Share lending - does Freetrade doing it?

As a way of generating revenue, in addition to CFD’s, Trading212 partakes in share lending, loaning out all investors shares and keeping and profits made.

Does Freetrade do this! I’d be interested to know given shares are held in a custodian account, rather than individual investor names.

Nope, they are not.

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212 do not hold shares in individual investors names, just for clarification. Almost no one does unless you have paper shares.

Thanks, that is my understanding. I know Freetrade also don’t hold shares in individual names, but wasn’t sure if they loaned shares out.

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For what it’s worth I think Stock Lending is an entirely plausible business opportunity FT could take. The risks are minimal and the admin is not entirely onerous. You could go the eSec or Sharegain route or, even easier since FT run their own Euroclear account, take the 50/50 profit split with the auto lending option in your Crest account. You don’t even have to directly manage the collateral these days! You just need to make sure your records and your back office can handle the additional transactions that take place and reconcile them. You can’t lend ISA holdings but GIA can. Interest on even liquid stocks is weirdly more than you’d think. You’ll know when/if FT do anything in this area as they have to get explicit investor but in via a T&C update. I don’t think FT will do it but equally wouldn’t be surprised if they did. Sharing profits with the lending investor would mitigate a lot of people’s natural reluctance!


Do you by any chance know what’s the average % income on share lending?

Any average would be wildly misleading

But by way of singular, basic , generic examples I recently got quoted sub 1% on an LSE liquid stock (ugh! Whatever) but 5% on a less liquid AIM holding.

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You need to factor in the usual 50/50 fee split with your provider and the very murky transactional fees FT would incur by queuing up so many loan/return messages in Crest.

:hot_face: I once miscalculated my Crest costs at a startup broker I used to work for and my Crest monthly transactional messages bill came in about £10k higher than I forecast… it was awkward! :grimacing:

Basically, there’s many costs you have to factor en route. The implicit and therefore unquantifiable operational costs are also important to control.


If it looks so good do you have a guess why FT does not do it?


Growing number of assets (US) not in Crest (as held via DriveWealth). If/when DW offer lending split with clients - game changer.

Most newbie investors open ISAs - so assets can’t be lent

Ops cost, ops control, ops risk (you should see the dividend message flow from loaned assets! Gulp!)

T&C update

Usual knee jerk reaction from those who question the legalities and safety of such programs

Pretty much amounts to - It’s probably not worth it for FT currently. But it must have been discussed and it must be a future consideration even if years away.

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