Prior to the transactions registration at the securities clearinghouse, an agreement between the parties must take place through the offering and acceptance in the registration system (Sisbex). This agreement can be reached either through an Over-The-Counter (OTC) negotiation or public offering in the Sisbex.
The Lender provides a quantity (lot size) of bonds through an authorized intermediary broker (clearing member) that will register the loan agreement in exchange for a committed fee by the borrower upon the loan registration.
The borrower must put up collateral required by the clearinghouse (plus additional margin if required by the clearing member) and accept the offer in order to receive the bonds for a certain period of time. The bonds on loan may be freely used by the borrower; however, it must return equivalent bonds at the end of the agreed period.