Securities Lending

There is more to gain from your portfolio

Getting a fee while lending your shares and ETFs to others, that's securities lending in a nutshell.

Oh yes, you remain in full control of your assets, you are protected and selling can still be done at any time you like.

How does Securities Lending work?

When you temporarily lend your stocks or ETFs to other borrowing investors, that’s what you call securities lending.

These borrowing investors need to provide collateral (like cash) and pay a fee. They usually do this to cover a short position they are having in these securities. As a lender you keep the ownership benefits and you’ll get an extra income. At the end of the borrower’s short position, your securities are returned to you (and the collateral goes back to the borrower).

In full control
Even if you lend them out, they are and remain securities from your portfolio. You can sell them whenever you want, or stop lending them at any time. You are in control.
Collateral of 105%
Is lending your stocks safe? At Keytrade Bank we are asking the borrower a collateral of 105%. This should sufficiently cover the risk involved.
You remain the economic owner
Anyone who lends out securities remains the economic owner. Price risk and dividends (or at least the substitute payment for them) are and remain yours. Legally, during the lending period you are not the owner. For example, you are not allowed to attend the shareholders’ meeting.
Please note that you may sell your shares at any time, but doing so will of course also end the right to receive compensation for lending them out. It is therefore not the case that, as a lender of the securities, you are committed for a predetermined term.
A fee when lent out
Only when your securities are actually lent out, you will receive a fee from us. Making your portfolio available for securities lending does not necessarily mean that your assets will be lent. That all depends on supply and demand.
We will share the proceeds with you on a 50/50 basis, after deducting the costs of all intermediary parties. The amount of the compensation also depends on supply and demand.
50/50: a clear win win
You are sharing the fee paid by the borrower with Keytrade Bank. It’s a win-win situation. You receive your end because you lend out your securities. We receive ours because we actively intervene and handle the entire lending process for you.
We believe this to be a fair distribution, as the necessary risk management, monitoring, and administration involved in securities lending are not free.

Not without any risks

Even though your assets are protected by the 105% collateral, there are certain risks. We are very transparent about that.

Insolvency risk

In the unlikely event that Keytrade Bank becomes insolvent and we are unable to return your securities, you are protected by the 105% collateral.

Collateral risk

This is the risk that the collateral received loses value or cannot be liquidated fast enough to cover the borrowed securities if the borrower defaults