To allow investors to earn incremental revenue on securities that would otherwise remain idle in the client's account.
Our Fully Paid Lending Program
Help your clients effortlessly earn extra income on their securities
What is the Fully Paid Lending Program?
This Program allows eligible clients to earn additional income by lending their fully paid securities held in their non-registered accounts, in return for a fee.
The Fully Paid Lending Program (FPL) has been used for years by institutional players. Now, it’s finally available to individual investors.
Why your clients will love the FPL Program
Potential to earn extra revenue
Lending securities can help your clients earn passive income. The revenue is then deposited directly into their accounts.
Peace of mind
This program is a simple way for clients to earn more with no cost and no obligation.
Option to sell
Even when securities are on loan, clients can sell them anytime, and they have the option to exclude any securities they don’t want loaned.
How does the Program work?
Step #1: Enroll your clients
Enroll your clients by completing the account enrollment documents available below and submitting them to your service team contact.
Step #2: Let us do all the work
After enrollment, you can assure your clients that no further action is required. National Bank Financial will handle all the technicalities to loan out the securities.
Step #3: View the results
Clients will receive daily and monthly reports, ensuring full visibility on securities lending transactions and revenue earned on their securities.
Unlock untapped potential
The FPL Program allows you to unlock a new source of revenue for your clients at no extra cost. This offers the opportunity to improve the performance of their portfolios while diversifying your client's product offering.
Maximize your clients’ portfolios
- Add passive, incremental revenue
- Reduced trading costs
- Create real value for your clients with passive assets
Lending advantages
- Diversify your clients’ portfolios
- Potential protection from market fluctuations
- Capitalize on sectors with active trading
Looking for more information about the FPL Program?
Discover the Fully Paid Lending Program
Watch our video to learn how the Program could help your clients earn more.
1m 46s Transcript
Calculate your clients’ returns
Here's how your client’s potential income with the FPL Program will be calculated. Please note that rates can vary depending on the market situation throughout the loan.
| Shares on loan | 10,000 |
|---|---|
| Market price | $10 |
| Market value | $100,000 |
| Annualized lending interest rates | 8.5% |
Daily accrual ($100,000 x 8.5% /360 days) |
$23.61 |
| Your client’s hypothetical monthly income | $708.30 |
For illustrative purposes only. Past performance is not a guarantee of future results.
The calculation is based on a 365-day calendar year for Canadian securities and 360 days for U.S. securities.
Important considerations
Market fluctuations
Once enrolled, client accounts will be awarded loans based on market supply and demand for their securities.
Fully collateralized
All loans are fully collateralized at 102% with Government of Canada guaranteed bonds.
Dividends
Clients retain full beneficial ownership of their securities and continue to be entitled to receive dividends on their loaned securities.
Voting rights
The client will lose their voting rights for as long as their security is loaned. Clients who wish to vote on their securities can request to have their securities returned to exercise voting rights.
Frequently Asked Questions
During the course of a typical trading day, brokers lend or borrow securities to and from investors for a variety of purposes. The loaned securities will mainly be used for financing activities, such as cash management and collateral exchange. They can also be used for purposes such as short selling, hedging strategies or taking advantage of arbitrage opportunities.
Clients whose Introducing Broker or Portfolio Management firm is enrolled in Natcan Trust Company (NTC)’s Fully Paid Securities Lending (FPL) Program can enroll by completing and signing the forms below.
If you are an introducing broker:
Fully Paid Securities Lending Package for retail clients
Account form request - Fully Paid Securities Lending (FPL) Lending program for retail clients
If you are an investment manager:
Fully Paid Securities Lending Package for retail clients
Account form request - Fully Paid Securities Lending (FPL) Lending program for retail clients
Participation in the FPL Program does not guarantee that an investor’s securities will be lent.
The key factor in determining whether a security will be lent is the availability of the security in the market relative to the demand to borrow that security. Market conditions are therefore among the factors that determine which securities will be lent. Note that certain securities can be excluded upon request.
When the securities are lent, daily and monthly reports indicating the names of the loaned securities, the number of securities lent, and the lending revenue will be sent. The same will apply when securities are returned or when loan rates change. Your clients will be able to monitor all activities on their loaned securities, which will remain visible in their online client portal.
The FPL Program is restricted to securities from issuers listed on a Canadian or U.S. stock exchange (including exchange-traded funds (ETFs)). Securities listed on an exchange in Canada that meet at least one of the following criteria can be included in the program:
6-month average volume weighted average price (VWAP) ≥ $2.00
6-month average daily trading volume ≥ 100,000 shares
6-month average free float market capitalization ≥ $200 million
Natcan agent lender verifies and assures that only eligible securities are lent.
Clients may withdraw from the program at any time by informing NBIN in writing at least 15 business days before their intended date of withdrawal. Upon receiving their notice, Natcan Trust Company will begin the process of recalling their loaned securities. Remember that the clients maintain full economic ownership of securities out on loan and may sell them at any time.
Yes, they will continue to receive dividends, and they will be paid as regular cash dividends in your trading account.
Yes, even if securities are loaned out, it is possible to participate in a DRIP. The securities will be automatically recalled and restricted a few days before the record date and become available to lend after the payment date.
Clients retain all voting rights until the securities are lent. To exercise voting rights, clients may recall loaned securities in accordance with the Securities Lending Agency Agreement at least 10 business days prior to the applicable record date.
Little details that matter
Hi, I'm Mike Tocheri, Senior Vice President and Managing Director at National Bank Independent Network.
I'd like to share with you an opportunity for your clients to earn additional returns on securities that are otherwise passive with no obligation and little to no additional effort or risk.
Sounds like a win-win, right? NBIN's fully paid lending Program can put your clients' non-managed portfolios to work with full peace of mind.
This is an opportunity your clients won't want to miss.
Securities lending Is not a new concept in fact it is already a multi-trillion-dollar market, and investment vehicles like mutual funds and ETFs have been lending their Securities for years and it's time you got your clients a piece of this pie.
Here's how it works: imagine your clients own a property they're not using rather than letting it sit empty they could rent it out to earn passive income on top of their equity.
Fully Paid Securities lending is much the same. The market is always moving based on supply and demand, so once your clients are enrolled in fully paid lending their Securities become available to Borrowers and once borrowed your clients receive 50 percent of the revenue earned on those loan Securities.
While always retaining beneficial ownership of all the assets, your client still receives interest in dividends on their securities, so nothing changes, in fact, enrollment and fully paid lending is free and comes with no obligation to you or your clients. There are no minimums, no penalties and your client can sell their assets or unenroll from the Program at any time.
So, what makes this Program so unique? It's the only one in Canada run by a bank meaning, that your clients have peace of mind knowing their assets are fully protected and because our fully paid lending Program only requires your client to loan their Securities to National Bank Financial. They'll have no direct Market exposure, and their assets continue to be protected at the same time all assets on loan are fully collateralized at 102% of their value, adding yet another layer of protection.
Your clients also have complete visibility of which Securities are on loan and the revenue they have earned so there you have it this is an opportunity to really differentiate yourself and your business a win-win for everyone.
If I could leave you with just one thing it's this the market moves fast, and your client needs to be enrolled in the Program in order to take advantage of these opportunities when they arise to learn more about our fully paid Securities lending Program at NBIN I encourage you to reach out to your regional vice president.
The information set out on this webpage (including any videos) is provided for information purposes only. It in no way replaces the client documentation and does not constitute a recommendation to enroll in the Fully Paid Securities Lending Program. The client must read the client documentation in its entirety (including, but not limited to, the Fully Paid Securities Lending Package, the FPL Account Request Form, the Securities Lending Agency Agreement and the Global Master Securities Lending Agreement (GMSLA)) to obtain the information they need regarding the risks and features of the Fully-Paid Securities Lending Program.
