Enhanced Measures for Securities Lending: Japan Securities Finance Introduces 10x Maximum Fee for Shortage Applications
Tokyo, Japan – September 1, 2025 – Japan Securities Finance Co., Ltd. (JSF) has announced a significant enhancement to its securities lending operations, implementing a new measure to address potential stock shortages. Effective September 1, 2025, JSF will apply a maximum lending fee rate of 10 times the standard rate for applications where a scarcity of lendable securities is identified. This initiative, detailed in their recent publication “Application for Securities Lending Fee at Maximum Rate of 10x (9/1) – Stock-Specific Restriction Measures,” aims to ensure the smooth functioning of the market and discourage speculative hoarding of securities.
Securities lending is a vital component of a healthy and liquid financial market, enabling various investment strategies, including short selling and hedging. However, in situations where a particular stock becomes highly sought after for lending, a shortage can arise, potentially impacting market participants’ ability to execute trades.
JSF’s introduction of the 10x maximum lending fee is a proactive measure designed to incentivize the availability of securities for lending and to discourage practices that could artificially create or exacerbate shortages. By setting a higher potential cost for borrowing in such circumstances, JSF aims to:
- Promote the availability of lendable securities: A higher fee structure for scarce securities can encourage existing holders to make them available for lending, thereby increasing the overall supply in the market.
- Deter speculative hoarding: The increased cost associated with borrowing in shortage situations may discourage market participants from accumulating large quantities of securities solely for lending purposes without genuine investment intent.
- Maintain market stability and liquidity: By mitigating the risk of severe shortages, this measure contributes to the overall stability and liquidity of the Japanese equity market, ensuring that market participants can continue to access securities as needed.
The document specifies that this 10x maximum rate will be applied on a stock-by-stock basis, allowing JSF to respond dynamically to specific market conditions and the lending demand for individual securities. This targeted approach ensures that the measure is applied judiciously and effectively where it is most needed.
This regulatory adjustment underscores JSF’s commitment to fostering a robust and efficient securities market in Japan. By implementing these enhanced measures, JSF seeks to provide greater certainty and predictability for all market participants involved in securities lending transactions. Investors and market professionals are encouraged to review the details of this announcement to understand its potential implications for their trading and lending activities.
貸借取引品貸し申込みにおける品貸料の最高料率10倍適用について（9/1） – 銘柄別制限措置
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日本証券金融 published ‘貸借取引品貸し申込みにおける品貸料の最高料率10倍適用について（9/1） – 銘柄別制限措置’ at 2025-09-01 07:29. Please write a detailed article about this news in a polite tone with relevant information. Please reply in English with the article only.