Regional market · Australia
Australian Securities Finance: Equities, Franking Credits & Repo
Australia has a well-developed securities lending market built on a large pool of superannuation assets, clear short selling rules and an active government bond repo market that the Reserve Bank of Australia (RBA) uses for its operations.
Last reviewed 27 October 2026
Superannuation funds as lenders
Superannuation funds and other institutions lend ASX-listed equities and Australian government bonds through custodian and agent programmes. Trustees balance incremental returns against counterparty risk, operational effort and stewardship duties, and many publish their approach to lending and recall.
Dividend imputation and franking credits
Australia's dividend imputation system attaches franking credits to dividends paid from taxed profits. Borrowers receiving a dividend while holding lent shares generally do not obtain the same benefit, and lenders receive a manufactured payment rather than a franked dividend. Holding period and related payment rules exist to prevent trading purely to capture credits. Lenders often recall shares before record dates when franking value matters to them.
Short selling and reporting
Naked short selling is generally prohibited, with limited exemptions. Covered short sales must be reported, and short positions above a set threshold must be reported to the Australian Securities and Investments Commission (ASIC), which publishes aggregated data. ASX also publishes daily gross short sales. Always check ASIC's current regulatory guidance for thresholds.
Repo and the RBA
The RBA conducts open market operations using repurchase agreements against eligible securities, and operates a securities lending facility for Australian Government Securities. The domestic repo market is used by banks, fund managers and offshore investors for funding and to source specific bonds.