Temporary Measure on Maximum Lending Fees for Stock Borrowing Lifted
Tokyo, Japan – July 24, 2025 – Japan Securities Finance Co., Ltd. (JSF) announced today the lifting of a temporary measure that had capped the maximum lending fee (known as “shinagashi-ryo” or “stock borrowing fee”) for stocks subject to lending restrictions. This decision, effective from July 24, 2025, marks a significant adjustment in the market for securities lending and is expected to influence the availability and cost of borrowing specific stocks.
The temporary measure, implemented to address situations of acute stock shortages and excessive borrowing demand, had set a ceiling on the lending fees that could be charged. This was designed to prevent exorbitant fees from destabilizing market operations and to ensure a more orderly process for lenders and borrowers alike.
The lifting of this restriction signifies that the circumstances necessitating the temporary cap have now eased. This suggests that the market for the affected stocks has stabilized, and the pressure on borrowing demand has subsided to a level where the previous limitations are no longer deemed necessary.
Implications of the Fee Adjustment:
The removal of the maximum rate for stock borrowing fees could have several implications for market participants:
- Potential for Higher Borrowing Costs: For stocks that may still experience relatively strong borrowing demand or limited supply, the removal of the cap could lead to an increase in the fees charged by lenders. This could make short-selling activities or other strategies requiring stock borrowing more expensive.
- Increased Lender Incentives: Conversely, lenders who hold stocks that were previously subject to the fee cap may now be able to command higher returns on their lent securities. This could incentivize more institutions to make their shares available for lending, potentially improving overall market liquidity for those specific names.
- Market Dynamics and Price Discovery: The adjustment in lending fees can contribute to more dynamic price discovery in the stock market. Higher borrowing costs can act as a signal of scarcity or strong demand, which may influence trading decisions and the overall valuation of affected securities.
- Focus on Specific Securities: The announcement specifically refers to “銘柄別制限措置” (meigara-betsu seigen sochi), which translates to “stock-specific restriction measures.” This indicates that the lifting of the cap applies to particular securities that were previously identified as facing lending constraints, rather than a blanket removal across all stocks. Market participants will need to pay close attention to which specific stocks are affected by this change.
Japan Securities Finance Co., Ltd. plays a crucial role in facilitating securities lending and other financial market operations in Japan. Their decisions regarding lending conditions are closely watched by investors, traders, and financial institutions.
This announcement represents an important development in the operational framework of the Japanese securities market. Market participants are advised to monitor the evolving landscape of stock borrowing fees and their potential impact on trading strategies and investment decisions.
貸借取引の品貸し申込みにおける品貸料の最高料率に係る臨時措置の解除について（7/24） – 銘柄別制限措置
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日本証券金融 published ‘貸借取引の品貸し申込みにおける品貸料の最高料率に係る臨時措置の解除について（7/24） – 銘柄別制限措置’ at 2025-07-24 07:28. Please write a detailed article about this news in a polite tone with relevant information. Please reply in English with the article only.