eToro Launches Stock Lending Program for Users

eToro plans to launch a stock lending program, allowing users in the UK and Europe to earn a passive income by lending their stocks. This initiative comes in collaboration with BNY, which will serve as the custodian, and stock lending platform EquiLend, responsible for identifying borrowers and facilitating the lending process. 

The rollout of this feature will occur gradually, beginning with members of the eToro Club, specifically targeting Platinum, Platinum+, and Diamond Club members. Later, the program will extend to lower-tier Club members. “Stock lending has traditionally been the preserve of large financial institutions, making it difficult for retail investors to earn passive income in this way. Yet, it is an important practice that supports liquidity in financial markets,” said Yossi Brandes, VP of Execution Services at eToro. 

“By leveraging BNY’s Global Clearing services, we aim to level the playing field, enabling millions of eToro users across the UK and Europe to engage with stock lending easily and transparently.” Eligible users can opt into the program, at which point the system will consider their entire portfolio of stock positions for lending.

eToro Launches Stock Lending Program for Users

Once users opt in, they receive monthly statements detailing their earnings if they successfully lend their stocks. However, only whole unit “real” stock positions qualify for lending, excluding CFDs and fractional shares. 

The system rounds eligible shares down to the nearest whole share, and borrowers are more likely to choose stocks with low market liquidity and high demand, which generate higher earnings because these stocks have collateral backing them. While users temporarily relinquish ownership of their stocks to the borrower, they retain the right to receive dividends, sell the stocks, or opt out of the program at any time without cost. This stock lending launch signifies expanding the growing clearing relationship between eToro and BNY, leveraging BNY’s Global Clearing platform to offer integrated solutions across international markets. 

Victor O’Laughlen, Head of Global Clearing at BNY, said, “We are pleased to expand our relationship with eToro.” “This development showcases the best of eToro, EquiLend, and BNY’s world-class platform.” Dan Dougherty, Managing Director at EquiLend, added, “This collaboration marks a significant advancement in the securities lending market, enhancing eToro’s services with a fully paid lending program that benefits from cutting-edge technology.”

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