Through this move, eToro aims to work with BNY, which is set to act as a custodian, and EquiLend, which will identify borrowers and support the stock lending process, to enable its UK and European users to earn passive income by lending out their stocks. Initially, eToro plans to introduce the capability gradually to members of the eToro Club, beginning with Platinum, Platinum+, and Diamond Club members. Following this, the company intends to roll out the stock lending programme for lower-tier Club members.
Furthermore, eligible users are set to benefit from the option to opt into the programme, enabling their portfolio of stock positions to be considered for lending. After opting in, they can start receiving monthly statements if their stock is lent to manage the income they earned in the particular period. Additionally, eToro underlined that only whole-unit real stock positions are eligible for lending, which means that CFDs and fractional shares are not included. Stocks with low market liquidity, increased volatility, and scaled demand are more likely to be borrowed and generate higher earnings, with loaned-out stocks being supported by collateral.
By rolling out this stock lending programme, eToro seeks to expand its clearing relationship with BNY, with the company leveraging the latter’s Global Clearing platform, providing integrated solutions across the US and international clearing, custody, settlement, execution, and financing. Via a jointly developed value proposition, the two companies created a scalable global operating model allowing eToro’s clients to access approximately 19 exchanges globally.
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