This doesn’t help.
Here’s a full breakdown of how the share-lending programs work at the main Canadian bank brokerages that do offer them, what you can expect to earn, what account types are eligible, and how it actually affects your shares:
?? 1.
TD Bank — TD Direct Investing (Stock Lending Income Program)
?? How it works
- You opt into the program via your TD Direct Investing account.
- TD makes your fully paid shares & ETFs available to be lent to borrowers.
- If they’re borrowed, you earn interest based on market demand and the value of the shares lent.
- Interest is calculated daily and paid monthly.
?? Earnings & revenue split
- You receive 50% of the interest paid by the borrower; TD keeps the other half as a fee.
- Example (hypothetical):
- $10,000 in lent shares
- 9% annual loan rate
- You earn roughly $25 over 20 days after TD’s 50% share.
?? Eligible accounts
- Cash accounts in CAD or USD only.
- Registered accounts like TFSA or RRSP are not eligible for this program.
(Online discussions also suggest registered accounts aren’t lent out by TD.)
?? What happens while shares are lent
- You keep ownership, but:
- Your voting rights transfer to the borrower during the loan.
- You receive “substitute payments” instead of regular dividends while lent.
- Loaned shares may not be covered by investor protection during the loan period.
?? Flexibility
- You can sell shares or opt out at any time; lending stops once the program withdraws them.
?? 2.
National Bank Direct Brokerage (Fully-Paid Securities Lending Program)
?? How it works
- After enrolling, eligible securities in your non-registered account can be lent when demand exists.
- National Bank handles matching, collateral, and reporting for you.
?? Earnings & revenue split
- You get 50% of the lending revenue (other half goes to the brokerage/agent).
- Revenue is based on market demand and fluctuates; daily and monthly reports show activity.
?? Eligible accounts
- Non-registered accounts (individual, joint, margin, cash).
- Registered accounts (TFSA/RRSP) usually cannot be enrolled for lending here.
?? What happens while shares are lent
- You still hold beneficial ownership and receive income tax slips for the revenue.
- Collateral is held at 102% by a third-party trust for protection.
?? Flexibility
- Sell or exclude specific stocks; you can leave the program anytime.
?? What You
Earn
- Earnings depend on market demand; harder-to-borrow stocks pay higher rates.
- Both TD and National Bank split revenue roughly 50/50 with you.
- Monthly payments reflect days shares were actually lent.
?? Which Accounts Can Participate?
Brokerage
| Non-Registered
| TFSA
| RRSP
| Margin
| TD Direct Investing
| ? Yes (cash accounts)
| ? No
| ? No
| ? Only cash eligible
| National Bank Direct Brokerage
| ? Yes
| ? No
| ? No
| ?? Margin eligible if fully paid?
| Note: Registered accounts typically cannot be enrolled in these programs in Canadian bank brokerages — although some non-bank brokers (e.g., Questrade) may offer lending in registered accounts.
?? Things to Know Before You Enroll
?? Risks & trade-offs
- Voting rights transfer to the borrower while shares are lent.
- Dividends may be received as substitute payments (taxed differently).
- Collateral protects lenders, but there’s a small risk tied to market conditions & counterparty arrangements.
?? You remain in control
- You can sell shares any time — the lending stops as they’re removed from the program.
?? Tax implications
- Lending income is taxable and reported (e.g., on T5 slips).
?? Quick Summary
- TD Direct Investing – stock lending program; eligible in cash accounts; 50/50 revenue split; good for earning passive income.
- National Bank Direct Brokerage – fully paid securities lending; non-registered accounts; 50/50 revenue split; collateralized.
- Registered accounts (TFSA/RRSP) typically not eligible at Canadian banks.
- Earnings higher for stocks in more demand; not guaranteed.
If you want, I can tell you which individual stocks or ETFs tend to have the highest lending income or how to compare these bank programs to non-bank brokers (like Questrade)! |
