Will it affect how I can trade?
You can close, modify, and add to a position even if your shares are lent out. The Custodian always holds a large enough pool of shares so that even during the most critical of times, they can always give you back your lent out shares, should you wish to close a position.
Furthermore, we require collateral in the form of US Treasury Bonds held in a segregated third party account for your benefit.
This is an additional security measure to mitigate the risk for you. Both we and the Borrower monitor on a daily basis that the collateral’s value is equal to or more than 102% of the value of the shares lent.
Will I receive dividends from lent out shares?
Yes.
Lent out shares are generally recalled before the ex-dividend date in order to capture the dividend. If the recall does not take place, you’ll still receive a payment equivalent to the due dividend in the form of a manufactured payment. Please note that manufactured payments may be subject to different tax obligations. You remain responsible for any tax obligations you might have.
Voting rights
Voting rights cannot be exercised for lent out shares.