INMA 6.1.16 Collateral for customers' investments used for stock lending

(1) If a custody investment belonging to a customer is used for stock lending, the INMA firm concerned must ensure that:
(a) the borrower provides collateral, in the form of readily realisable investments, in favour of the customer;
(b) the firm monitors the current realisable values of the investment and the collateral daily; and
(c) if the current realisable value of the collateral falls below that of the investment, the firm provides collateral (in the form of readily realisable investments) to make up the difference, unless the customer agrees otherwise in writing.
(2) In this rule:

debt instrument, securities receipt, share, and warrant have the respective meanings given by FSR, article 110 and Schedule 3, Part 3.

Note Unit (in a collective investment scheme) is defined in the glossary.

readily realisable investment means:

(a) cash;
(b) a demand deposit;
(c) money deposited in a bank and available for immediate withdrawal;
(d) a short-term, highly liquid investment that is readily convertible to a known amount of cash and is subject to an insignificant risk of change in value;
(e) a debt instrument that is issued by or on behalf of a jurisdiction, or a public, regional or local authority of a jurisdiction, and is denominated in the jurisdiction's currency;
(f) any other security admitted to official listing on, or regularly traded on or under the rules of, a regulated exchange; or
(g) a newly issued security that can reasonably be expected to fall within paragraph (f) when trading in it starts.
Note Regulated exchange is defined in the glossary.
security means a debt instrument, a securities receipt, a share, a unit in a collective investment scheme or a warrant.
Derived from QFCRA RM/2014-4 (as from 1st January 2015).