Clients are now able to borrow stocks and short sell through Core Pacific-Yamaichi.

Before borrowing stocks, client needs to open a Stock Borrowing and Lending (SBL) Account. Client needs to sign the following documents:

*4 copies of Stock Borrowing and Lending Agreement
(2 will be used for doing registration in Inland Revenue Department, 1 will be given back to client)
*2 Authorisation Forms (Authorisation to deal with client money Form and Authorisation to dispose of,
lend or deposit Securities and/or Securities Collateral Form)
*2 Stock Borrowing and Lending Agreement Registration Forms
(used for doing registration in Inland Revenue Department)

If clients want to borrow stocks and do short selling, please contact your stockbroker at Core Pacific-Yamaichi.

Reminder

i. Stock Return

1. Client buys back / deposits stock physically for stock return – cut-off time is 11:00am.

 

*The stock is considered to be returned on that day only when client notified CPY before 11:00am

*The stock is considered to be returned on the next day when client notified CPY after 11:00am

 

2. Client is requested to return stock – cut-off time is 12:30pm.

 

*If the request is made before 12:30pm,
the stock return notice is considered to be made on that day

*If the request is made after 12:30pm,
the stock return notice is considered to be made on the next day

ii. Client is responsible to pay back CPY the income which CPY is supposed to receive during the stock lending period.

Example 1:
Client Chan Dai Man borrowed 1600 shares of Hong Kong Bank and sold them at $87 on 7th May,
on 8th May Hong Kong Bank went ex-dividend (HK$1 per share).

Although Chan Dai Man did not receive the cash dividend, when he returns the stocks to CPY,
he has to pay the dividend HK$1600 to CPY.

Example 2:
Client Chan Dai Man borrowed 1600 shares of Hong Kong Bank on 7th May, on 8th May Hong Kong
Bank went ex-dividend (HK$1 per share). Chan Dai Man sold the 1600 shares Hong Kong Bank on or
after 8th May.

Chan Dai Man received the cash dividend (less than HK$1600 because of the transaction charges,
when he returns the stocks to CPY, he has to pay the exact amount of dividend HK$1600 to CPY.

For more information about CPY's financial products services, fax us at (852) 2523-9925, or contact:

Mr. Landal Kam: (852) 2826-0729, e-mail: landal.kam@cpy.com.hk