Share pledge costs and stamp duty: what a facility really costs
The cost items to compare across margin, bank pledge loans and share-backed financing.
Last reviewed 2026-10-25
Education only. This is not financial, legal or tax advice, and it is not an offer. Terms vary by provider and case. Take independent advice before you sign anything.
The short answer
The cost of financing against shares is more than the headline rate. Compare interest, upfront and ongoing fees, legal costs, any stamp duty, and currency conversion. Whether stamp duty applies usually depends on whether beneficial ownership of the shares changes, which differs by market and structure, so confirm it with a tax adviser before signing.
Cost items compared
| Cost item | Broker margin | Bank pledge loan | Share-backed financing |
|---|---|---|---|
| Interest | Floating, per currency | Fixed or floating | Set case by case |
| Upfront fees | Usually none | Arrangement fee common | Set out in the term sheet |
| Legal costs | Standard account terms | Borrower often pays | Agree who pays |
| Stamp duty | Depends on market | Depends on structure | Depends on structure; confirm with advisers |
| Currency conversion | Per trade | If drawn in another currency | Agreed in the term sheet |
Stamp duty on share pledges
In several Asia-Pacific markets, stamp duty is linked to transfers of beneficial ownership. A pure pledge or charge, where the holder keeps beneficial ownership, is often treated differently from a structure that transfers title. Rules and exemptions change, so ask a tax adviser in the market where the shares are listed.
How to compare term sheets
- Convert all costs into one total for the full term.
- Check when interest is paid and whether it is fixed.
- Ask how dividends are treated during the term.
- Check early repayment terms and any costs.
- Confirm whether any guarantee is required.
Why published rates rarely apply
Broker margin rates are published per currency, but large and concentrated holdings are priced individually. Specialist providers set terms after reviewing the stock, size, market and term, which is why a Fast Term Sheet is the practical way to compare.
Frequently asked questions
Usually on the amount drawn for the days outstanding, at the rate in the documents. Check whether it is fixed or floating and when it is paid.
It depends on the market and on whether beneficial ownership changes. Confirm with a tax adviser.
The documents set how dividends are treated. Ask before you sign.
Large and concentrated positions are priced case by case after review.
Squadron Capital works with listed holdings of USD 1 million or more.
Want indicative terms to compare?
Squadron Capital provides non-recourse, cross-border financing with no personal guarantee, for listed holdings of USD 1 million or more. A Fast Term Sheet gives you indicative terms to compare.
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