Participants in the SGX Securities Borrowing and Lending (SBL) Programme, take note: From 2 Dec 2019, you will pay or receive fees that vary according to factors such as the supply and demand of the securities.

Currently, the borrower pays a fixed 6% per annum, which translates into the lender receiving 4% and Central Depository, 2%.

SGX said the 6% rate is generally higher than charged by other SBL providers -- and thus a deterrent for borrowers whose shares are kept at CDP. 

(Generally speaking, by the way, borrowers are shortists).

SGX said that with the upcoming switch to variable rate pricing, it expects a higher frequency of loans, which would increase the chances of lenders' securities being lent out. 

In a letter to SBL participants, SGX also said it is tweaking another aspect of the fee structure: Lenders will get a fixed 70% of the borrowing fee, which is higher than the current 66.67% (4% lending fee) of the borrowing fee.

In essence, it is a slightly higher percentage of a likely lower fee.

What will happen to your securities which are currently on loan?

Come 2 Dec 2019, existing loans switch over seamlessly to the new fee structure.

In other words, your income as a lender will be 70% of the prevailing borrowing rate that kicks in (and whatever borrowing rate that may fluctuate going forward).

By the way ...

• if you have not joined the SBL programme, the form is here. It's passive income for stocks that you generally consider longer-term holding and don't mind lending out to shortists or whoever.

• check out the current pool of shares available at CDP here. 

• check out our 2012 story (a bit old but the relevance is there): 

Share Prices

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AEM Holdings2.110-0.020
Avi-Tech Electronics0.410-0.005
Best World Int.1.360-
China Sunsine0.520-
CNMC GoldMine0.2750.005
CSE Global0.550-0.015
Eagle HTrust USD0.530-
Food Empire0.685-
Golden Energy0.180-
GSS Energy0.091-0.005
ISDN Holdings0.225-
JB Foods0.635-
KSH Holdings0.425-
Moya Asia0.076-0.002
Nordic Group0.310-0.005
Oxley Holdings0.370-
REX International0.181-0.007
Sing Holdings0.400-
Straco Corp.0.630-0.020
Sunningdale Tech1.3200.020
Sunpower Group0.595-0.015
The Trendlines0.111-0.004
Tiong Seng0.200-
Uni-Asia Group0.730-0.010
Yangzijiang Shipbldg1.080-0.010

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