Securities Lending and Borrowing

Institutional investors are increasingly joining securities lending programmes to generate attractive returns on assets that would otherwise remain idle. HSBC's securities lending programmes allow clients to retain full beneficial ownership (with the exception of voting rights) of loaned securities throughout the term of a loan. Clients participating in a lending programme are able to sell securities at any time and retain the right to recall a loaned security should they wish to exercise a voting right or participate in a corporate event.

Institutional investors participate in securities borrowing programmes mainly to pursue portfolio strategies such as arbitrage and short selling.

HSBC offers both principal and agency programmes in selected markets. These individually tailored programmes enable our clients to take advantage of HSBC's following unique strengths:

Global reach and local presence: HSBC's securities lending and borrowing trading desks in London, New York, Paris, Johannesburg and Hong Kong SAR provide global, round-the-clock coverage.

International network of counterparties: As a major player in the international securities lending and borrowing market, HSBC is able to maximise the earning potential of our customers' lending assets and borrow securities reliably via an established network of market contacts.

Market-leading rates of return: HSBC's global reach enables us to provide customers with unrivalled distribution channels for their assets, and ability to borrow at competitive rates.

Proven track record: HSBC's lending and borrowing group is staffed by experienced industry professionals and underpinned by a global securities lending processing platform.

HSBC also provides automated settlement coverage programmes in selected markets. We actively monitor participating clients' transactions, and automatically borrow securities to cover any failing positions. This maximises settlement efficiency and reduces the incidence of costly settlement failures and reputation risk.

For more information on HSBC's Custody and Clearing services, please contact our customer relationship management teams.