Easy to borrow

Easy to borrow

In Securities lending, securities are classified by their "hardness" - quality that determines how difficult it is to borrow a security. Highly liquid securities are considered easy, these products are easily found on the market should someone decide to borrow them for the purpose of selling short. Securities that are illiquid on the market are classified as "hard". Due to various regulations, a short sale transaction must be preceded by locating the security and quantity that one would like to be able to sell short in order to avoid naked shorting. However, lending broker can create a list of security that do no require a locate. This list is referred to as Easy-to-Borrow (abbreviated as ETB), also know as blanket assurances. Such a list is generated by broker-dealers on the grounds of "reasonable assurance"cite web|url=http://sec.gov/rules/final/34-50103.htm#V|title=Final Rule: Short Sales; Release No. 34-50103; July 28, 2004] that the securities on this list are readily available upon customers requests. However, if a security on the list can not be delivered as promised (failure to deliver), the assumption of the reasonable grounds no longer applies. In order to provide better grounds for ETB list must be at most 24 hours old.

References

External links

*cite web|url=http://www.sec.gov/divisions/marketreg/mrfaqregsho1204.htm|title=Responses to Frequently Asked Questions Concerning Regulation SHO|publisher=Securities and Exchange Commission - Division of Market Regulation


Wikimedia Foundation. 2010.

Игры ⚽ Нужно сделать НИР?

Look at other dictionaries:

  • Easy-To-Borrow List — A list of securities deemed to be available for borrowing in short selling transactions because their delivery is assured. Availability is usually due to their accessible nature and/or high number of outstanding shares. Also known as a blanket or …   Investment dictionary

  • easy money — See: tight money * * * easy money easy money ➔ money * * * easy money UK US noun [U] ► FINANCE money that is cheap and easy to borrow: »The business pages were calling it the end of the era of easy money . ► money that is easy to ear …   Financial and business terms

  • easy monetary policy — UK US noun [C] FINANCE, ECONOMICS ► a policy by a country s central bank of reducing interest rates to make money cheaper to borrow: »The central bank has employed an easy monetary policy to help nurse the economy back to health …   Financial and business terms

  • all too easy — all too easy/few/often/etc phrase used for emphasizing that something is too easy that there are too few that something happens too often etc It’s all too easy to borrow money that you can’t pay back. Thesaurus: very and very much …   Useful english dictionary

  • Naked short selling — Schematic representation of naked short selling in two steps. The short seller sells shares without owning them. He then purchases and delivers the shares for a different market price. If the short seller cannot afford the shares in the second… …   Wikipedia

  • Locate (finance) — In finance, a locate refers to an approval from a broker that needs to be obtained prior to effecting a short sale in any equity security, i.e. to locate securities available for borrowing. This activity was introduced by Regulation SHO rule… …   Wikipedia

  • Vente à découvert — La vente à découvert consiste à vendre à terme un titre que l on ne détient pas le jour où cette vente est négociée mais qu on se met en mesure de détenir le jour où sa livraison est prévue. Si la valeur du titre baisse après la vente à découvert …   Wikipédia en Français

  • all — [ ɔl ] function word, quantifier *** All can be used in the following ways: as a determiner (followed by an uncountable or plural noun): They had given up all hope. All children deserve encouragement. as a predeterminer (followed by a word such… …   Usage of the words and phrases in modern English

  • all */*/*/ — UK [ɔːl] / US [ɔl] adverb, determiner, preposition, pronoun Summary: All can be used in the following ways: as a determiner (followed by an uncountable or plural noun): They had given up all hope. ♦ All children deserve encouragement. as a… …   English dictionary

  • all too few — all too easy/few/often/etc phrase used for emphasizing that something is too easy that there are too few that something happens too often etc It’s all too easy to borrow money that you can’t pay back. Thesaurus: very and very much …   Useful english dictionary

Share the article and excerpts

Direct link
… Do a right-click on the link above
and select “Copy Link”