Freetrade going to loan out share in their news T&C9 Mar 2022 12:42
From June 22.
We’re updating our terms and conditions for all Freetrade customers. We’ve included the most important information in this email.
Summary of the main changes
We’ve added a new section on securities lending, a new revenue stream for us that will allow us to keep our fees low and support further improvements to our product and services as we scale. We only lend securities held in a GIA or a SIPP. Securities held in an ISA will not be lent out.
You will receive a push notification to review and accept these terms. We request your acceptance by 1 June 2022 if you wish to continue using your Freetrade account(s).
We’re also adding an additional foreign exchange provider and have updated our terms to reflect this.
More on securities lending
What can Freetrade lend?
By agreeing to these new terms, we can lend any shares held in a GIA or a SIPP. Shares held in ISAs will not be lent out.
To begin with, we will only be lending UK-listed shares. We will look to expand this in the future so that we can also lend out shares listed in Europe and the US.
Will anything change?
These changes will have little impact on how you use the app.
If your shares are on loan and there’s a corporate action that we support, we will recall your shares before the record date so that you’re able to participate.
You will still receive dividends and be able to buy or sell securities as normal. However, you may notice a new section about shares on loan in your monthly statement.
How am I protected?
When your shares are lent, we arrange for high quality assets (like government bonds and cash) to be held as collateral on your behalf that are greater in value than the shares on loan.
What are the risks?
As with any financial transaction, there are risks, but we also take steps to manage these.
If for any reason the borrower can’t return the shares, Freetrade will be holding the collateral on your behalf. In this case, we would sell the collateral and take all reasonable measures to return the shares to you.
We also monitor the value of your shares and the collateral on a daily basis and require the borrower to provide additional collateral where necessary.
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