Important Announcement Regarding Stock Lending Fees for Specific Securities
Tokyo, August 6, 2025 – Japan Securities Finance Co., Ltd. (JSF) has today announced a significant update concerning the application of lending fees for certain securities in stock lending transactions. Effective from August 6, 2025, JSF will be implementing a revised policy that allows for a maximum lending fee rate of 10 times the standard rate for specific stocks experiencing high demand.
This measure, detailed in their recent publication “Notification on the Application of a Maximum 10x Lending Fee Rate for Stock Lending Applications (August 6) – Measures by Specific Stocks,” is designed to address situations where the demand for borrowing particular securities significantly outstrips the available supply. Such imbalances can arise due to various market factors, including increased trading activity, corporate events, or specific investor strategies.
Understanding the Stock Lending Fee Structure
In the context of stock lending, a lending fee is charged by the lender to the borrower for the temporary use of securities. This fee is typically calculated as a percentage of the value of the lent securities. JSF, as a key facilitator of stock lending in the Japanese market, plays a crucial role in ensuring the smooth functioning of these transactions.
Purpose of the 10x Maximum Lending Fee
The introduction of a maximum lending fee of 10 times the standard rate serves as a critical mechanism to rebalance supply and demand in the stock lending market. When a particular stock becomes highly sought after for borrowing, and the available supply is limited, the demand can exert upward pressure on lending fees.
By setting a higher ceiling, JSF aims to:
- Incentivize Lenders: A higher potential lending fee can encourage existing holders of the securities to make them available for lending, thereby increasing the overall supply.
- Discourage Excessive Speculation: Conversely, a significantly higher fee can act as a deterrent for borrowers engaging in purely speculative or excessive borrowing, helping to moderate demand.
- Maintain Market Orderliness: This tiered fee structure is a widely recognized market practice designed to manage liquidity and prevent undue volatility in lending markets. It helps to ensure that borrowing costs are reflective of the actual scarcity of the securities.
Scope of Application
It is important to note that this revised policy is not a blanket change for all securities. JSF’s announcement specifically refers to “measures by specific stocks,” indicating that the 10x maximum lending fee will be applied selectively to individual securities that meet predefined criteria for high demand and limited supply. Investors and market participants are encouraged to refer to JSF’s official publications for the most up-to-date information on which specific stocks are subject to this revised fee structure.
Implications for Market Participants
For investors and financial institutions involved in stock lending, this announcement signifies the importance of staying informed about market conditions and the specific lending fee rates applicable to their desired securities. It underscores the dynamic nature of the lending market and the mechanisms in place to ensure its efficient operation.
JSF remains committed to fostering a robust and transparent market for securities lending in Japan. This adjustment to the lending fee policy is a proactive step to address market dynamics and support the continued smooth functioning of the securities lending system.
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（8/6） – 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（8/6） – 銘柄別制限措置’ at 2025-08-06 02:14. Please write a detailed article about this news in a polite tone with relevant information. Please reply in English with the article only.