Glossary
The language of securities-backed financing.
Plain-language definitions of the terms used across this site.
- Stock loan
- Credit secured by a pledge of listed shares; the borrower retains beneficial ownership and recovers the line on repayment.
- Securities-backed financing
- Umbrella term for credit secured by a portfolio of listed securities; a common synonym for a stock loan.
- Block trade
- Purchase or sale of a large line, worked off the order book at an agreed price and then printed to the exchange.
- Loan-to-value (LTV)
- The ratio of the amount lent to the market value of the pledged securities.
- Pledge
- The security interest granted over the shares in favour of the lender, held at a custodian.
- Recourse
- The extent of the lender’s claim on other assets on default: non-recourse, limited-recourse or full-recourse.
- Non-recourse
- A structure where the lender can look only to the pledged shares, capping the borrower’s loss.
- Free float
- The portion of a company’s shares actually available to trade, excluding control blocks.
- Beneficial ownership
- The right to the economic benefits of a security (dividends, gains), distinct from legal title.
- Bankruptcy-remote
- An arrangement that isolates the pledged shares from the insolvency risk of the parties, via a dedicated custodian.
- Cross-currency
- A loan drawn in a currency other than the listing currency of the pledged shares.
- Disclosure threshold
- The level of ownership in a listed company at which a holding must be notified to the market.
- Margin call
- A demand for additional collateral if the value of the pledged shares falls below a threshold.
- Tenor
- The maturity of the facility, typically 12 to 36 months.
- Custodian
- The institution that holds the pledged shares for the duration of the loan.
- Block discount
- The gap between a block’s execution price and the last traded market price.
- NVDR
- Non-Voting Depository Receipt: a Thai instrument allowing foreign holding without voting rights.
- Stock Connect
- Schemes linking the Hong Kong exchange with Shanghai and Shenzhen for cross-border access.
- Qualifying counterparty
- A professional or institutional investor meeting the criteria required for this type of transaction.
- Lombard lending
- A loan secured by a portfolio of securities, close to a stock loan in private-banking practice.