Japan Securities Finance Co., Ltd. Lifts Temporary Measure on Maximum Lending Fee for Short Selling, Effective August 14th
Tokyo, Japan – August 14, 2025 – Japan Securities Finance Co., Ltd. (JSF) has announced the discontinuation of a temporary measure that had capped the maximum lending fee rate for stocks in its lending transactions. This lifting of the restriction, effective from August 14th, marks a significant adjustment in the framework governing the lending of securities for short selling activities.
The temporary measure, which had been in place to address specific market conditions, had set a ceiling on the “hinagashi-ryo,” or lending fee, charged for borrowing securities when a shortage, or “hinagashi,” arose in the lending market. The lifting of this cap signifies JSF’s assessment that the market conditions necessitating this intervention are no longer present or have sufficiently stabilized.
This development is of particular interest to market participants engaged in short selling, as the lending fee directly impacts the cost of executing short sale strategies. By removing the maximum rate, JSF allows the lending fees to be determined more dynamically by the prevailing supply and demand for the specific securities in the lending market.
Key Implications of the Measure’s Removal:
- Increased Flexibility for Lenders: Securities lenders, including institutional investors and brokerage firms, will likely experience greater flexibility in setting lending fees. In situations where demand for borrowing a particular stock significantly outstrips its availability, lenders may be able to command higher fees.
- Potential for Higher Borrowing Costs: Conversely, investors undertaking short sales may see an increase in their borrowing costs for certain securities, especially those that are in high demand for shorting or have limited availability in the lending market. This could influence the profitability of short selling strategies.
- Market-Driven Pricing: The removal of the cap re-establishes a more direct market-driven pricing mechanism for securities lending. This can provide a clearer signal to the market about the scarcity of specific stocks available for lending.
- Impact on Specific Stocks: It is important to note that the impact of this change will likely vary on a stock-by-stock basis. Stocks with consistently high demand for short selling or limited lending availability are more likely to experience fluctuations in lending fees.
Japan Securities Finance Co., Ltd. plays a crucial role in the smooth functioning of the Japanese securities market by facilitating lending and borrowing of securities. The company’s decision to lift this temporary measure reflects its ongoing commitment to adapting its operational framework to evolving market dynamics and ensuring efficient capital allocation within the financial system.
Market participants are advised to monitor lending fee rates for the specific securities they intend to borrow or lend, as the removal of the maximum rate may lead to more dynamic pricing adjustments.
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（8/14） – 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（8/14） – 銘柄別制限措置’ at 2025-08-14 07:18. Please write a detailed article about this news in a polite tone with relevant information. Please reply in English with the article only.