What is securities lending primarily concerned with?

Securities lending is primarily focused on the practice of loaning securities to other parties, often to facilitate short selling, hedge funds, or market-making activities. In this context, the loan is made with specific collateral requirements in place, which can include cash, other securities, or letters of credit. The use of collateral serves to protect the lender (the party who owns the securities) from the risk of default by the borrower (the party borrowing the securities). This mechanism is essential to ensure that both parties are safeguarded during the transaction, making it a critical aspect of securities lending processes.

The other options listed relate to different financial activities that do not encapsulate the essence of securities lending. For example, trading stocks on the open market is about buying and selling shares directly, while investing in corporate bonds pertains to fixed-income securities. Moreover, settling derivatives contracts revolves around the closure and fulfillment of agreements between parties based on underlying assets, which is separate from the nature of securities lending. Therefore, the emphasis on loaning securities with collateral requirements accurately captures the fundamental principle of securities lending, making it the correct answer.