Do you know that we can borrow and lend securities of companies? Yes! SLB (Stock Lending and Borrowing) Mechanism is the temporary lending of securities by a lender to a borrower of securities for a set period of time and for a set charge.

Today, let us discuss this Stock Lending and Borrowing Mechanism and how it works.

The SLB mechanism is widely popular around the world because it offers liquidity in the equity market, which improves market efficiency.

Securities lending and borrowing are an OTC (over the counter) commodity in most jurisdictions, where custodians allow borrowing and lending transactions between institutions. SLB, on the other hand, is an exchange-traded product in India.