Lend your stocks, earn passive income*

Activate Stock Lending in the app and we’ll lend out your stocks and ETFs when there is demand for them.

Create a BUX account

Passive income

When your stocks and ETFs are lent out, you’ll get paid while still holding onto your investment.

No long-term commitments

Cancel anytime. You can start or stop Stock Lending in the app.

Stay in control

 Even though your stocks and ETFs are “on loan,” you can still track them, trade them, and receive dividends, just like normal.

How does it work?

Stock Lending is a process in which stocks, ETFs and ETCs are temporarily lent by the owner through an intermediary agent lender to a borrower, in exchange for an income and collateral. It’s similar to renting out your valuable items—you earn income, and your possessions are safeguarded until returned.

To keep your shares safe and sound, borrowers provide extra collateral that’s worth more than the loan. If anything goes wrong, this collateral steps in to buy back your shares.

With your agreement, BUX facilitates the lending of your assets, transferring them from your account to selected third-party borrowers, such as banks and hedge funds. If your stocks or ETFs are on loan, you temporarily lose shareholder rights but retain economic benefits, such as dividend payments. If your assets are lent, the borrower pays a fee which we share with you on a 50/50 basis after deducting costs. You can opt-out at any time.

Every month, we publish a report stating exactly which stocks and ETFs have been borrowed. We will send this to you by email. If we do not share a report it means none of your assets have been borrowed.

This entire process happens in the background, so you won’t even notice it’s happening.

How much can you earn?

How much you earn depends on the demand for your assets, the size of your holdings and current lending rates. The higher the gross lending rates and the portion of loaned out assets, the more you can potentially earn. However, if no one “borrows” your stocks, you won’t receive any income. 

We deduct operational costs and 3rd party lending agent fees from the gross return paid by borrowers. This net annualised return is then shared 50-50 with you. As of 6 January, this implies that clients receive approximately 30% of the gross rate paid by borrowers. Please note that these aggregated costs will fluctuate based on actual operational costs incurred by BUX and arrangements with lending agents.

What are the risks?

    For detailed information about the risks, please check the Stock Lending Handbook and Risk Disclosure. You can find a summary below.

  • Borrower Default Risk: When you lend your assets, ownership is temporarily transferred to the borrower. BUX holds a claim for their return, backed by collateral. If the borrower fails to return them, the collateral will be used to repay you. However, if the collateral isn’t enough, there’s a chance you might not recover your full investment.
  • Repurchase Risk: If the borrower can’t return your loaned assets, we’ll use the collateral to buy them back for you. But if that collateral isn’t worth enough—for instance during a market dip—you might lose some of your investment. 
  • Selling Risk: Normally, lending out your financial instruments doesn’t stop you from selling them when you want. But if a lot of BUX clients decide to sell at the same time, you could face delays in selling your asset.
  • Timing Risk: If BUX needs to use collateral to return your loan, there may be a period during which your assets are not immediately available for sale. This could mean a temporary wait before you can sell them.
  • Price Risk: Whether your financial instruments are lent out or not, their value can fluctuate. So, you’re still at risk of losing money if the market goes the wrong way.
  • Operational and third party risks: BUX collaborates with experienced third parties to provide administrative and custodial services for securities lending. However, if any of these service providers face issues such as insolvency or defaults, there is a risk that the return of your lent financial instruments and related activities could be delayed or impacted negatively.

    If you want to read about additional risks, please check Page 5 of the Stock Lending handbook.

    For the general Risk Disclosure, please refer to this document.

    FAQ

    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. Even if you give consent, it is not sure your stocks will be lent out.

    Will investors receive dividends on loaned out stocks?

    Yes, you will still receive dividends as usual.

    Do investors need to approve Stock Lending?

    BUX doesn’t lend out stocks and ETFs by default. You can easily activate the ‘Stock Lending’ service whenever you want in the app-settings.

    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.

    If there are other aspects you’d like information about, please take a look at the Stock Lending Handbook – or reach out to our friendly Customer Support team.

* By signing the agreement, your stocks will be eligible for loans from 6 January 2025 onward.

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