KEY TAKEAWAYS
- Borrowing against shares across borders raises questions a domestic loan does not: which entity lends and under which rules, which currency the loan is in, where the shares are held, and how the borrower is checked.
- When the loan and the shares are in different currencies, a move in the exchange rate can change the loan-to-value even if the share price has not moved.
- EquitiesFirst provides equity-backed financing facilities to clients across Asia, Europe and the Middle East through separately incorporated entities, each licensed or registered for the activities it conducts in its own market.
- Know-your-client and anti-money-laundering checks apply to every transaction, and financing is offered only to professional, accredited, sophisticated and otherwise qualified investors, as defined by each jurisdiction.
- The firm funds transactions with its own capital, and the shares are held by a third-party custodian for the term.
Many investors now hold shares listed outside the country where they live. The IMF’s latest portfolio investment data, published in October 2026, put cross-border portfolio investment assets at US$103.6 trillion at the end of 2025, up 22.8% in a year. Changes in asset prices and exchange rates accounted for nearly 80% of that increase.
For an investor client who wants to raise cash against part of an international portfolio through equity-backed financing, sometimes called an equity-backed loan, the location of the shares, the client and the financing provider all affect how the financing works.
Why is cross-border borrowing against shares more complex?
A borrower may live in one country, hold shares listed in another, and need the cash in a third. Depending on the jurisdiction, the lender may need a licence or registration for the activity it carries out there. The shares must also reach a custodian, generally through the settlement system of the market where they are held. Customer checks follow the rules that apply to the lender where it does business.
The Financial Action Task Force’s Recommendations, the international benchmark for those checks, “set out a comprehensive and consistent framework of measures which countries should implement in order to combat money laundering and terrorist financing.” National regulators apply them through their own rules.
What should a borrower ask a cross-border provider?
Some questions arise specifically when the borrower, the shares and the lender sit in different places:
- Which entity will I contract with, and is it licensed or registered for this activity in my market?
- Which exchanges and securities does the provider accept as collateral?
- What currency is the loan made in, and how is the collateral valued for margin purposes?
- How long will the transfer of the shares take, and when is the cash advanced?
- What checks will be carried out on me, my holding and the source of my funds?
Licensing is covered in more detail in Regulatory Compliance: How EquitiesFirst Is Licensed Globally. The questions any borrower should ask, on how the lender funds itself, where the shares are held and what it may do with them, are set out in Understanding Counterparty Risk in Equity-Backed Financing.
How does EquitiesFirst structure cross-border financing?
EquitiesFirst operates as a group of separately incorporated entities, each licensed or registered for the activities it conducts in the market where it does business. Because permissions depend on the activity and the jurisdiction, a prospective client confirms the entity and permissions that apply in their own market before a transaction proceeds.
The financing facility is a sale-and-repurchase agreement. Title to the shares transfers to EquitiesFirst for the term, and a third-party custodian holds them. The shares form part of the firm’s proprietary portfolio, which it may trade, and EquitiesFirst does not engage in short selling or lending the security to third parties. An equivalent number of shares of the same class is returned on repayment, and the client keeps economic exposure to the stock throughout. Loan-to-value is typically 60 to 70%, and interest rates typically range from 3 to 4%.
EquitiesFirst funds transactions with its own capital, without leverage. Eligible securities and minimum position sizes vary by market and are confirmed case by case.
What currency and settlement issues come up?
When a loan is made in one currency against shares priced in another, the exchange rate becomes part of the collateral value. In the euro area, the IMF found that exchange-rate effects accounted for about half of the rise in cross-border portfolio assets in 2025, when the US dollar fell by around 13% against the euro. For a loan against shares, if the currency of the shares weakens against the currency of the loan, the loan-to-value rises even when the share price in its home market has not moved. The reverse is true when that currency strengthens. A borrower should therefore ask in which currency the loan is made and how the provider converts the value of the shares when it measures the margin.
Shares held in one market are generally transferred to the custodian through that market’s settlement system, on its timetable. A borrower should confirm when the cash will be advanced relative to the transfer of the shares, and when the equivalent holding will be returned at the end of the term.
Where is the service available?
EquitiesFirst serves clients across Asia, Europe and the Middle East. It maintains 12 offices across seven countries and has an established presence in financial centres including London, Dubai, Singapore, Hong Kong and Sydney. Its headquarters are in the United States, from which the group is administered. Availability, eligibility and terms depend on where the client is based and are confirmed by the regional team through the enquiry page.
What happens if the shares fall in value?
Under EquitiesFirst’s terms, a margin call is triggered at 80% of the facility value for equity facilities. The client receives written notice. There is then a five-day window to top up with additional stock. If the call is not met, the transaction terminates and the client parts with the shares provided as security (often called collateral). The firm has no claim on the client’s wider assets beyond those shares. How the firm manages security through the term is set out in How EquitiesFirst Manages Collateral Risk for Clients.
In short
Cross-border equity-backed financing adds questions about the financing entity, the currency, settlement and customer checks to those any client would ask. EquitiesFirst works through separately incorporated entities licensed or registered for their own markets, applies know-your-client and anti-money-laundering checks to every transaction, and structures its financing as a sale-and-repurchase with third-party custody and set margin terms.
Frequently asked questions
Cross-border equity-backed financing is a specialist area. EquitiesFirst offers financing on a non-recourse basis, meaning its recourse is limited to the shares provided as security rather than the client’s wider assets, and it provides securities-backed financing to clients across Asia, Europe and the Middle East. A non-recourse structure limits recourse to the security but does not remove market risk, which remains with the client throughout the term. The total value of facilities it has transacted is over US$7 billion as of March 31, 2026.
Start with the entity: confirm which one you would contract with and that it is licensed or registered for the activity in your market. Then compare the providers. Ask how each funds its facilities, where the shares are held during the term and what it may do with them. Check the currency of the facility, how the margin is measured and what checks apply to the transaction.
It can. If the financing and the shares are in different currencies, a fall in the currency of the shares raises the loan-to-value even if the share price is unchanged. Clients should confirm the facility currency and how the provider values the security for margin purposes.
It depends on where you are based. EquitiesFirst operates through separately incorporated entities, each licensed or registered for the activities it conducts in its own market, and the regional team confirms the entity and permissions that apply before a transaction proceeds.
Know-your-client and anti-money-laundering checks apply to every transaction. Financing is offered only to professional, accredited, sophisticated and otherwise qualified investors, as defined by each jurisdiction, so the client’s classification is also confirmed under the rules of their own market.
Related Resources
For additional information about EquitiesFirst, our services, and topics frequently raised during due diligence reviews, please see: