Lombard loan eligibility: who can borrow, and against what.

Lombard Financing arranges Lombard loans for professional investors, or the local equivalent, who pledge at least US$2 million equivalent of eligible collateral: freely tradable shares listed on a recognised exchange and free of existing liens. Indian-listed shares are not accepted, but an Indian issuer’s dual or secondary listing, or depositary line, outside India may qualify.

What are the requirements for a Lombard loan?

A Lombard loan arranged by Lombard Financing rests on five criteria: a minimum value of eligible collateral, the kind of shares pledged, their title, the borrower’s investor status, and one market exclusion. The table sets them out as they stand on 27 October 2026.

Criteria as at 27 October 2026. Not an offer, and not a commitment to lend.

Meeting the criteria makes a holding eligible; it does not fix the loan. The advance, the pricing and the conditions follow a review of the holding, and how a term sheet records them is explained in the Lombard loan term sheet, clause by clause.

Who can be the borrower?

The borrower can be an individual or an entity that owns the shares: a personal holding company, a family-office vehicle, or a trust acting through a trustee with power to grant the pledge. Whatever its form, the borrower must meet the investor-status test described below.

An individual borrows and pledges in their own name, against shares held in a custody account in that name, and is the person whose identity, wealth and investor status the lender checks.

A holding company or family-office vehicle borrows as itself. Its constitutional documents need to allow it to borrow and to grant security, and a lender may ask for a board resolution approving the facility, with evidence of who owns and controls the company. How such structures use Lombard credit is covered in family-office Lombard lending.

A trust borrows through its trustee: the trustee holds the shares, signs the facility and grants the pledge. The trust instrument needs to give the trustee power to borrow and to charge trust assets, and any consent the deed requires, such as a protector’s, needs to be in place. Whether a particular deed gives that power is a question for the trustee’s counsel.

Some investor-status regimes look through an entity to its owners. Hong Kong recognises an investment-holding corporation wholly owned by professional investors, and the United States an entity whose equity owners are all accredited investors; both regimes are summarised in the table below.

Which shares are eligible, and which are excluded?

Eligible collateral is freely tradable shares listed on a recognised exchange and free of existing liens. Four kinds of holding do not qualify: unlisted shares, Indian-listed shares, shares under a lock-up, and shares already subject to another lender’s charge.

• Unlisted shares. Shares in a private, unlisted company have no exchange listing, so they fall outside the criteria. Why lenders find them hard collateral is explained in borrowing against private company shares.
• Indian-listed shares. Shares listed on the National Stock Exchange of India or BSE are not accepted. An Indian issuer’s dual or secondary listing, or depositary line, outside India may qualify: see Indian issuers and their overseas lines.
• Shares under a lock-up. Shares the holder has undertaken not to sell for a period are not freely tradable until the lock-up ends. Borrowing against restricted or unvested stock explains when such holdings become pledgeable.
• Shares already charged. Shares pledged or charged to another lender are not free of existing liens, so they qualify only once that security has been released.

What does clean title mean?

Clean title means the party granting the pledge owns the shares and nothing already encumbers them: no pledge, charge or lien in favour of another lender, and no competing claim that would rank ahead of the new security.

A lender may confirm title from custody statements showing the holding in the pledgor’s name, and from the custodian’s confirmation that no other security interest is recorded against the account. Shares held in a margin account may already be subject to the broker’s security interest, so the account terms need checking. How the new pledge is then put in place is explained in how a Lombard loan is secured.

What investor status does the borrower need?

The borrower must be a professional investor or the local equivalent, and each jurisdiction sets its own tests for that status. The table summarises four such categories from the official texts, as checked on 27 October 2026.

Each category was written for its own regulatory purpose, such as private offerings of securities in the United States or a firm’s categorisation of its clients in the United Kingdom. Which category applies to a particular borrower, and on what evidence, depends on where the borrower is and who provides the facility: check with local counsel.

Thresholds as published in the official texts when checked on 27 October 2026 (Singapore excepted), in each regime’s own currency. Summaries only: each rule carries further conditions. General information, not legal advice.

In Hong Kong, a portfolio means securities, certificates of deposit and money held by a custodian, and an amount in Hong Kong dollars includes its equivalent in any foreign currency (sections 2 and 2A of the Securities and Futures (Professional Investor) Rules, in the version dated 13 July 2018).

Section 8 of the Hong Kong rules lets an individual’s portfolio be ascertained from a custodian’s statement or certificate, an auditor’s or certified public accountant’s certificate, or a public filing, issued or submitted within the previous 12 months. A corporation, partnership or trust corporation may also refer to its most recent audited financial statement prepared within 16 months.

In the United States, Rule 501(a) defines the accredited investor for Regulation D, and the SEC notes that many offering exemptions under the federal securities laws limit participation to accredited investors. The SEC’s Accredited Investors page, last reviewed or updated on 24 April 2026, names the designated certifications as the Series 7, Series 65 and Series 82 licences. The text of Rule 501(a) on eCFR was current to 23 October 2026 when checked.

In the United Kingdom, an elective professional client must state in writing that it wishes to be treated as one, receive a clear written warning of the protections and compensation rights it may lose, and confirm in a separate document that it is aware of the consequences (COBS 3.5.3R(3)).

In consultation paper CP25/36, published on 8 December 2025, the FCA proposed removing the quantitative test and adding an alternative wealth assessment. Check with local counsel whether those proposals have since taken effect.

In Singapore, the accredited investor category sits in section 4A of the Securities and Futures Act 2001. Its full thresholds could not be verified against the official text on 27 October 2026, so they are not given here: check with local counsel.

A written parliamentary reply from the Monetary Authority of Singapore on 5 February 2025 says Singapore’s accredited investor criteria were last updated in 2018, when a S$1 million cap on the value of an individual’s primary residence was introduced into the net personal assets test, and that eligible investors must expressly opt in.

Who qualifies for securities-based lending in the United States?

In the United States, borrowing against a securities portfolio is called securities-based lending, and a Lombard loan is the same instrument under its European name. A US borrower is assessed against the same criteria as any other: the US$2 million equivalent minimum, freely tradable listed shares free of existing liens, and professional-investor status or the local equivalent.

The US category in the table above is the accredited investor of Rule 501(a). A broker’s securities-based line of credit is a different arrangement, a revolving limit against an investment account, compared with a Lombard facility on the securities-based lending page. Holders whose broker declines to lend are covered in when your broker won’t lend against your shares.

How do insider rules, lock-ups and company policies affect a pledge?

Shares that trade freely can still be restricted for a particular holder. Insider dealing rules and closed periods, a lock-up, or the issuer’s own policy on pledging can prevent or delay a pledge, or make it public, so each needs checking for the holder concerned before a pledge is granted.

Article 19 of the UK Market Abuse Regulation treats a pledge of an issuer’s shares by a person discharging managerial responsibilities within it, or a person closely associated with them, as a transaction to notify to the issuer and the FCA within three working days, once the annual threshold in Article 19(8) is reached. A pledge made on depositing instruments in a custody account need not be notified until it is designated to secure a specific credit facility.

Article 19(11) also bars such a person from dealing on their own account, or for a third party, in the 30 calendar days before the announcement of an interim or year-end report, and Article 19(12) lets the issuer permit dealing only in limited circumstances. Whether a pledge, or its enforcement, can go ahead in a closed period depends on the facts: check with local counsel.

In the United States, Item 403(b) of Regulation S-K requires a registrant’s table of shares beneficially owned by its directors and executive officers to indicate the amount pledged as security, and Item 403(c) requires it to describe any pledge known to it that may later result in a change in control.

A lock-up is an undertaking not to dispose of shares for a set period, given for example to the underwriters of an offering. Shares under a lock-up are not freely tradable until it ends, which is why they fall outside the criteria.

An issuer may also restrict or prohibit pledging by its directors and officers through its own insider-dealing or governance policy. Such a policy can rule out a pledge that the law of the market would allow, so a lender may ask to see it. How pledge disclosure compares across markets is set out in share pledge disclosure rules by market.

What documents may a lender ask for?

A lender may ask for evidence of who the borrower is, how its wealth was built, and what it is pledging. The list varies by lender and by jurisdiction; the headings below describe what a request may cover.

• Identity and address. Identity documents and proof of address for an individual borrower, and for the people who own, control or act for an entity or trust.
• Source of wealth. Evidence of how the borrower’s wealth as a whole was built, such as the sale of a business, an inheritance or earnings over a career.
• Source of funds. Evidence of where the assets in the transaction came from: here, how and when the pledged shares were acquired.
• Entity and trust documents. For a company, its constitutional documents, registers of directors and shareholders, and a board resolution; for a trust, the trust instrument and details of the settlor, trustees, any protector and the beneficiaries.
• Custody statements and ownership structure. Recent statements showing the holding and where it is held, and a chart tracing ownership from the borrower down to the shares.

The firm’s own enquiry stage needs no material non-public information: it works from publicly available details about the position, as the process from enquiry to funding sets out.

How does the size of a position affect the loan-to-value?

Size decides eligibility only at the threshold: the eligible collateral needs to be worth at least US$2 million equivalent. Above that, size bears on the loan-to-value through liquidity rather than through scale alone.

A position that is large relative to the stock’s daily traded volume or its free float would take longer to sell in an orderly way, so a lender may advance a smaller fraction of its value than against a smaller holding in the same stock, or against a diversified portfolio of liquid shares. The drivers are set out in how much you can borrow against shares.

A single concentrated holding raises the same question from the borrower’s side, as borrowing against a concentrated position explains.