How does Securities Lending work?
After you enable Securities Lending, we may borrow certain securities from your account and lend them out to third parties. You will receive a monthly payment of any extra revenue generated by the loan of any securities we borrow, and we will collateralize you in accordance with the applicable regulations under Swiss law.
Note: You continue to retain the market risk of price fluctuation for your stocks on loan, just like you would if you didn’t lend those stocks. In addition, you continue to retain the right to sell your stocks at any point, irrespective of the loan. |
How do I enable or disable Securities Lending?
If you already have an account, you can enable or disable Securities Lending on your account on the Saxo platforms here:
- SaxoTraderGO: click Enable Securities Lending
- SaxoInvestor: click Enable Securities Lending
Otherwise you can follow the steps below:
Go to (My profile) > Your account > Enable Securities Lending
Changes will take effect on the same day.
How much could I earn by enabling Securities Lending?
If Saxo (Switzerland) Ltd. (“Saxo”) borrows securities from you, the additional revenue which you receive may fluctuate because of prevailing market conditions. You’ll always be able to see which securities are on loan and how much revenue (if any) you earn.
The additional revenue from Securities Lending accrues for each day that the securities are borrowed from you and is paid out to you monthly in the base currency of your Saxo account.
It is possible that Saxo does not borrow any of the securities on your account and therefore you may not receive any additional revenue by enabling Securities Lending. No lending or revenues are guaranteed by enabling the service.
Do I pay any custody fees?
Saxo does not apply any custody fees
Am I eligible to enable Securities Lending?
All new and existing direct clients of Saxo Bank (Switzerland) Ltd. can enable Securities Lending on their account.
Am I provided with collateral for lending my securities to Saxo?
For any securities that Saxo borrows from you, Saxo will provide you with collateral in accordance with the applicable Swiss regulations.
Saxo will provide you with collateral worth at least 102% of the market value of the securities lent (which are marked to market every business day) to secure your claim for restitution of the securities lent. In the unlikely event of Saxo’s insolvency you will be paid out ahead of all other creditors from the liquidation proceeds of the collateral.
Are there any risks involved in Securities Lending?
Please refer to the Risk Warning for Securities Lending here.
Will Saxo borrow all my eligible securities?
Not necessarily. There may be little or no demand to borrow your securities. Certain assets are in greater demand than others, and this demand will fluctuate over time. Across your portfolio you may find, for instance, that a majority of the assets you hold do not command a lending fee at any point in time. This means that it is possible you may not earn any revenue through Securities Lending.
Can I choose which securities to make available for lending?
When you enable Securities Lending, all eligible securities in your account become available for lending. Once enabled, you can exclude certain securities from being lent out by opening a new sub-account excluding Securities Lending and transferring the specific position(s) to this new sub-account. More information can be found here.
Why would third parties want to borrow my securities?
There are several reasons third parties may borrow securities. For instance, they may want to hedge their existing positions, to short markets in which they don’t own any shares, or to borrow assets to meet a demanding delivery deadline.
Can I see which of my securities are on loan?
You’ll be able to see on the platform under Portfolio which securities (if any) are on loan and what revenue (if any) you received.
Can I sell my loaned securities?
Yes, you can always sell your securities. The loan will terminate once you sell the security.
Note that you continue to maintain market risk on any securities on loan (i.e. if the price of your securities increases or decreases while the securities are loaned to Saxo, then the value of the securities which you will receive upon the termination/expiry of the loan will increase or decrease accordingly).
Can I still receive my dividends or coupon income on loaned securities?
Yes, you receive dividends or payment equivalents to applicable dividends.
Can I exercise my voting rights and attend shareholder meetings for loaned securities?
While your securities are lent out, you do not retain rights to vote or attend shareholder meetings (as applicable). These rights will be reinstated to you if the loan for the securities has terminated, or if you opt out of Securities Lending.
Can I enable again in the future after I have disabled Securities Lending?
Yes, you can enable Securities Lending at any time after it has been disabled.
What will happen to my loaned securities if the borrower defaults or Saxo is liquidated?
Saxo is the borrower of your securities. If Saxo borrows securities from you, Saxo will provide you with collateral worth at least 102% of the market value of the loaned securities (which are marked to market every business day). Such collateral is segregated from Saxo’s own money/assets and is therefore excluded from the money and assets of Saxo available to Saxo’s creditors (in the unlikely event of Saxo’s insolvency).
What happens if any of the loaned securities are subsequently halted from trading?
In such event, Saxo will terminate the loan and return the loaned securities to you. If Saxo is unable to return the loaned securities to you, Saxo will provide you with a cash payment equivalent to the applicable market value of the loaned securities.