I wasn't really sure where to put this, or if anyone can even give me the answer i'm looking for ...
Being a Friday night, I wasn't sure how long a post would stay visible on the login board, so I thought this was the least posted on forum and it would stay up longer.
Anyways, I have a question related to the borrowing and lending of shares via ASX ... and I'm confusing myself, perhaps someone can explain it in simple terms?
Say a company has 100 million shares on issue.
I own 10 million shares and someone wants to borrow them all from me for some reason ( ... shorting?).
I charge a fee etc. for this arrangement and loan them my shares.
As a listed 'participant' of loaning and borrowing on the ASX, I upload my loaned shares report (and presumably the borrower does as well, looking at the daily ASX reports) via the ASX Online platform, as is the requirement on the day but at least within the three day lockout.
I loan all 10 million shares I own to person A.
Person A short sells them all on the market and four people buy them, persons W X Y and Z.
My question is:
As the loaner, is my reduced holding balance with the company reflected on their register?
Are the new holders (W, X, Y and Z) increased holding also reflected on the company register?
(Now at this point I'm thinking they should, as otherwise I have increased the shares on issue by 10%)
However, if i've reported the loan via the ASX, does this mean that this temporary increase in shares is an illusion?
Once the shares are paid back, do W, X, Y and Z drop off the register or, if they are purchased from parties other than W, X, Y and Z is this irrelevant?
Yes, I've read all the ASX rules and pages related to borrowing and lending, i'm just thinking it's all just smoke and mirrors for retail investors.
I'm not sure if this is clear, but if you're in the industry you'll probably get where i'm coming from ...
