Margin Lending And How It Operates

1031 WordsJun 12, 20155 Pages
Margin Lending and how it operates in the Market: An analysis of the concept of margin lending indicates that it is a process that allows people in borrowing money from lending institutions and the money as borrowed is utilised for the purpose of making investment. The credit as provided by the lending institution is based on assets as hold by the borrower and they are required to be pledged as collateral on the loan. The main purpose of borrowing such margin money is mainly to accomplish the investment purpose of the organisation. It is therefore regarded as an investment strategy which allows for borrowing money so that it can be invested (Margin Lending, 2015). This process of margin lending money works in a procedural manner. In this…show more content…
The profit or loss made from the securities is adjusted to this margin lending account and once the money is depleted, it needs to be refilled with additional cash. This is the way or process in which margin money lending work (How does margin lending money work? 2015). Major Operators in the Australian Market: An analysis of the Australian market in particular suggests that there are large numbers of margin lending money provider and they operates in Australia with the purpose of meeting out the margin money requirements of people at large. The investors requiring margin money can get them easily through the consideration of the various major operators throughout Australia. An analysis indicates that the major margin lending operator based in Australia are classified as Australian Securities and Investment Commission (ASIC) as this particular regulatory authority accounts for controlling the margin lending regime in Australia (Margin Lending, 2015). An analysis of the margin money lending regime as controlled by ASIC indicates that the regulation of margin lending is performed as per Corporation Legislation Amendment Act which commented on 1st January 2010, and it is regarded as a part of government’s national regulation of consumer credit. The fiscal condition that the major operator imposes on the new entrants or consumers can be identified in the form of
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