By ensuring transparent processes, robust operational controls, and alignment with international standards, AD CSD enables market participants to engage in SLB with confidence. This contributes to a more liquid and resilient capital market, supporting the strategic development of the UAE’s financial ecosystem.
Securities Lending and Borrowing (SLB) is a regulated financial mechanism that involves the temporary transfer of securities from a lender to a borrower. In return, the borrower provides eligible collateral and pays a pre-agreed lending fee. This mechanism plays a vital role in modern capital markets by enhancing market liquidity, facilitating efficient price discovery, and enabling sophisticated investment strategies such as short selling, hedging, and arbitrage.
Securities Lending & Borrowing SLB adds flexibility and resilience to capital markets. It enables smoother settlement, supports hedging strategies, and improves the overall trading environment. Globally, SLB is considered a vital tool for market liquidity and investment performance.
As the official Central Securities Depository (CSD) of Abu Dhabi, AD CSD provides the regulated framework and centralized infrastructure to facilitate streamlined and secure Securities Lending and Borrowing (SLB) transactions across the Abu Dhabi Securities Exchange (ADX). Our commitment ensures that SLB activities are conducted with the highest standards of integrity, transparency, and operational efficiency within the UAE capital market.
By providing this trusted framework for SLB activity, AD CSD significantly enhances liquidity, transparency, and investor confidence in the UAE capital market.
Securities Lending and Borrowing (SLB) at Abu Dhabi Depository (AD CSD) is facilitated through authorized Agents acting on behalf of Lenders and Borrowers. The process follows a structured workflow as outlined below:
Note: During the lending period, the Borrower is recorded as the legal and beneficial owner at AD CSD.
SLB at AD CSD is open to a wide range of investors and market participants, provided they meet the eligibility criteria:
AD CSD facilitates the safekeeping and settlement of a diverse range of financial instruments, including:
a) The UAE Federal Government
b) Local governments
c) Public authorities
d) State-owned corporations
- Earn Extra Income: Monetize idle assets through secure, fee-based lending.
- Portfolio Optimization: Improve overall returns without selling assets.
- Flexible Strategies: Enables covered short selling, arbitrage, and hedging.
- Market Making Support: Ensures availability of securities for fulfilling trading obligations.
- Settlement Coverage: Helps prevent delivery failures and maintains market discipline.
- Higher Liquidity: Broadens trading opportunities and reduces volatility.
- Efficient Pricing: Encourages accurate valuations via diverse market positions.
- Greater Participation: Attracts institutional and global investors.
