This course introduces the concept of Scrip Liquidity Assessment within the Loan Against Shares (LAS) Credit framework. It focuses on evaluating the liquidity characteristics of pledged securities by assessing factors such as average traded volumes, bid–ask spreads, market depth, trading frequency, and price stability within secured lending operations.
Learners will explore key assessment dimensions such as evaluation of average traded volumes, bid–ask spreads, collateral value reliability, and management of credit exposures against listed securities, with an emphasis on independent validation and well-documented rationale. The course highlights how scrip liquidity assessment influences collateral acceptability, loan-to-value calibration, margin maintenance effectiveness, liquidation feasibility, concentration management, and overall portfolio resilience. It also examines how weak liquidity assessment practices can result in exposure to illiquid securities, delayed collateral liquidation, heightened price volatility impact, margin shortfalls, governance weaknesses, and elevated loss severity within LAS portfolios.
The course distinguishes scrip liquidity assessment from the broader credit approval process, emphasizing its role in exposure-level collateral liquidity evaluation, structured breach identification, valuation governance, and corrective action oversight, whereas the credit approval process focuses more broadly on borrower assessment, repayment capacity evaluation, policy alignment, and overall lending decision authority. Each requires distinct evidence standards, ownership, and approval authority.
By the end of the course, participants will understand how to design, assess, and implement scrip liquidity assessment frameworks in practice, particularly within LAS Collateral Eligibility and Valuation functions. The course also emphasizes the role of the credit analyst in executing assessments, completing documentation, and flagging exceptions for manager review within Loan Against Shares (LAS) Credit files, ensuring disciplined collateral governance, sustainable margin management, and alignment with credit committee priorities.