What is securities lending?
Securities lending is an established technique brokers use to generate more revenue. It means lending the stocks and ETFs to trustworthy third parties. At BUX we use this revenue source to keep our fees as low as possible.
On the last day of every quarter, we publish a report stating exactly which stocks and ETFs have been borrowed.
Why are we lending securities?
Our model is different to most brokers. We use additional revenue streams like securities lending to improve the service we provide and keep our fees and commissions as low as possible.
This means you have the ability to minimize the amount of fees you pay, helping you to build a portfolio over time.
It also means we can keep providing features like real-time quotes, free deposits and withdrawals, no custody fees, as well as access to an ever-growing list of assets and markets around the world.
Collateral will normally consist of government bonds and will be adjusted daily to ensure there is always sufficient.
BUX only works with professional parties (Tier 1) with vast experience in lending Financial Instruments.
It is important to take into account the borrower’s default risk. That happens when a company we have loaned stocks or ETFs to is unable to return them. This could happen for a number of different reasons, and that’s why we insist on sufficient collateral.
For the general Risk Disclosure, please refer to this document.
Which stocks and ETFs will be lent?
We do not know in advance which stocks and ETFs will be lent or when; sometimes just a part of the portfolio is lent and sometimes none of it. The market dictates the demand for the stocks and ETFs.
Do investors need to approve securities lending?
By becoming a client of BUX, you agree that the stocks and ETFs in Your account may be lent. You don’t need to sign any additional agreement. If you wish to check the most recent client agreement, please click here.
Can you sell the stocks and ETFs that have been loaned to another party?
Yes, you can sell the stocks and ETFs that have been loaned as you normally would. You will also receive any dividends that are paid out to the stocks and ETFs you own.