Earn extra returns from your shares! What is the Securities Borrowing and Lending (SBL) account for?

As the name implies:

• for borrowing of shares for those who wish to sell shares without owning them first

• for lending out of your shares that you own to earn that extra returns

This is for cash related trades and not CFD which enables ease of short selling trading.

If you intend to hold a short position for more than a trading day (in the Singapore market), you will need to borrow the shares via the SBL (Securities Borrowing & Lending) account.

The SBL facility is a separate account which you may have opened as part of the account opening process (see red circle in image below).

If you do not have this facility, simply login to your POEMS ac, under Acct Mgt, SBL tab, to opt in this service.

1. How do I initiate the use of the SBL facility and what are the mechanics behind it?

Sell as per normal trade and select the SHORT button.

Some of the risks of doing intra-day shorting:

1. counter is halted from trading and you are unable to buy back to close the position

2. your account does not have sufficient buy limit to buy them back.

• Best practice is to find out first if we have the shares to lend before you begin the shorting and also to check on your trading account sell limit.

• Tips: trade only the liquid counters and those that have large market cap since it be easier to borrow their shares. Avoid illiquid counters and those of small market cap.

- If you had accidentally oversold your position and only realized after the SG market closed, contact your Trading Representative who is in charged of your ac and he/she will talk you through the procedures.

2. What are the costs for using the SBL facility?

Refer to image below for an overview of the different costs. You may click on the SBL link (https://www.poems.com.sg/sbl/) for the full fee schedule.

Our Poems trading account has a SBL P&L calculator which will help you break down the costs of your contract when using the SBL facility. Refer to the image below on where to find it:

Do note that the commission charged in the SBL account is the normal standard rate at 0.28% min S$25 whichever is higher. It will not be applied to your preferred rate eg. if you are trading using other ac such as Cash Plus.

3. When do I top up my SBL account for borrowing the shares?

- If you close the short position on T+1 (where T is the transaction day of the short), we will let you know on T+2 the amount you need to top up (if any).

- If you intend to hold the short position, you will need to top up at least 30% of the short contract value on T+2. We will inform you of the amount to top up on T+2 morning

Full details on what the SBL is about and how it works can be found in the link below (https://www.poems.com.sg/sbl/).