Securities Lending is a process in which an investor loans out securities to a borrower in exchange for cash or other securities. The borrower typically uses the borrowed securities to short sell them, hedge a position, or to gain access to a hard-to-borrow security. The lender earns a fee for lending out the securities, and maintains ownership of the securities throughout the loan.The lender also bears the risk that the borrower will default on the loan. Securities lending can be done directly between two parties or through a securities lending agent, who acts as a middleman and helps to match borrowers and lenders. Securities lending is regulated by the SEC in the US, and it is also regulated by other countries.
