Participants in the SGX Securities Borrowing and Lending (SBL) Programme, take note: From 2 Dec 2019, you will pay or receive fees that vary according to factors such as the supply and demand of the securities.

Currently, the borrower pays a fixed 6% per annum, which translates into the lender receiving 4% and Central Depository, 2%.

SGX said the 6% rate is generally higher than charged by other SBL providers -- and thus a deterrent for borrowers whose shares are kept at CDP. 

(Generally speaking, by the way, borrowers are shortists).

SGX said that with the upcoming switch to variable rate pricing, it expects a higher frequency of loans, which would increase the chances of lenders' securities being lent out. 

In a letter to SBL participants, SGX also said it is tweaking another aspect of the fee structure: Lenders will get a fixed 70% of the borrowing fee, which is higher than the current 66.67% (4% lending fee) of the borrowing fee.

In essence, it is a slightly higher percentage of a likely lower fee.

What will happen to your securities which are currently on loan?

Come 2 Dec 2019, existing loans switch over seamlessly to the new fee structure.

In other words, your income as a lender will be 70% of the prevailing borrowing rate that kicks in (and whatever borrowing rate that may fluctuate going forward).

By the way ...

• if you have not joined the SBL programme, the form is here. It's passive income for stocks that you generally consider longer-term holding and don't mind lending out to shortists or whoever.

• check out the current pool of shares available at CDP here. 

• check out our 2012 story (a bit old but the relevance is there): 

Share Prices

Counter NameLastChange
AEM Holdings3.560-0.070
Avi-Tech Electronics0.400-
BH Global0.320-
China Sunsine0.535-
Food Empire0.8850.005
Fortress Minerals0.5700.025
Golden Energy0.153-0.004
GSS Energy0.060-
ISDN Holdings0.6400.005
IX Biopharma0.240-0.005
KSH Holdings0.365-
Leader Env0.130-0.010
Medtecs Intl1.040-0.030
Moya Asia0.068-
Nordic Group0.245-0.010
Oxley Holdings0.245-
REX International0.1810.002
Southern Alliance Mining0.9650.005
Sri Trang Agro2.060-0.030
Straco Corp.0.555-
Sunpower Group0.8950.020
The Trendlines0.104-0.001
UG Healthcare0.660-0.040
Uni-Asia Group0.665-
Wilmar Intl4.980-
Yangzijiang Shipbldg1.5200.060
Yinda Infocomm0.1490.001

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