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Who benefits when brokerage firms borrow stocks from the accounts of their customers— the firm or the customers from whose account the stocks were borrowed?
The act of lending out a customers stocks by a brokerage firm is called shorting stock, and lol profits made from it goes to the brokerage firm. The main reason why the brokerage, and not the individual holding the shares, receives the benefits of loaning shares in a short sale transaction can be foRead more
The act of lending out a customers stocks by a brokerage firm is called shorting stock, and lol profits made from it goes to the brokerage firm.
See lessThe main reason why the brokerage, and not the individual holding the shares, receives the benefits of loaning shares in a short sale transaction can be found in the terms of the margin account agreement. When a client opens a margin account, there is usually a clause in the contract that states that the broker is authorized to lend—either to itself or to others—any securities held by the client. By signing this agreement, the client forgoes any future benefit of having their shares lent out to other parties.
When you short sell a stock, the broker will lend it to you. The stock will come from the brokerage’s own inventory, from another one of the firm’s customers, or from another brokerage firm. Sooner or later you must close the short by buying back the same number of shares and returning them to your broker. If the price drops, you can buy back the stock at the lower price and make a profit on the difference. If the price of the stock rises, you have to buy it back at the higher price, and you lose money.
Most of the time, you can hold a short for as long as you want. However, borrower can be forced to cover if the lender wants back the stock they borrowed.
Is Japan a favorable country to engage in business as an Expat?
Procedure can be rather draining when starting a business in Japan, with several layers of bureaucracy to be navigated before a company can get off its feet. Organisations are required to communicate with the Ward office, the Legal Affairs Bureau of the Ministry of Justice, the District Tax Office,Read more
Procedure can be rather draining when starting a business in Japan, with several layers of bureaucracy to be navigated before a company can get off its feet. Organisations are required to communicate with the Ward office, the Legal Affairs Bureau of the Ministry of Justice, the District Tax Office, the local tax office, the Labor Standards Inspection Office, the Japan Pension Service and the Public Employment Security Office before other procedures can be considered. It takes several days to arrange construction permits, some 14 procedures must be navigated, again involving several governmental departments and local authorities. Registering property is a lengthy procedure, and requires a certificate of the seller’s seal impression, payment of stamp duty at a post office, application at the Legal Affairs Bureau and payment of real property acquisitions tax. A modern finance system means obtaining credit is a relatively simple procedure in Japan. The legal system also offers good protection to investors, although the process certainly isn’t as streamlined as in other nations. Also, the Japanese tax system is a victim of the country’s love of bureaucracy. Corporate tax rates stand at 30%, with a line of other levies also requiring consideration.
See lessAs much as Japan is a big and industrious place to have your business, you have to weight the advantages and disadvantages of setting a business in Japan.