As an investor
Investors who are holding certain stocks in their demat account and are not looking to sell them in near future can take an advantage of SLB segment and lend the stocks for a certain fee and a stipulated duration.
As a trader
Traders who are looking for short term opportunities can borrow the shares and possibly gain from the price movement in the stock.
SLB BENEFITS
No Counter Party Risk
Clearing corporations and hence do not carry any counter party risk.
Contract Duration
Contracts are available with a duration starting from one month to twelve months.
No STT & SEBI Fees
STT and SEBI turnover fees are not applicable.
BENEFITS FOR LENDERS
Earn More
They receive a certain fee to lend the stock, depending upon the demand and time value.
No Minimum Quantity
There is no limitation of minimum quantity that a lender could lend.
Entitled To Corporate Actions
Lenders are entitled for all the corporate action like dividend, bonus etc.,
No Additional Capital Gain Tax
Transactions done in the SLB segment will not be treated as transfer, hence no additional capital gain tax.