What is stock lending?

Stock lending, also known as securities lending, is a process where investors lend out their fully-paid stocks to other market participants and third-party financial institutions, who use the stocks to facilitate trade settlements and short-selling. In return, the lenders can earn extra income from the fees paid by the borrowers. The earnings can vary based on market demand and the specific stock being lent.

During the lending period, the borrower will receive the voting rights (the lender will lose voting rights whilst the shares are lent out), however, the lender will continue to receive a payment in lieu of any dividends and may choose to sell the shares at any time.