Abstract
Purpose:
The aim of this study is to offer the current view on the subject, placing emphasis on studies that use Brazilian data and that could motivate new research.
Design/methodology/approach:
A bibliographic review of related studies and a secondary database.
Findings:
The contribution is to introduce this topic for the academic community in Brazil. We also present the main descriptive information for this market and its economic and policy implications.
Originality/value:
We contribute to the literature by summarizing the main works in the field, focusing on the Brazilian market, which has very detailed data and great potential for further studies.
Keywords:
Securities Lending; Short Selling; Regulation
Comment: Each circle represents a brokerage house involved in the stock lending process and the arrows show the direction in which the relationship occurs-lender and/or borrower. Only those brokers that traded more than 1 billion reais from Jan 2012 to Dec 2014 are displayed. The size of each circle represents the financial value that the brokerage house represented in the securities lending process for the period.
Comment: Evolution of the stock lending market for the most recent period disclosed by the B3 (08/21/2018 to 09/13/2018). The chart shows the companies that had transactions for every day of the sample and that had a financial value of over R$ 100 million. The left axis shows the average rate received by lenders for BBDC4, BOVA11, ITUB4, and PETR3 shares. The right axis shows the average rate received by lenders for RADL3 and CIEL3 shares. Source: B3 (http://www.b3.com.br)
Comment: Evolution of the stock leading market in the most recent period disclosed by the B3 (08/21/2018 to 09/13/2018). For each share, the value represents the spread between the fee paid by borrowers and the fee received by lenders. Source: B3 (http://www.b3.com.br)