US multi-asset brokerage Interactive Brokers (NASDAQ:IBKR) said its Canadian unit has launched a Stock Yields Enhancement Program, under which clients can lend the broker shares they own from companies listed on US exchanges and earn money from that. Investors will receive a portion of the fees short sellers are willing to pay to borrow the stocks.
The offer is aimed at the broker’s clients with account balance of $50,000 or more. Investors get half of the gross amount earned by the broker from lending the shares to borrowers. The proceeds are calculated on a daily basis.
“At Interactive Brokers we strive to offer clients ways to make and save money,” said Jean-Francois Bernier, Managing Director at Interactive Brokers Canada. “In contrast to the securities lending programs others offer, we provide complete transparency about the market rate and gross amount earned from each transaction,” he noted.
The program that was newly-launched in Canada is based on a model Interactive Brokers introduced in the US in 2011. Once traders enroll to Interactive Brokers’ Stock Yield Enhancement Program, the broker takes over all program activities. Investors are free to sell their stocks at any time and to continue to recognize profits or losses.
“Interactive Brokers uses its highly automated systems to identify the shares in client accounts which short sellers are attempting to borrow. The company credits loan income to clients and provides daily activity statements detailing the quantity of shares loaned, collateral amount, market fee rate, Interactive Brokers Canada charges and net fees,” the broker said in the statement.
Connecticut-based Interactive Brokers is a broker and a market maker. Through its numerous subsidiaries, the company offers online automated trading in stocks, options, futures, forex, bonds, contracts for difference (CFDs) and funds. It serves retail and institutional clients in over 120 market across the globe. The brokerage has offices in the North America, Europe, Australia, and Asia. The group companies hold licenses by the relevant authorities in the US and the UK.
Interactive Brokers Canada was set up in December 2000.