Fully paid for securities lending opens new revenue opportunities for asset managers

Fully paid securities Hero
Securities lending generated $9.28 billion in revenue in 2021 and asset managers are increasingly turning to securities-based lending as a source of income and operating income offset. If you’re looking to extract every bit of return out of your long assets, a securities lending program may be the solution.
How can you benefit from securities lending?
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New revenue White
New revenue stream
Fully paid for lending can be a whole new revenue stream for managers.
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Maximize return on assets
If you’re holding a position long, it may accrue value over time, but fully paid for lending allows you to maximize the return on your assets in the short term.
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Straight process White
Straightforward process
All you need to do is enroll in the program and StoneX manages the process from there.

How fully paid securities lending works

StoneX Prime Services Securities Lending manages the lending process, from connecting lenders and borrowers to arranging for custody of collateral to settling fees after the term of the loan.

  • Lender earns a return on cash investment in a positive rate environment
  • Lender earns a fee for loans collateralized by Cash or Securities
  • Securities are recall upon request of the Lender or sale of securities by the lender
  • Borrower makes good on all dividends/interest payments paid while security is under loan
  • Customer is collateralized the same day
  • Collateral is maintained relative to the value of the loaned asset Borrower holds any voting rights attached to the loaned security
How it works

Are you ready to discover if a securities lending will work?

Explore the benefits of fully paid for securities lending, reach out and one of our prime services team will help.
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FAQs

What is securities lending?
Sometimes referred to as fully paid securities lending, securities lending is the practice of lending securities from one party to another. The recipient can then sell those securities to take a short position in the market. Made popular in the early 1980s, security lending service providers serve as facilitators of security lending transactions, handling the process for the lender.
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What is an example of securities lending?
An example of securities lending, or sec lending, would be where an asset manager has a long-term position in a particular security. That asset manager would then engage a sec lending services provider to make their inventory available to potential borrowers. The borrower would then take a short position in the market, selling the borrowed security and providing the sale proceeds as collateral for the loan. Then once the borrower no longer needs the security, they can initiate the process via the security lending service provider.
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