Securities Lending
Description
Securities lending is a crucial practice in capital markets that enhances liquidity, reduces trading costs, and promotes price discovery. This course provides a comprehensive overview of securities lending, covering its role in the financial markets, market mechanics, risks involved, and the motivations for lenders and borrowers.
The course begins with an overview of securities lending, explaining its importance in providing liquidity and reducing trading costs in both rising and falling markets. Participants will understand how securities lending contributes to market efficiency and benefits various market participants, including securities dealers, investors, and corporate issuers.
Next, the course explores the participants involved in securities lending, including lenders, intermediaries, and borrowers. Participants will learn about the roles these entities play in the securities lending market and their motivations for participating in securities lending transactions.
The training then covers the mechanics of the securities lending market, including how securities are borrowed and lent, the role of custodian banks and prime brokerage arms, and the types of transactions that take place.
The course continues with an exploration of the motivations for borrowing securities, which include short selling, market making, and financing strategies. Participants will gain insights into how securities lending supports trading strategies and enhances market liquidity.
Next, the course addresses the risks associated with securities lending, including counterparty risk, operational risk, and market risk. Participants will learn about the measures used to manage and mitigate these risks in securities lending transactions.
By the end of this course, participants will be able to:
- Understand the role and importance of securities lending in capital markets.
- Describe the motivations for lenders and borrowers in securities lending transactions.
- Explain the mechanics of the securities lending market, including the roles of lenders, intermediaries, and borrowers.
- Evaluate the risks associated with securities lending and the measures used to manage these risks.
- Analyze the impact of securities lending on market efficiency and liquidity.
This training course equips participants with comprehensive knowledge of securities lending, enabling them to understand its role in capital markets, its mechanics, risks, and its impact on trading strategies and market efficiency.
is issued on the Luxoft Training form
Objectives
To provide the audience with an understanding of the distinguishing features of Securities Lending, their participants, market mechanics, and risks.
Target Audience
Testers, System and Business Analysts, Architects, Developers, and Project Managers working on financial markets projects
Prerequisites
Completed introductory training in financial markets and investment banking or possess equivalent knowledge.
Roadmap
- Overview of securities lending (1 hour)
- Lenders and intermediaries (1 hour)
- The borrowing motivation (1 hour)
- Market mechanics (1 hour)
- Risks (1 hour)
Total: 5 hours