ZagTrader

Settlement status codes

LALO: Securities are Loaned Out

Written and maintained by ZagTrader. Last reviewed . How this page is sourced and checked

LALO tells you that the securities needed for the delivery are out on loan, usually through a securities lending programme, and are not available until they are returned.

Code
LALO
Kind
Reason (24B)
Used with
PEND, PENF, PPRC

What LALO means

Asset owners often lend securities through their custodian’s lending programme. When they sell, the sold securities may still be on loan. LALO says the shortfall comes from that loan, which is more precise than a plain LACK.

Under PEND the loan can still be recalled in time; under PENF the delivery is failing. Under PPRC the custodian has not processed the instruction because the position is lent.

When you see it

  • On deliveries from accounts that take part in a securities lending programme, when the sale was not notified to the lending desk early enough for the recall to settle by settlement date.

What to do next

  • Check that the sale was notified to the lending agent and a recall was issued; the recall has its own settlement cycle in the market.
  • Check your lending agreement for who bears the cost when a delivery fails because a recalled loan came back late.

Where it appears in MT and ISO 20022

MT (ISO 15022)

  • MT548 sequence A2a (REAS), :24B::PEND//LALO, :24B::PENF//LALO or :24B::PPRC//LALO.
  • MT537 sequence B1 or C3a, :24B::PEND//LALO or :24B::PENF//LALO.

MX (ISO 20022)

  • sese.024 SttlmSts/Pdg/Rsn/Cd/Cd = LALO or SttlmSts/Flng/Rsn/Cd/Cd = LALO.
  • sese.024 PrcgSts/PdgPrcg/Rsn/Cd/Cd = LALO for pending processing.