risk, legal, accounting and IT. The course is applicable to buy and sell-side firms, plus those working within central securities depositories and custodians.  

The course is targeted towards those currently working within a securities lending department who would benefit from an all-round understanding of the topic. In addition, those who have had limited exposure to the topic but who require a greater understanding of the relationships between their work and securities lending & borrowing.   

Course Director

Mike Simmons is an operations specialist and the Programme Director for ICMA’s Operations stream of training courses. He has been involved with the capital markets and operations throughout his career, focusing originally upon securities settlement and more recently on the broader aspects of operations.

Mike is the author of several books on operations including ‘Securities Operations: A Guide to Trade & Position Management’. In addition to the Securities Lending & Borrowing course, Mike is the Programme Director for the Operations Certificate Programme (OCP), the Securities Operations Foundation Course (SOFC) and teaches various specialist operations courses.

The course content is divided into several topic areas, which are then broken down into multiple subtopics:

1. Fundamental Securities Lending & Borrowing Concepts
  • Nature of the trade
  • Introduction to securities lending
  • Primary characteristics of the trade

2. Securities Lending & Borrowing Trade Lifecycle - An Overview
  • Legal documentation
  • Trade execution
  • Opening & closing leg settlement
  • Marking-to-market
  • Margin calls
  • Recall/return of lent settlements
  • Settlement of fees

3. Securities Lending & Borrowing Marketplace Participants
  • The lender community
  • The borrower community
  • Intermediaries

4. The Lender’s Perspective
  • Types of lending
  • Routes to market
  • Operational considerations
  • Recall of lent securities

5. The Borrower’s Perspective
  • Reasons for borrowing

6. Risks in Securities Lending & Borrowing
  • A detailed look at the risks involved from both a lender and borrower’s perspective

7. Legal Documentation
  • Reasons for legal protection
  • The GMSLA & GMRA

8. The Lent/Borrowed Security
  • Equity
  • Bonds
  • ETF’s

9. Securities Lending & Borrowing and Associated Collateral
  • Fundamental collateral concepts
  • Types of collateral
  • Securities versus collateral combinations
  • Margin
  • Ongoing exposure management

10. Trade Terms
  • Specific security & quantity
  • Duration of loan
  • Eligible collateral
  • Fee
  • Icing of Securities

11. Trade Components
  • Trade components and trade cash value calculations of both equity and bonds

12. Updating Books & Records
  • Importance of this task
  • Updating for lent/borrowed securities
  • Updating for collateral
  • Updating for fees

13. The Securities Lending & Borrowing Trade & Collateral Lifecycle
  • Pre-trading
  • Trade execution
  • Pre-settlement
  • Settlement of opening leg
  • Throughout lifetime of trade
  • Settlement of closing leg
  • Settlement of fees

14. The Securities Lending & Borrowing Trade & Collateral Lifecycle Simulation
  • A step-by-step exercise involving delegates (working in a team) performing calculations of trade values over a number of days, where values of the lent security and collateral fluctuate daily

15. Securities Lending & Borrowing Vs. Special Repo

16. Other Securities Lending & Borrowing Structures
  • Tri-party securities lending & borrowing
  • Central clearing of securities lending & borrowing

17. Alternatives to Securities Lending & Borrowing
  • Equity swaps
  • Equity repo
  • Contracts for difference
  • Single stock futures

18. Corporate Actions on Lent/Borrowed Securities & Associated Collateral
  • Introduction to corporate actions
  • Corporate actions on lent equity/bonds
  • Corporate actions on equity/bond collateral
Details of the next seminars

30 November - 1 December 2015


2-3 May 2016



International Capital Market Association (ICMA) Limited
3rd Floor
23 College Hill
London EC4R 2RP
United Kingdom


The cost is £1,250.00 for ICMA Members and £1,650.00 for non-members.

The course fee includes all lunches, coffee breaks and training materials.

Payment can be made by secure online credit card or by invoice. Please note that selecting the invoice method will add £50 (administration fee) to the course price.  Multiple candidates from the same company can request one invoice, thus reducing the overall administration fee.

Cancellation charges

Registrations for classroom-based courses are transferable to another person within the same company.

All classroom-based courses are subject to the following cancellation charges:
  • 1-7 calendar days: 50% of the gross course fee
  • Course start date or thereafter: no refund will be given
Refunds will only be processed after the completion of the relevant course and after return of any course material already provided to you. Any such material must be returned undamaged and at your own expense.

Registrations for online courses are non-transferable and non-refundable.

Please note:

The course is a non-residential learning programme, so candidates are responsible for arranging their own travel and accommodation.

Course materials will be provided to candidates in electronic format prior to the start of programme. Please ensure that you have access to this document during the course by either printing off a copy or by downloading it on your laptop, iPad or tablet.

Should you have any queries about the Securities Lending & Borrowing course please contact education@icmagroup.org


Fixed Income Certficate (FIC)