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In Part Two of this series, we documented how fees, dividends and defaults  relate to securities lending by prime brokers. In this installment, we’ll discuss how counterparties transfer securities between borrower and lender.

Transfers are either physical, by way of a clearing organization, or by other means agreed upon between the counterparties.  Physical transfers must be delivered along with duly executed stock or bond transfer powers with guaranteed signatures by a bank or member firm of the New York Stock Exchange.

Continue reading “Securities Lending, Part Three” »