OCC Stock Loan/Hedge Program FAQs

What is the OCC Stock Loan/Hedge Program?
The OCC Stock Loan/Hedge Program ("Program") was created in 1993 by OCC to clear and guarantee stock loan transactions between Clearing Members. Through a legally binding novation process, OCC becomes the principal central counterparty ("CCP") to cleared transactions.

What is OCC's role as a Central Counterparty?
As the CCP, OCC becomes the borrower to the lender and the lender to the borrower. OCC guarantees the return of securities to the lender and cash collateral to the borrower.

What is OCC's guarantee?
OCC guarantees the return of securities to the lender and the cash collateral to the borrower. OCC also settles all mark-to-market payments throughout the term of a loan. Supporting OCC's guarantee is its three-tiered system of financial safeguards that include rigorous membership standards, prudent margin requirements and clearing fund deposits consisting of highly liquid assets.

How does the Program work operationally?
Stock loan transactions intended for clearance at OCC are initiated as bi-lateral transactions by OCC Clearing Members. These transactions are then processed through DTC's systems with a special OCC "reason code", which, after validation, are novated by OCC. Settlement of the securities vs. cash occurs at DTC. Mark-to-market payments are effected through the OCC's settlement system. OCC produces balancing reports and provides information to service bureaus.

How are Corporate Actions handled?
Corporate Actions are handled through DTC's Income Tracking System.

What are the margin requirements for the program?
Margin requirements are determined using OCC's STANS risk management system, a proprietary, portfolio-based margin methodology. Click here for more information.

What types of margin collateral can I post?
OCC accepts margin collateral in the form of: cash, eligible debt securities (e.g., U.S. or Canadian Government Securities, and GSE debt securities), letters of credit and stock.

How can I participate?
OCC Stock Loan participants must be both a DTC Participant and an OCC Clearing Member with supplementary approval for stock loan participation. Please contact your Clearing Member Representative for more information.

What are the fees to participate?
OCC clearing fees are $1.00 per new transaction assessed against each lender and borrower. Additionally, the borrower is assessed 0.4 basis point monthly annualized charge on average daily notional outstanding balances. There are no fees for returns or recalls.

Does the OCC act as a CCP for any other stock loan systems?
Currently, OCC provides CCP services for Automated Equity Finance Markets, Inc., a subsidiary of EquiLend Clearing LLC (ECS). The loan market operated by ECS is an SEC regulated Alternative Trading System. Please visit their website at for more information.

Who can I contact for more information?
Member Services, 800-621-6072.


Your acceptance of all cookies will permit robust site functionality. If you don't allow cookies, some features and functionality of OCC's site may not operate as expected. If you do not choose either cookie setting for our site, or if you close this window, this message will continue to display on each page you visit. Cookie settings can be controlled in your Internet browser to automatically reject some forms of cookies. For more details on cookies this site uses, see our OCC Site Cookies page. In addition to using cookies, we retain other information, including your Internet Protocol (IP) address, for the purposes listed in the Privacy Policy. Do not accept analytic cookies Accept analytic cookies