Explain the concept of Securities Lending and rules applicable thereon, if any.

Securities' lending describes the market practice whereby securities are temporarily transferred to another (borrower) by the lender via an approved intermediary. The borrower is obliged to return them either on demand or at the end of an agreed term. Lender may recall securities at any time within the normal market settlement cycle. Securities lending helps in improving market liquidity, more efficient settlement, tighter dealer prices and perhaps a reduction in the cost of capital. Securities lending and borrowing (SLB) scheme for all market participants in the Indian securities market under the over-all framework of 'Securities Lending Scheme, 1997' of SEBI specified by SEBI vide circular No. SMD/POLICY/SL/CIR-09/97 dated May 07, 1997 to provide a mechanism for borrowing of securities to enable settlement of securities sold short. The SLB shall be operated through Clearing Corporation/Clearing House of stock exchanges having nation-wide terminals who will be registered as Approved Intermediaries (AIs) under the SLS, 1997. The SLB shall take place on an automated, screen based, order-matching platform which will be provided by the AIs. This platform shall be independent of the other trading platforms. All categories of investors including retail, institutional etc. will be permitted to borrow and lend securities. The AIs, Clearing Members (CMs) and the clients shall enter into an agreement specifying the rights, responsibilities and obligations of the parties to the agreement. The agreement shall include the basic conditions for lending and borrowing of securities as prescribed under the scheme. The AIs shall allot a unique ID to each client which shall be mapped to the Permanent Account Number (PAN) of the respective clients. The tenure of contracts in SLB may be up to a maximum period of 12 months. The Approved Intermediary (Clearing corporation/ Clearing House) shall have the flexibility to decide the tenure (maximum period of 12 months). The settlement cycle for SLB transactions shall be on T+1 basis. AIs shall disseminate in public domain, the details of SLB transactions executed on the platform provided by them and the outstanding positions on a weekly basis. The frequency of such disclosure may be reviewed from time to time with the approval of SEBI.