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, 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, of which Apex provides Public with a portion of the interest they receive and keeps the rest.

Why does Public participate in Securities Lending?

In lieu of payment for order flow, and in order to offer you commission-free trading, Public relies on securities lending as one revenue stream to make money to provide you all of the services that you love. Public makes money by earning interest if Apex loans your shares to investors and institutions seeking to borrow shares.

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. What this means for you is if the value of the securities you have loaned increases, you still 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. Importantly for you, you are still able to sell your shares at any time.

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) that is at least 110% 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 110% 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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