Share lending is the process of a lender transferring their shares to a borrower. In return, the lender receives daily interest and collateral.
Am I eligible for share lending?
Invest accounts are eligible for share lending. ISA accounts can’t enroll due to HMRC regulations.
How does it work?
We lend shares from your portfolio to reputable borrowers and receive interest in exchange. We split all interest equally with you. Share lending is fully automatic and will never cause delays when selling.
Will share lending affect my position?
Share lending won’t impact your position. You can close, modify, and add to a position even if your shares are lent. Share lending will not affect your trading in any way.
Will all of my positions be lent?
Share lending is based on supply and demand. Shares with low availability and high demand are more likely to be borrowed. There is no minimum or maximum amount that can be lent.
How much interest will I receive?
Each day your shares are lent, Trading 212 will receive interest and pass you 50% of that interest. The interest rate is variable and based on supply and demand.
Will I receive dividends from lent shares?
You will still receive the entire dividend as a manufactured dividend payment.
What’s a manufactured payment?
A manufactured payment is when cash is delivered by the borrower of the shares instead of the stock issuer. In some countries, they are taxed differently from regular dividends. We suggest speaking with a tax professional if you have specific questions about its taxation.
Can I exercise my voting rights while my shares are lent?
When your shares are lent, you lose your right to vote with those shares.
Why are shares usually borrowed?
Shares are typically borrowed for short selling.
What is short selling?
If traders borrow shares to sell them short, they expect the share value to fall and aim to profit from a price drop.
Who usually lends securities?
Pension and insurance funds, ETF issuers, banks, and brokers.
Do I still own the shares that have been lent?
You remain the beneficial owner of the shares. This means that you still benefit from any rise in the value of the shares or lose when the share price falls.
Where can I learn more about share lending?
The International Securities Lending Association (ISLA) has an excellent video on the basics of share lending.