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): 


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AEM Holdings1.2800.020
AusGroup0.022-
Avi-Tech Electronics0.3450.005
Best World Int.1.360-
CEI0.950-
China Sunsine1.140-0.010
CNMC GoldMine0.260-0.010
CSE Global0.470-
Eagle HTrust USD0.660-
Food Empire0.515-0.005
Golden Energy0.169-
GSS Energy0.0710.001
ISDN Holdings0.2150.005
ISOTeam0.230-
JB Foods0.660-
KSH Holdings0.450-
Miyoshi0.035-
Moya Asia0.063-0.002
Nordic Group0.270-
Oxley Holdings0.315-0.005
Procurri0.365-
REX International0.0930.005
Riverstone0.9800.010
Roxy-Pacific0.375-
Sing Holdings0.385-
SingMedical0.310-
Straco Corp.0.720-0.020
Sunningdale Tech1.200-
Sunpower Group0.480-
The Trendlines0.0890.001
Tiong Seng0.200-
Uni-Asia Group0.715-
Yangzijiang Shipbldg0.940-0.010

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