Fully Paid Lending Program
Earn Income While Maintaining Full Ownership of Your Long Equity Positions
The Fully Paid Lending Program provides you an opportunity to earn extra income by lending certain securities you already own within your portfolio. We do all the work for you. There are no fees associated with the program. Learn more below.
How the Fully Paid Lending Program Works
Eligibility:
The Fully Paid Lending program is available to Cash accounts, IRA accounts, and Margin accounts. You must have a minimum of $50,000 in total account value to apply. Securities must be fully paid-for to be eligible for lending under the Fully Paid Lending Program. Positions eligible for lending are securities that are fully paid-for and excess-margin securities*.
Enrollment:
Please complete and submit the Fully Paid Lending Application and Agreement to our Customer Support team to begin. Once the application and agreement have been reviewed and approved, you are enrolled in the program. Moving forward, your cash account equity positions are eligible to be lent.
Commitment:
There are no long-term commitments. Your participation can be terminated at any time upon your written request.
Lending:
Hilltop Securities, our clearing firm, may borrow certain eligible equity securities from you based on demand in the securities lending market. You maintain full ownership and can sell your loaned shares at any time.
Earn Income on Your Loaned Shares:
Hilltop Securities, our clearing firm, will pay you income on borrowed securities each day your shares are on loan. Payments will reflect on a monthly basis.
View Income and Activity Online:
Accrued payments will be credited to your account on a monthly basis. This will be reflected in your Account History.
*Excess-margin securities are securities that have not been completely paid for, but whose market value exceeds 140% of the customer’s margin debit balance to Hilltop Securities.
Example of How Payment Works
| Number of Shares on Loan | Market Price | Total Market Value of Position | Annualized Lending Rate** | Daily Accrual Rate ($50,000 x 9.00%/ 360 days) |
Your Monthly Income in this Hypothetical Scenario ($12.50 x 30 days) |
|---|---|---|---|---|---|
| 5,000 | $10.00 | $50,000 | 9.00% | $12.50 | $375.00 |
Example of How Payment Works
| Number of Shares on Loan | 5000 |
|---|---|
| Market Price | $10.00 |
| Total Market Value of Position | $50,000 |
| Annualized Lending Rate** | 9.00% |
| Daily Accrual Rate ($50,000 x 9.00%/ 360 days) |
$12.50 |
| Your Monthly Income in this Hypothetical Scenario($12.50 x 30 days) |
$375.00 |
Complete the FPL Application & Agreement Below to Get Started
Important Considerations Before You Enroll
Voting Rights:
While you participate, and your shares are loaned out, you forgoe all voting rights on positions borrowed from your account.
While you participate, and your shares are loaned out, you forgoe all voting rights on positions borrowed from your account.
Dividend Payments:
Dividend payments will be made as cash in-lieu for shares that are lent. Hilltop Securities, our clearing firm, will make efforts to not lend shares pending a dividend payment, but this is not guaranteed. Tax treatment of payments made as cash in lieu versus dividend may have tax consequences. Please consult your tax advisor for clarity.
SIPC:
While your shares are on loan, they are not covered under Securities Investor Protection Corporation (SIPC). As a result, Hilltop Securities, our clearing firm, deposits collateral at a minimum of 100% of the loan value. In any securities transaction, counterparty default is a risk.
Here is a 2 minute video simplifying how Fully Paid Lending works:
Disclaimer: The information herein is intended to provide an overview of the FPL Program. Individuals seeking to enroll in the FPL Program must carefully review all documents provided at enrollment including, but not limited to, the Master Securities Lending Agreement and the Risk Disclosures Statement for the Fully Paid Lending Program, which contain important additional information and disclosures regarding the FPL Program. Success Trader does not give tax or legal advice.