Pledging of Securities
An investor may use securities in their JCSD account as collateral, to secure a loan at a financial institution. The investor will need to confirm with the financial institution that they a participant in the JCSD’s Collateral Loan Programme. If they are not a participant, they may apply to the JCSD. The investor will complete the pledge form, which is done in four copies, and submit to their broker. The form must be signed by all holders on the JCSD account. The broker will check the details on the pledge form and submit to the JCSD for processing. Upon receipt the JCSD processes and confirms to the financial institution that the pledge is in place. Investors will not be able to transfer/sell any securities that have been pledged, they will still receive any benefits that are associated with the security such as dividends/interest payments, stock splits, bonus etc.
To have a pledge released, the financial institution will authorize the JCSD, in writing, to release the shares that were held on their behalf. This letter must be signed by two authorized signatories of the financial institution and must be on their letter head. The JCSD will confirm to the financial institution once the pledge is released.