Glossary

A B C D E F G H I L M N O P R S T V

SECURITIES FINANCE: The exchanging of Securities for other Collateral (e.g. Cash, Equities, Government Bonds or Convertible Bonds) via Securities Lending (see below) Repos (see below), Swaps or any other method as agreed between the counterparts to the transaction. This term is now in general use to describe all the businesses mentioned below.
SECURITIES LENDING: A contract which commits two counterparts to exchange agreed securities against collateral and to subsequently reverse the exchange at an agreed future date or on demand. The counterpart borrowing the securities pays a fee to the other counterpart.
SECURITIES-ORIENTED REPO TRADE: A transaction motivated by the need of one counterpart to borrow securities and of the other to lend them.
SELL/BUY BACK: A buy/sell back from the point of view of the counterpart who takes cash and supplies collateral. See buy/sell back.
SET OFF: The legal right to net opposite obligations (to deliver securities or pay cash) between two counterparts in the event of default by one of them.
SHARES IN ISSUE: The number of shares available in the market Securities that for a given security as at the reporting date.
SHORT SQUEEZE (BEAR SQUEEZE): Where one or more market participants reduce liquidity by withholding securities that are "special"/in high demand for any of several reasons, are sought after in the market by borrowers. Holders of special securities will be able to earn incremental income on the securities by lending them out via repo, sell/buy, or securities lending transactions.
SPECIALS: Securities that for any of several reasons are sought after in the market by borrowers. Holders of special securities will be able to earn incremental income on the securities by lending them out via repo, sell/buy, or securities lending transactions
SPOT: Standard non-dollar repo settlement two business days forward. A money market convention.
SPREAD TRADE: Using lower yield securities as collateral in a repo and then reinvesting the cash received to buy higher yield securities which achieves a higher yield while minimizing the extra risk.
STOCK LENDING AND REPO COMMITTEE (SLRC): A U.K.-based committee of international repo and securities lending market practitioners chaired by the Bank of England and administered by the London Stock Exchange.
STRUCTURED REPO: A transaction, which enables a cash lender to give its counterpart, cash to a pre-arranged schedule. It allows the lender to look in a term rate while retaining and liquidity.
SUBSTITUTION: The ability of a lender of general collateral to recall securities from a borrower and replace them with other securities of the same value.