The Korean Securities Depository said today that, as of April 6, partial returns of borrowed securities on loans would be allowed unless opposed by the lender.
Allowing the partial return of borrowings will enhance the efficiency of Korean securities lending operations and help investors who need to borrow such securities to satisfy trading strategies, it said.
Usage of “partial return mechanism” is subject to the lender’s agreement, the KSD said. Existing lenders who object to the partial return mechanism are required to inform the KSD of its objection before April 6.
New securities borrowing and lending participants on or after April 6 are required to notify the KSD in the lending application if they have a dissenting opinion on the partial return mechanism, it said.
Partial return is not applicable to Settlement Coverage Transactions.