株式の借入について

The Mechanics of a Short Sale

シナリオ: トレーダーAは、将来低い価格で買い戻すことを見越して株の空売りを行 います。

  1. 空売り株式の確保
    空売りする際に、トレーダーAは、空売り希望数量の株が借り入れ可能かどうか確認する必要があります。 ブローカーは「Box List」という利用可能な保有数量リストを持っており、そこには、自己保有分と他者による保有分の両方が記載されています。他者の中には、証拠金で取引をし、貸出に同意している顧客や、第3者ブローカーも含まれます。

  2. 空売り注文の執行
    利用可能な数量を確認し、トレーダーAは取引日(T)に空売り注文を執行します。 ほとんどの株式市場では、3 日後に取引の決済が行われます。つまり、取引日の3 日後(T+3)に株券と現金の交換が行われます。

  3. 株式の借入れと、空売り取引の決済
    3 日後(T+3)の朝に、トレーダーAが使用するブローカーの有価証券貸出部署において、同日付で株券の実際の受け渡しが決定されます。社内の「Box List」を調べ、空売り決済の為に該当の株式が使用されます。 空売りの処理の中で、自社の「Box List」内に貸出可能な数量が無い場合には、他のブローカーの「Box List」を調べ株券を調達します。

    株によっては取引日(T)の時点で貸出可能なリストに入っているにも関わらず、T+3 の時点で貸出不能になることがあります。この場合には、該当の空売り取引は「不出来」となり、ブローカーは、期限内の受け渡し義務を遂行することができなくなります。この場合には、トレーダーAの口座に対し、ブローカーによるポジションの買戻し(Buy-in)が強制的に行われ、空売りポジションが削減、または清算されます。

  4. 空売りによる現金収入は借入株の担保として拘束
    取引の決済が完了し、株式の空売りによって入ったきた現金は、トレーダーAの株の借入れに対する担保として扱われます。トレーダーAのブローカーはその担保金を投資することができます。

  5. 売り手に対する、売り手からの金利の支払い(該当する場合)
    投資された担保から発生した金利の一部は、管理費用や借入れ費用に充当されます。管理費用が高額になる場合が多く、残りの金利は残高が大きい空売りの売り手にだけ支払われるのが一般的です。借入が厳しい状況では、(支払われた金利より)借入料のほうが高く、空売りをするために追加で金利を支払うことになります。アカウントマネジメントのツールの中にあるShort Stock (SLB) Availabilityツールより、特定の株式の指標借入金利を確認することができます。

  6. 空売り手によって支払われる配当金相当額(Payments in Lieu of Dividends)
    空売りをしている銘柄に対して配当金の支払いが発生した場合、買い手は、配当金の支払いを受けます。同様にまた、貸し手も株式を売却したのではなく、貸出ししているだけであるため、配当金を受け取る権利を有します。トレーダーAは配当金相当額(Payments in Lieu of Dividends)という形で借り手に支払う責任があります。

将来のある時点で、トレーダーAがポジションの買い戻しをした時、又は、貸し手による買い戻しがあった場合には、その分だけ借入分が削減されますが、前者の場合には、取引が終了し、後者の場合、ブローカーが他の貸し手を検索し、新たなブローカーやトレーダーにその貸付分が移行され、トレーダーAの空売りポジションはそのまま保持されます。貸し手を見つけることが出来なかった場合には、ブローカーはトレーダーAに対して借入がリコールされ、即座にポジションをクローズしなければならない旨を告知します。大半は、単純にブローカーがリコールされた株式の強制買付、買い戻しを行います。


http://www.interactivebrokers.com/en/p.php?f=shortableStocks&p=overview

IB Short Stock Buy-In Procedures

SEC regulations implemented in September 2008 require that short sellers comply with their delivery obligations on the standard settlement date, generally three business days after the trade date. The regulations additionally require a repurchase of securities that are not delivered ("fail") by the next trading session for the securities. This contrasts with previous practice wherein a trade could "fail" for several days after the target settlement date, permitting brokers more time to make delivery by finding lenders for the stock(s).

As a result of the more stringent regulatory enforcement of the delivery rules, lenders have generally become more conservative in their lending activities leading to a decline in the general availability of inventory in many less widely held stocks. This creates an additional effect on the securities borrow/loan market by causing dealers to more readily recall existing loans rather than establishing new borrows to manage their inventory needs. For a fuller discussion of short sale and stock borrow and lend ("SLB") mechanics, please click here.

IB's implementation of the SEC regulations is as follows:

  1. On the standard settlement date, at approximately 14:30 EST, IB will make an estimate of the transactions that have actually settled, including any borrow transactions required. Historically, stock borrowing activity is completed early in the morning of settlement day. With the 9/2008 rules, we observe settlement activity continuing right up to the DTC cutoff at 15:10 EST. Accordingly, our 14:30 estimation is a compromise which, while it does not include the last 40 minutes of settlement activity (typically less than 10% of the total activity), it does provide a longer time period to provide notification and to allow clients to make trading decisions before the end of the trading session at 16:00.
  2. IB will disseminate an indication of possible buy-ins at about 14:50. Clients should recognize that these notifications communicate only the possibility, not the certainty, that we will be unable to make timely delivery thereby necessitating a buy-in. The purpose of the communication is to allow clients an opportunity to repurchase the short securities themselves thereby retaining greater control over their portfolios.
  3. At about 17:00, IB will reconcile any late settlements as well as client transactions up to the end of the regular trading session at 16:00 EST. IB will consider the net of all trades on the day when determining the position, including any new short sales. Trades after 16:00 will not be included in our position reconciliation. IB will then calculate the expected buy-in requirement based on complete information. IB applies, on a best efforts basis, last in, first out (LIFO) logic when determining buy-in allocations.
  4. On the morning of the next business day (generally the fourth day after trade date, also called "T+4"), and prior to the start of trading, IB will make a final attempt to locate and borrow the required securities. In the event we are able to do so, IB will send a notification reporting on an late borrow activity. The notification will confirm positions to be bought in.
  5. IB will attempt to post the bookings prior to the start of trading at 09:30. Occasionally, it may take longer to correct the positions visible via the TWS but the adjustments will be visible in the trades window so it should be evident to clients for whom this real-time information is important.
  6. On T+4, IB will execute transactions in the open market to effect the actual buy-in, as required by the SEC rules. In case the buy-in transactions occur at multiple prices, we will calculate the volume weighted average price for the buy-ins.
  7. On the statement of the 4th day, IB will book the buy-in trades with the code B.

In order to ensure compliance with SEC regulations, for Execution-Only accounts where receipt on a long sale is pending, IB will proceed with a buyin transaction under the above guidelines in the event the settlement is not received by 09:15 New York time.

The above procedure refers to transactions that fail to settle directly resulting from a short sale. A nearly identical procedure will be applied for existing stock borrows that are recalled by lenders. Recalls can occur at any time so in many cases little, and sometimes no, adequate notification can be distributed to clients. For recalls made in the morning, IB will be able to provide notification as described above. For late recalls after 13:00, IB will attempt to provide notification on a best efforts basis.


http://www.interactivebrokers.com/en/p.php?f=shortableStocks&p=overview1

例外的な空売り(ショートセール)規制情報


金融サービス会社に対する空売り制限(SEC 緊急発令34-58592)

SEC による緊急発令34-58592 は2008 年10 月9 日に期限切れとなりました。

特定の英国金融サービス会社に対する空売り制限(FSA/PN/102/2008)

英国金融監督当局(FSA)は、英国で上場されている金融サービス会社おおよそ40社 に対する空売りの禁止を発令しました。この禁止令は複合的なもので、空売りに相当 する効果のある取引戦略を含み、プットオプションの買い、コールオプションの 売り等 のデリバティブ取引も対象とされます。この法令は2009 年1 月まで有効なもの として、 FSA の監督下にありました。英国の空売りに関する法令の詳細は以下英国FSA のウ ェブサイトでご確認いただけます。:
http://www.fsa.gov.uk/Pages/Library/Communication/PR/2008/index.shtml



その他の空売り規制

多くの国では空売りに対して特別な規制を設けています。IB では、これらの法 令を順 守し、既存のシステムを見直し適応させてきました。法令で定義されている有価証券 の貸出方法に対して、現在IB でサポートしきれていないものに関しては、空売 り自体 に制限を設けて対応しています。

前借り(Pre-Borrow)に対する制限 (取引の前に借り入れが出来たものに対してのみ 許可される空売り): IB では、前借り(Pre-Borrow)のサービスをサポートしてお りません。(1). 事実上、オーストラリア株、日本株、香港株が制限されています。

特定の株式に対する制限: 英国、ドイツ、フランス、オランダ、スイス、ベル ギー、ス ウェーデン、カナダ、ノルウェー、イタリア



米国有価証券の特別引渡しとBuy-in(買い戻し)に関す る法令(SEC 緊急発令34-58572)

SEC 緊急発令34-58572 は2008 年10 月17 日に失効となりました。



アメリカ証券取引委員会 (SEC) によるNo. 34-58773 発 令

レギュレーションSHO の改正

暫定措置:最終暫定ルール及び意見募集

概要:アメリカ証券取引委員会 (SEC) では、有価証券市場1934 決議(市場議決)のも と、暫定措置として最終暫定ルールを承認し、有価証券株式の不正な「裸売り」に対 応すべく、参加者のクリアリング業者は委員会(SEC) への登録を求め、決済日に必 ず有価証券の引き渡しをする要求を行いました。万が一、参加者が決済日までに株 式の引き渡しが出来なかった場合、その参加者は、ポジションの引き渡しに失敗 (Fail) した日から起算して翌日の決済日の通常取引時間開始時刻までに、速やかに買い 戻し又借り入れを完了させポジションの解消を行うことを求められます。 この 暫定ル ールによるClose-out(ポジションの解消)の要求に応じることができない場合、 違反行 為とみなされます。更に、このClose-out(ポジションの解消)の要求に応じない 参加者 と、その参加者がクリアリング、決済のために取引するブローカー・ディーラー は、該 当の引き渡しに失敗したポジションが解消され、必ず取引前に該当の有価証券の借 り入れの準備又は実際の借り入れが完了しない限り、自身の口座又は他の口座にお いて該当有価証券の新規空売りが出来ません。

施行日:2008 年10 月17 日、§242.204T(2008 年10 月17 日より2009 年7 月31 日 まで有効)を除く。

注意点:
  • 1このサービスについては2009 年の第四四半期より提供予定です。

http://www.interactivebrokers.com/en/p.php?f=shortableStocks&p=overview2

Regulation SHO


The "Alternative Uptick Rule"

The Securities and Exchange Commission (SEC) has adopted amendments to Regulation SHO with a compliance date of February 28, 2011. Among the rule changes, the SEC is introducing Rule 201 (also known as the "Alternative Uptick Rule"). The predecessor of the alternative uptick rule was Rule 10a-1 under the Securities Exchange Act of 1934, as amended, commonly known as the "Uptick Rule". Rule 10a-1 was repealed by the SEC in July 2007 after years of empirical study of the impact of short-selling on the markets and the implementation of a pilot program to test the effects of rescinding Rule 10a-1.

After eliminating the Uptick Rule, and in response to the extreme market volatility that occurred during the 2007-2008 financial crises, the SEC took a number of emergency actions targeting short selling activity. These actions included temporary bans on short sales of certain financial stocks and rules regarding delivery of shares and other measures designed to prevent "naked" short selling. In response to these events, the SEC has implemented a circuit breaker rule that, when triggered by a significant price decline in a particular security, would trigger a temporary short sale price test for that security.



Covered Securities

Rule 201 applies to any security or class of securities, except options, for which transaction reports are collected, processed and made available pursuant to an effective transaction reporting plan. As a result, Rule 201 generally will cover all securities, except options, listed on a national securities exchange (whether traded on an exchange or in the OTC market). Rule 201 will not apply to non-NMS stocks quoted on the OTC Bulletin Board or elsewhere on the OTC market. However, the SEC noted that it may reconsider whether to apply Rule 201 to these securities at a later date.



Requirements

Under the new Rule, a "circuit breaker" will be triggered for a covered security that declines 10% or more from the covered security's closing price as of the end of regular trading hours on the prior day, as determined by the listing market. In order to ensure compliance with the new rule, trading centers, including national securities exchanges and alternative trading systems, will be required to establish and enforce procedures designed to prevent the execution or display of a prohibited short sale.

Specifically, the Rule requires that a trading center establish, maintain, and enforce written policies and procedures reasonably designed to prevent the execution or display of a short sale order of a covered security at a price that is less than or equal to the current national best bid if the price of that covered security decreases by 10% or more from the covered security's closing price as determined by the listing market for the covered security as of the end of regular trading hours on the prior day.

Once the circuit breaker is triggered, for the remainder of the day that the circuit breaker is triggered and for the entire following day, no short sales may be displayed or executed for the security during the time that the consolidated tape is open if the order price is at or below the national best bid (subject to limited exemptions described below).

Although the Rule 201 circuit breaker can only be triggered during regular trading hours, once triggered, the short sale price test restrictions of Rule 201 apply at all times when quotation information and the national best bid are disseminated, even though this period may vary and may extend beyond regular trading hours. Rule 201 states that if the price of a covered security declines intra-day by at least 10% on a day on which the security is already subject to the short sale price test restriction of Rule 201, the restriction will be re-triggered and will continue in effect for the remainder of that day and the following day. Rule 201 does not place any limit on the frequency or number of times that the circuit breaker can be re-triggered with respect to a particular stock.

The SEC has also issued guidance for marking certain qualifying orders "short exempt" in order for market participants to utilize certain exemptions listed below. Rule 201 permits the execution and display of short sale orders that are marked "short exempt" without regard to whether these orders are priced at or below the current national best bid.



Exemptions from the Short Sale Price Test

IB may mark certain transactions as exempt from Rule 201. Orders marked short sale exempt will be accepted from US registered Broker-Dealers for the following reasons:

  • a short sale order submitted by a broker-dealer that was above the national best bid at the time of submission,
  • short sales where the seller may be deemed to "own" a security but who may be technically considered a short seller due to a delay in delivering the security,
  • certain odd-lot transactions,
  • certain domestic and foreign arbitrage transactions,
  • sales resulting from over-allotments and lay-off sales, riskless principal transactions and volume weighted average priced basis trades.


Role of Trading Center

Under the amended rules, a trading center (which is defined to include any entity that may execute short sale orders) is responsible for establishing, maintaining and enforcing written policies and procedures that are reasonably designed to prevent execution or display of a short sale order of a security that has triggered the circuit breaker and impose the short sale price test restriction for the required timeframe. Also, a trading center must assess its policies and procedures regularly and take any remedial actions promptly.



Implementation of the New Rule

Though the SEC considered whether to conduct a pilot study of the new rules on only certain securities, it opted not to do so. Compliance with Rule 201 is required as of November 10, 2010.



Important Notes

  1. If an exchange determines that the Short Sale Price Test for a covered security was triggered because of a clearly erroneous execution, the exchange may lift the Short Sale Price Test before the Short Sale Period ends or, for securities listed on another market, notify the other market of the exchange's determination that the triggering transaction was a clearly erroneous execution.
  2. If an exchange determines that the prior day's closing price for a listed security is incorrect in its system and resulted in an incorrect determination of the Trigger Price, the exchange may correct the prior day's closing price and lift the Short Sale Price Test before the Short Sale Period ends.
  3. Once the Securities Information Processor (SIP) indicates that a short sale circuit breaker is in effect for a certain security, short sale orders will only be accepted at permissible prices unless they are eligible for one of the exceptions listed above.
  4. Customers who use Interactive Brokers clearing services or any non-US registered broker-dealers may not submit short exempt orders. Short exempt orders entered by these categories of customers will be rejected.

For complete details, refer to the Amendments to Regulation SHO (SEC Release 34-61595). For additional information, please refer to the SEC's responses to frequently asked questions (see SEC Rule 201 FAQ).


http://www.interactivebrokers.com/en/p.php?f=shortableStocks&p=overview3

We make the stockslisted under the following links available for shorting:

Americas
Country Shortable Stocks

United States
Shortable: 9961Listed for Trading: 16084

Canada
Shortable: 620Listed for Trading: 4188

Mexico

Click Here for most recent updates, if available.

Click Here for most recent updates, if available.

Click Here for most recent updates, if available.

IB customers who only execute through IB, but do not use IB as their clearing broker or custody agent ("Non-Clearing Customer"), may click here for a list of valid Market Participant Identifier (MPID) codes to be entered with their short sale orders.

Note: Please note that we do not allow short-sale orders for less than 1 round lot (100 shares in US/Canada).


http://www.interactivebrokers.com/en/p.php?f=shortableStocks&p=shortable

We make the bondslisted under the following links available for shorting:

None available at this time
Americas
Country Shortable Bonds

United States
Shortable: 9052Listed for Trading: 126972

Canada

Mexico

Click Here for most recent updates, if available.

None available at this time
Europe
Country Shortable Bonds

Germany

United Kingdom

France

Netherlands

Switzerland

Belgium

Sweden

Spain

Austria

Italy

Click Here for most recent updates, if available.

None available at this time
Asia
Country Shortable Bonds

Australia

Japan

Hong Kong

India

Click Here for most recent updates, if available.

IB customers who only execute through IB, but do not use IB as their clearing broker or custody agent ("Non-Clearing Customer"), may click here for a list of valid Market Participant Identifier (MPID) codes to be entered with their short sale orders.

Note: Please note that we do not allow short-sale orders for less than 1 round lot (100 shares in US/Canada).


http://www.interactivebrokers.com/en/p.php?f=shortableStocks&p=shortable1

Borrow and Lend in the AQS Marketplace via TWS Stock Borrow/Loan


AQS Time Deadlines

  • Market is open: 6:45 - 15:00
  • Price minimum of 200k to borrow easy-to-borrow shares is in effect from 6:45 - 11:00.
  • Borrow orders must be greater than or equal to 100k.

Time deadlines for specific borrow/loan transactions are:

  • Borrow/Loan orders: 6:45 - 14:45
  • Borrow returns: 6:45 - 10:50
  • Borrow rerates: 6:45 - 10:50
  • Loan recalls: 6:45 - 14:45
  • Loan rerates: 6:45 - 10:50

 

Understanding the Stock Borrow/Loan Environment

The borrowing and lending of stock provides support for short selling, a transaction in which a trader sells shares he does not own and then borrows these shares from a lender to make delivery of the shares to the buyer. The short seller hopes that the share price will decrease in the future allowing them to buy the stock at a lower price, return the borrowed shares to the lender and keep the difference in profit. The stock borrow/loan environment comprises the following participants:

  • Stock Lenders, who own shares and are willing to lend them in exchange for cash collateral. The lender must own the stock to lend it, and depending on how in-demand the shares are, the lender may charge the borrower a fee for the privilege of borrowing.
  • Brokers, who serve as the middlemen between the stock lenders and the borrowers, and who manage the inventory of available shares for borrowing. Lendable shares come several sources, including the broker's customers, the broker's proprietary inventory, and other third party brokers.
  • Borrowers, a.k.a. Short Sellers, who sell shares that they do not own, and must then borrow the shares to deliver to the purchaser when the trade settles. The borrower is responsible for first locating the shares he plans to sell short. He puts up cash collateral in exchange for the borrowed shares, which is returned to the borrower when the shares are returned to the lender. In addition, the borrower may be required to pay a fee for a hard-to-borrow stock, and is responsible for any exchange fees, commissions, and dividend payments on the borrowed shares (if applicable).

A simple example of a short sale is as follows: After confirming the availability of the shares, a short seller would sell 1000 shares of XYZ at $10.00/ share, and collect $10,000.00 for the sale. Since he doesn't actually own these shares, the $10,000.00 goes to the lender or broker as collateral on the loan. Assume that a month later the price per share has dropped to $5.00. The short seller now purchases 1000 shares of XYZ for only $5000.00, returns the 1000 borrowed shares to the lender and takes back the $10,000 collateral, leaving him with a profit of $5000.00. This simple example does not account for any borrow fee, interest or dividends in lieu, but presents the basic process of the borrow and short sale relationship.

For an illustrated description of the short sale process, see The Mechanics of a Short Sale on the IB web site.

Compare Borrow Methods

Use TWS to borrow shares for a short sale in two different ways: the traditional "Box List" method, or using the new TWS Stock Borrow/Loan feature. While both methods require the trader to ensure that shares are available to borrow before putting on the short sale, in the traditional "Box List" method the actual borrowing of the shares is done completely by the broker, in time for settlement of the short sale and delivery of the shares to the buyer, generally three days after the trade date or "T+3."

Consider some of the pros and cons with regard to the traditional "Box List" method of borrowing:

  • Pro: There is less work for the customer as IB will manage the borrow portion of the transaction.
  • Con: Confirming that shares are available to borrow prior to initiating a short sale transaction is no guarantee that shares will be available to borrow three days later on settlement date. If IB is unable to borrow the shares for delivery to the buyer, the customer may be bought in. This means that shares of stock will be purchased at the prevailing price to deliver on settlement date, and the short seller will lose any potential profit of the short sale transaction.
  • Con: Customer has no control of the borrow rate.

Alternatively, using the TWS Stock Borrow/Loan tool allows a trader to view stock lending rates on AQS or another market and then instruct IB to pre-borrow shares in anticipation of the short sale delivery. Consider some of the pros and cons of using the Stock Borrow/Loan tool:

  • Con: The customer must take the time to manage both the short sale and borrow portions of the transaction.
  • Pro: Since the customer can pre-borrow stock ahead of the short sale there is less concern about having shares available for delivery on settlement date. Note however, that the lender of the shares can always "recall" the shares (end the loan) even after IB borrows them on your behalf (i.e., your short sale is still subject to a forced buy-in if the lender recalls the shares and other shares are not located for the short position).
  • Pro: The customer views rates and availability directly on AQS and is in control of the rate they pay to borrow the shares.

IB offers both ways to borrow shares for shorting. Regardless of the method, shares that are in demand and hard-to-borrow could carry a high borrow fee for the privilege of borrowing. Shares that are easy-to-borrow may have no borrow fee, and may even offer a rebate to make the transaction more appealing. The customer should compare the potential costs and profits of each method before choosing.


http://www.interactivebrokers.com/en/p.php?f=shortableStocks&p=borrowLoan

Borrow / Lend Scenarios

This section addresses some scenarios that may occur after a customer has borrowed or lent shares via AQS using the TWS Stock Borrow/Loan tool.



Subsequent Purchase of Shares to Cover a Short Sale

Scenario: Trader A uses AQS to borrow shares, and then sells the borrowed shares short. Trader A then purchases shares to cover the short position. What will happen to the borrowed shares? Will IB automatically return them?

Explanation: Although the borrow feature is designed to support a short sale, currently IB will not force a return of the shares even if you have covered (terminated) your short sale. In other words, you can "re-short" the same stock using the same borrowed shares if you wish.

Please note, however, that if you have borrowed shares that remain in your account for three days and that are not supporting a short sale during that time (a "non-purpose" borrow), IB may return the shares to the lender.



Return of Borrowed Shares with Short Position Still Open

Scenario: Trader A uses AQS to borrow shares, and then sells the borrowed shares short. Trader A then wants to return the borrowed shares while the short position is still open. Does IB allow the return?

Explanation: IB will allow Trader A to end the borrow that Trader A initiated, and IB will either "take over" that borrow to support the customer's short sale, or borrow shares from another party to support the short sale. From that point it is as if the customer initiated a short sale transaction without using the TWS Stock Borrow/Loan tool, and the transaction is handled and borrow rate is computed at the end of the day like any other IB-managed short position. Please note that the customer may be more susceptible to being "bought-in" on the short in this scenario.



Recall of Borrowed Shares by the Lender

Scenario: Trader A uses AQS to borrow shares and then sells the borrowed shares short. The borrowed shares are then recalled by the lender. What happens to the short sale?

Explanation: If he is logged in the customer will be notified of the recall in the Stock Borrow/Loan window and the borrow transaction will be closed. IB generally will attempt to locate replacement shares to borrow to support the short sale. The terms of the original borrow will no longer govern and the short sale will become an ordinary IB short sale. Customer is subject to being bought in if shares cannot be borrowed to support the short position.



Rerate Request from the Borrower

Scenario: Trader A uses AQS to borrow shares, and then sells the borrowed shares short. Trader A then decides to try for a better borrow rate by sending in a rerate request. What could happen?

Explanation: If accepted, the borrow is rerated. If the rerate request is rejected, the customer can choose to keep the borrow at the current rate or can return the shares if they are either able to borrow the shares or want IB to attempt to locate replacement shares



Rerate Request from the Lender

Scenario: Trader A uses AQS to borrow shares and then sells the borrowed shares short. Subsequently, the lender issues a rerate request.

Explanation: If the customer is logged into the TWS they will get notified of the rerate request. They can either Accept or Reject the request. If the customer accepts the rerate, he will be charged the new fee rate starting that day. If the customer rejects the rerate or does not respond within 25 minutes of the request, the borrow will automatically get returned. IB generally will attempt to locate replacement shares to borrow to support the short sale. The terms of the original borrow will no longer govern and the short sale will become an ordinary IB short sale. The customer is subject to being bought in if shares cannot be borrowed to support the short position.



Returns and Recalls

Scenario: A lender has shares returned by the borrower. Can the lender immediately (same day) look to re-loan those returned shares?

Explanation: The initial return is the borrower communicating their intent to return the shares; however, they may not actually return the shares in which case the share cannot be loaned again. The lender must wait until the shares settle back into IB's DTC account. If the shares settle late, they may not available to relend that same day.

Scenario: A lender issues a recall. Can the lender immediately (same day) look to re-loan the returned shares? Or do they have to wait a day?

Explanation: When a recall on lent shares is initiated, the underlying stock cannot be re-loaned until the shares settle back into IB's DTC account. Typically this occurs within the same day. However, the worst case scenario is a buy-in on the outstanding loan. This can be done no earlier than three business days after the recall, and settlement on the buy-in takes an additional three business days. If IB is failing to receive the bought-in shares from NSCC, re-loaning the shares could be further delayed.

Scenario: If a lender issues a recall, when do the terms of the deal stop and the loan get removed from the account?

Explanation: As mentioned above, typically this occurs within the same day. However, when a recall is initiated, the worst case scenario is a buy-in on the outstanding loan, and this situation may occur more frequently with hard-to-borrow shares than with easy-to-borrow shares. On the trade date of the buy-in, three days after the recall, the loan comes out of the account and the fees/deal is terminated. While the return is pending, the deal is still active.

Scenario: A lender issues a recall but the borrower fails to return the shares. What happens next?

Explanation: IB will initiate a buy-in (three days after the recall) and the loan is terminated. If the shares bought in are delivered to IB (i.e. three days after the buy-in), the shares are usually available to lend again. This can be delayed if IB is failing to receive the shares from NSCC. Regardless of whether or not a buy-in settles, the terms of any deal are terminated on the day of the buy-in.


http://www.interactivebrokers.com/en/p.php?f=shortableStocks&p=borrowLoan1

Stock Yield Enhancement Program

Our Stock Yield Enhancement Program allows you to lend your fully-paid stock shares to Interactive Brokers in exchange for cash collateral; IB will lend the borrowed shares to traders who want to sell them short and are willing to pay a fee to borrow them. Each day that your stock is on loan, you will be paid a loan fee based on market rates. You share a percentage of this with IB (currently 50%) as a fee for managing the program. Stocks that are eligible to be loaned out are all "fully-paid" stocks (stocks not held on margin) and "excess-margin" stocks (stocks held on margin but whose market value exceeds 140% of your margin debit balance).

The Stock Yield Enhancement Program is available to eligible IB customers1 who have been approved for a margin account, or who have a cash account with equity greater than 50,000 USD.

To sign up for IB's Stock Yield Enhancement Program, log into Account Management and check Stock Yield Enhancement Program on the Trading Configuration page, available from the Trading Access menu.

You can see how much you might earn in our Stock Yield Enhancement Program by running the IB Stock Yield Calculator. Access the Calculator in Account Management by clicking IB Stock Yield Enhancement Program under New Features on the Account Management Home page, then clicking the Calculate Potential Extra Yield button on the Stock Yield page.

For more information about our Stock Yield Enhancement Program, see our Highlights page.

For a complete discussion of the risks and characteristics of the program, click here.

 

Note:
[1] Not all customers are eligible to participate. Currently customers of IB Canada, IB India and IB Japan are NOT eligible. Customers of IBLLC and IB UK are eligible, as are Japanese and Indian customers who trade with IBLLC.


http://www.interactivebrokers.com/en/p.php?f=shortableStocks&p=stockYield

Frequently Asked Questions


IB will lend your fully-paid, US stocks only.

Rates are only published by the industry after the stock loan is made. There is no transparent market for rates and the estimate is based on the yesterday's rates in total.

None. Your ability to borrow is still based on your stock position.

Yes it shows up as Collateral Amount in these three new sections of your account statement: IB Managed Securities Lent, IB Managed Securities Lent Activity and IB Managed Securities Lent Fee Details.

Yes, they are marked to market nightly.

Yes, IB will automatically terminate the loan when the stock is sold, typically on T+1. You don't have to do anything differently.

You can sell the entire amount if you want. There is no difference in how you trade based on whether or not the shares are lent.

If the stock is fully paid, it will benefit you the same whether or not it has call options written against it.

The same US Tax withholding rates for non –resident aliens applies for both dividends and payments in lieu. In general the rate is 30%, however a lower rate may be applicable if there is a tax treaty between your resident country and the US.

No, the Stock Yield Enhancement Program is not available to our IRA account customers.

No, the Stock Yield Enhancement Program is not available to Canadian customers.


http://www.interactivebrokers.com/en/p.php?f=shortableStocks&p=stockYield1

Pre-Borrow Program

Our Pre-Borrow Program for US Stocks is now available to Portfolio Margin customers. Once you have registered, this program lets you pre-borrow stocks in anticipation of a short sale using the Stock Borrow/Loan page in TWS. Pre-borrowing can help to avoid a buy-in by ensuring that shares are available to short before you put on the short sale. Without a pre-borrow, you will not know for certain if shares have been procured until the short sale settles on T+3.

The Pre-Borrow Program offers these benefits:

  • Decreases buy-in risk for customers who want to short.
  • Lock in a locate that only your account can use to sell short.
  • Provides access to all of IB's stock loan relationships.
  • IB's Stock Loan Desk manages the borrow for you.
Pre-Borrow Program

Keep the following guidelines in mind when participating in our Pre-Borrow Program:

  • The program is available for Portfolio Margin accounts only.
  • Sign up for the program on the Trading Permissions page in Account Management.
  • You will pay additional borrow fees for any pre-borrowed shares held in excess.
  • The Pre-Borrow Program assumes that shares are borrowed first and the short sale is executed second. If this doesn't happen AND you are already short that underlying, the pre-borrow will be applied to the existing short on the following day.
  • The rate on the trade displayed in Trader Workstation is the indicative rate only. You will be charged the standard borrow rate, which is computed at the end of the day and will be displayed on your Activity Statement.
  • If no short trade is put on by the fourth day after the pre-borrow, it becomes a non-purpose borrow and the shares are returned.
  • Once you pre-borrow, shares available for shorting are displayed in the Private Locate field in the TWS Stock Borrow/Loan window.

For help creating pre-borrow orders in TWS, see the TWS Users' Guide.


http://www.interactivebrokers.com/en/p.php?f=shortableStocks&p=preBorrow