How does Securities Lending work?
After you opt in to 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 collateralise you in accordance with the applicable regulations under Singapore law.
Note: You continue to retain the market risk of price fluctuation for your securities on loan, just like you would if you didn’t lend those securities. In addition, you continue to retain the right to sell your securities at any point irrespective of the loan.
How do I opt in to, or out of, Securities Lending?
When opening an account, you can activate Securities Lending as a step in the account application process.
If you already have an account, you can opt in or out of Securities Lending from your account in the platform by clicking here or by following the steps below:
SaxoTraderGo: Security Lending
SaxoInvestor: Security Lending
Go to My Profile/Menu > Your account > Earn more with Securities Lending
Changes will take effect within two business days, and typically on the same day.
How much could I earn by activating Securities Lending?
If 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 but 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 activating Securities Lending. No lending or revenues are guaranteed by opting in.
You will still get the custody fee waived no matter how many (if any) of your securities Saxo borrows and no matter how much revenue you may earn from a potential loan.
Do I get a waiver of custody fees when I activate securities lending?
Yes, You will get a full waiver of custody fees when you activate securities lending.
About custody fees
We charge custody fees for holding stocks, ETFs/ETCs and bonds on your behalf. As a Singapore resident or a Singapore-incorporated entity you don’t pay a custody fee for holding SGX stocks and ETFs.
The custody fee applicable to your Saxo account varies, depending on the account tier you’re on. We calculate your custody fee daily and debit your account on a monthly basis. You can learn more about the custody fee here.
More about Securities Lending
Am I eligible to activate Securities Lending?
All new and existing Singapore-resident individual direct clients of Saxo Capital Markets Pte Ltd – Saxo’s legal entity in Singapore – can activate Securities Lending on their account.
Am I provided with collateral for lending my securities to Saxo?
Yes. For any securities that Saxo borrows from you, Saxo will provide you with collateral in accordance with the applicable Singapore regulations.
For example, Saxo will provide you with collateral worth at least 100% 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).
You can also refer to a description of some of the risks involved with Securities Lending here.
What are some of the risks involved with 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.
You will still get the custody fee lowered or waived no matter how many (if any) of your securities Saxo borrows and no matter how much revenue you may earn from a potential loan.
Can I choose which securities to make available for lending?
When you activate Securities Lending, all eligible securities in your account become available for lending. You are unable to choose to only make certain securities available for lending.
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 securities Saxo borrowed from me?
Yes, you’ll be able to see which securities (if any) are on loan and what revenue (if any) you received.
Go to Portfolio > Securities Lending > View to check the details.
Can I sell loaned securities?
Yes, you can always sell your securities. If you sell a loaned security, the loan terminates.
Note that you continue to maintain market risk on any securities which Saxo has borrowed from you (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 dividends or coupon income on loaned securities?
Yes, you receive payments equivalent to applicable dividends or distribution on securities while they are lent to Saxo. You should consult a tax advisor regarding any potential tax implications of such payments.
Can I exercise 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.
If I activate Securities Lending, when will my custody fees be halved/waived?
Custody fees will be waived as soon as the account is activated for Securities Lending.
If I deactivate Securities Lending, how will custody fees be calculated?
Custody fees will be calculated exactly as they would be if you had not activated Securities Lending, from the next day after you submit the deactivation request. Please refer to more information about the custody fee applicable to the account plan you are currently on here.
Can I reactivate again in the future after I have deactivated Securities Lending?
Yes, you can reactivate Securities Lending again even after deactivating previously.
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 100% 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.