In this article:
Overview
Stock lending lets you earn passive income on the stocks and ETFs you already own. We loan your eligible holdings to other institutions, and any earnings are split 50/50 between you and Wealthsimple. You stay the owner throughout — you can still withdraw, change your risk level, and rebalance at any time.
Stock lending is available in both Wealthsimple Trade and managed accounts.
Eligible accounts
Stock lending is available in most Wealthsimple accounts, including registered accounts (RRSPs, TFSAs, and FHSAs). The following accounts aren't eligible:
- Halal portfolios
- Alternative investment (Private Market Fund, Private Credit, Private Equity) accounts
- The Private Market portion of Summit portfolios
- Wealthsimple for Business (group) accounts
How enrollment works
If you already have stock lending enabled in a Trade account, your eligible managed accounts may be automatically enrolled. This happens when all three of the following are true:
- You've signed the stock lending agreement (the same one used for Trade accounts)
- You currently have stock lending enabled on at least one Trade account
- A portfolio manager has reviewed your managed account and confirmed it's suitable for stock lending
If your managed account is automatically enrolled, you'll receive a confirmation email. It includes an explanation of stock lending, an FAQ for clients who don't remember signing up, and instructions for opting out.
Start participating in stock lending
To enable stock lending:
- Log in to the Wealthsimple app
- Tap the Move tab at the bottom of the screen
- Under Automations, tap Stock lending
- Follow the prompts to learn about stock lending
- Review and sign the agreement
- Tap Confirm to enable stock lending
- Choose which account(s) you'd like to enable stock lending in
Your Trade accounts will be enabled immediately. Your managed accounts will be sent to a portfolio manager for a suitability review, which takes 1 to 3 business days. You'll hear back once a decision has been made.
Toggle stock lending on or off
After enabling stock lending, you can toggle which accounts to opt out of or back in to stock lending. You'll need to disable stock lending separately for each account. Turning it off for one account doesn't affect your other accounts:
- Log in to the Wealthsimple app
- Tap the Move tab
- Under Automations, tap Stock lending
- Toggle which account(s) you want to opt out of or back in to
- Log in to your Wealthsimple profile
- Select your desired trading account
- Select the Settings (gear) icon in the top right-hand corner of the screen and select Account settings
- Toggle off or back on Stock lending
View your loan confirmations
We provide loan confirmations for each of your eligible shares that've been loaned through stock lending. To view your loan confirmations:
- Log in to the Wealthsimple app
- From the Home tab, tap the Profile icon in the top right corner
- Tap the Settings (gear) icon
- Tap Automations
- Choose Stock lending from the options
- Tap View details on the account(s) you're interested in
- Select the date(s) you want to view
- Select View lending confirmation
What's available in your loan confirmations
The loan rate in your confirmation is calculated using a weighted average rate for each loan type (high demand loan or low demand loan) at the security and currency level.
Here's an example of how this aggregation works:
ABC shares loaned out at varying rates:
| Trade ID | Asset | Trade Type | Quantity | Rate |
|---|---|---|---|---|
| 1 | ABC | Low Demand | 100 | -5% |
| 2 | ABC | Low Demand | 80 | -4% |
| 3 | ABC | Low Demand | 50 | -1.50% |
| 4 | ABC | High Demand | 200 | 10% |
| 5 | ABC | High Demand | 200 | 5% |
What you'll see in the loan confirmation:
| Asset | Trade Type | Quantity | Weighted Rate |
|---|---|---|---|
| ABC | Low Demand | 230 | -3.89% |
| ABC | High Demand | 400 | 7.50% |
Why you may see 0% rebates on some loans
Sometimes, we lend your shares in a special way where we pay a fee to the borrower. This typically happens when interest rates are high, and the interest we earn on the cash collateral is more than the fee we pay. We choose this approach when there are no loans available where the borrower would pay us a fee, and when the interest we earn exceeds what we pay to borrow your shares.
In these situations, your shares are loaned out, and you receive a portion of the interest income we earn. You don't pay any fees in this process. When this type of lending occurs, you'll see these loans reflected on your loan confirmations with a loan rate of 0%.
Frequently asked questions
Do I still own my holdings while they're on loan?
Yes. You keep full ownership of your holdings at all times. While shares are on loan, you can still withdraw funds, change your risk level, and rebalance your portfolio. Nothing about your account management changes.
How much can I earn from stock lending?
Earnings depend on supply and demand for your specific holdings. Stocks that are in high demand will generally earn more. ETFs can also be lent out, though returns are typically lower than for individual stocks. Earnings are split 50/50 between you and Wealthsimple — there's no fee to participate.
Will stock lending affect my dividends?
In most cases, no. If a dividend-paying holding is on loan over the dividend record date, you'll receive a manufactured payment from Wealthsimple equal to the dividend amount, paid on the same date.
If you're a U.S. person, there may be different tax implications for U.S. dividend-paying securities on loan. We recommend speaking with a U.S. tax professional for guidance.
Does stock lending affect my taxes?
Earnings from stock lending in non-registered accounts are treated as regular investment income (similar to interest income). In registered accounts (RRSPs, TFSAs, and FHSAs), earnings are tax-free.
What are the risks of stock lending?
The main risk is that loaned shares could theoretically not be returned. To protect against this, Wealthsimple holds cash collateral equal to 100% of the value of your loaned shares. Note that loaned shares aren't covered by CIPF. While shares are on loan, you also forfeit shareholder voting rights for those shares.
I received an email saying my managed account is enrolled. I don't remember signing up — what happened?
When you opened your Wealthsimple account or joined the stock lending program, you signed an agreement covering all eligible accounts. Stock lending has been expanded to managed accounts. If you already had it enabled in a Trade account and a portfolio manager confirmed your managed account is suitable, it was automatically enabled. You can opt out at any time by following these steps.
If I turn off stock lending on my Trade account, does that also turn it off for my managed account?
No. Stock lending settings are managed independently for each account. To disable it, follow these steps. Repeat this for each account individually.
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