How does the Fully Paid Securities Lending Program work?

Our clearing firm, Apex Clearing (“Apex”), operates a fully-paid securities lending program (the “Securities Lending Program”). If you are enrolled in the Securities Lending Program, Apex can loan out whole shares in your account to investors and institutions (e.g., retail investors, banks, market makers, and institutional investors). Shares loaned out by Apex are typically used by borrowers to facilitate short sales. These borrowers pay a market-driven interest rate to Apex. Apex provides Public with a portion of the interest they receive and keeps the rest.

Who can participate in the Fully Paid Securities Lending Program work?

Most of our customers are eligible to participate in Fully Paid Securities Lending.

We do not allow customers to participate in Securities Lending if you:

  • Have less than $5,000 in your Public brokerage account, and

  • Have less than $50K in annual income, investable assets, and net worth, and

  • Have a stated investing goal to preserve capital and no stated investing experience

Why does Public participate in Securities Lending?

In lieu of payment for order flow, and to offer you commission-free securities trading, Public relies on securities lending as one revenue stream to make money to provide you with all of the services that you love.

How does participation in Securities Lending affect me?

You still maintain full economic ownership of securities on loan and are able to sell the stocks at any time. If shares you own are loaned out by Apex, your market exposure on those loaned shares does not change. If the value of the securities you have loaned increases, you keep those market gains. Conversely, if the value of the securities you have loaned decreases, your position still accrues those losses. As a reminder, gains and losses from market movement are not guaranteed or locked in until the position(s) are sold.

That said, loaning out shares does affect you in some ways. If Apex has loaned out your shares:

  • You waive voting rights in those shares while they are out on loan

  • You may receive payments in lieu of dividends while they are out on loan, which could affect the taxes you pay

  • Your shares may not be covered by SIPC protection while they are out on loan. To make up for the loss of SIPC coverage, Apex is required by law to post collateral (in cash or cash equivalents) of at least 110% of the value of the loaned shares at a partner bank

For additional information, please see Apex’s Fully Paid Securities Lending Disclosures.

What if Apex doesn’t return the shares it borrowed from me?

To make up for the loss of SIPC protection, Apex Clearing holds collateral (usually cash) of at least 100% of the value of the loaned securities. This collateral is held at a third-party financial institution to hedge the risk of default.

In the unlikely event that Apex fails to return the loaned securities, this collateral may be your only remedy. While Apex is contractually obligated to post 100% cash collateral, there may be some highly unlikely circumstances where the collateral held on your behalf may not equal or exceed the value of the loaned securities.

For additional information about Apex’s collateral obligations, please see the Apex Clearing Master Securities Lending Agreement.

Can I leave the Program?

Yes, you may opt-out at any time by emailing us at with “Securities Lending Opt-Out” in the subject.

Where can I learn more about the Program?

For more information on fully paid securities lending, please see our Apex’s Master Securities Lending Agreement and Apex’s Fully Paid Securities Lending Disclosures.

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