TaxTMI 
TaxTMI 
AUTOMATED LENDING AND BORROWING MECHANISM (ALBM)
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....s, it has been decided that ALBM would now be permitted as a generic product. The basic purpose of ALBM would be to facilitate lending and borrowing of securities as envisaged by the Stock Lending Scheme 1997 (SLS). The ALBM however may also serve the purpose of deferral of settlement by netting off obligations in ALBM with obligations in the normal settlement. This would result in carrying forward of the positions in the normal settlement as in the case of Modified Carry Forward System. 3. ELIGIBILITY OF THE EXCHANGE TO IMPLEMENT ALBM An Exchange would be eligible to introduce the ALBM if it satisfies the following conditions : i. The exchange must demonstrate that it has a well-designed software for margin computation and well establis....
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....y owns the shares (and is using ALBM only for operational convenience or other reasons) or the seller actually has funds by which he could have taken delivery of the borrowed shares even if the ALBM transactions and trade transactions were not netted off. In other cases, the excess of the clearing price over the lending price would be credited to the Investor Protection Fund of the Exchange and shall not be released to the short sellers. 5.3 Margins 5.3.1 Margining on Gross Basis ALBM transactions, which are netted against trade positions, would be subjected to margining on the basis of gross positions i.e. positions grossed across clients. 5.3.2 ALBM Margin The margin on all trade positions that are proposed to be netted against ALBM ....
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....earing house/corporation. Once this margin is imposed by any Exchange having ALBM or MCFS facility, the other Exchanges having ALBM or MCFS will also follow the same from the start of next settlement. 5.3.4 Collection of Margins These margins would be paid 100% in cash or fixed deposits or government securities, or a combination of three. Mark to Market Margin shall be collected separately from daily/exposure margin as the purpose of the two margins is different. 6.0 RISK MANAGEMENT OF PURE SECURITIES BORROWERS' OBLIGATIONS TO RETURN SECURITIES 6.1 Pure securities borrower means a borrower of securities who does not have an offsetting long trade position. 6.2 Pure securities borrowers will have the option of depositing the colla....