THE STOCK LOAN PROCESS
Client provides ticker symbol, stock exchange, desired loan amount and number of shares to be pledged.
We obtain verbal quotes from several lenders and submit the quotes to borrower. Borrower picks the best quote and requests a written Term Sheet (offer for the loan).
Prior to lender issuing a written Term Sheet outlining terms of the loan, borrower must execute a “Stock Loan Fee Agreement” and submit a copy of brokerage statement verifying securities owned.
Lender issues a written Term Sheet which borrower may execute or negotiate it’s terms. Upon execution of Term Sheet, lender sends out the Loan Agreement to borrower or his attorney. A custodian bank/transfer agent is selected which will hold the shares. Loan Agreement is negotiated and then signed with lender.
Upon execution of Loan Agreement, the lender and borrower make arrangements to place borrowers securities in mutually agreed local custodian bank/transfer agent of borrowers residency, the country where the security is traded or in any country borrower chooses.
A 3-way agreement is signed by borrower, lender and custodian bank and a “Closing Statement" is prepared. Client deposits the stock with custodian bank/transfer agent and lender wires the funds to custodian bank or any bank in any country that borrower chooses.
Process complete. Borrower is in possession of funds and may transfer elsewhere or withdraw. The lender does not control use of funds or the country that borrower chooses to receive funds in.