1. -loan of securities by one broker to another, usually to cover a customer's short sale. The lending broker is secured by the cash proceeds of the sale.
2. -in a more general sense, loan collateralized by Marketable Securities. These would include all customer loans made to purchase or carry securities by broker-dealers under Federal Reserve Board Regulation T margin rules, as well as by banks under Regulation U and other lenders under Regulation G. Loans made by banks to brokers to cover customers' positions are also collateralized by securities, but such loans are called broker's loans or call loans. See also Hypothecation; Lending At a Premium; Lending At a Rate; Lending Securities; Rehypothecation; Selling Short.
