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| Borrower | A financial intermediary or party who wishes to borrow securities because they need to sell or complete a sale of securities, and they do not own the securities they are intending to sell.
A borrower may also enter a securities lending transaction because they need to meet margin requirements on an unrealised loss and can do this more cheaply by borrowing securities than by depositing cash. Alternatively, a taxpayer may enter into a securities loan because they are acting as an intermediary between longer term lenders and shorter term borrowers. |
| Imputation trading | Where a shareholder who is unable to use imputation credits, transfers their shares, on a temporary basis, to another taxpayer who is able to use the credits. |
| Lender | The owner of the securities who enters into a securities lending transaction in order to obtain an additional return by way of lending fees on top of returns attaching to the security itself. Often a pension scheme or superannuation fund. |
| Margin requirements | Where a taxpayer with an unrealised loss is required as a condition of their securities transaction to deposit an amount to cover an agreed portion of this loss. |
| Repurchase agreement | A transaction where securities are sold for cash consideration. The seller is obligated to repurchase the securities at some later point in time at a higher price which reflects a premium (or interest) to the buyer. Typically, such transactions do not extend beyond interest or payment dates. These transactions are also known as "Repos". |
| Securities lending transaction | An agreement where securities are lent in consideration for the return of equivalent securities at a later date (plus payment of a fee). |
| Substitute payment | A payment by a borrower to a lender to reimburse the lender for any dividends and interest paid on the securities over the term of the securities lending transaction. This is also known as a "manufactured dividend". |