Abu Dhabi, UAE : Trading and investing platform eToro announces today that it has launched its stock lending programme in the UAE, enabling local users to earn passive income by lending out their stocks.
“Expanding stock lending to the UAE reflects our commitment to providing our users with more ways to earn passive income. Local retail investors can now participate in a practice that was previously only available to institutions, helping them make their investments work harder,” said George Naddaf, Managing Director at eToro MENA.
Eligible eToro users can opt into the programme, at which point their entire portfolio of stock positions will be considered for lending. Participants will receive monthly payments equivalent to 50% of the net revenue that eToro earns and receives from our partners for these lending transactions. Once opted in, users will receive monthly statements detailing any income they have earned via stock lending.
Only whole-unit stock positions are eligible for lending, meaning that CFDs and fractional shares are excluded. Eligible shares will be rounded down to the nearest whole share. Stocks with low market liquidity, high volatility and high demand are more likely to be borrowed and generate higher earnings. To mitigate risk, the loan will be backed by collateral exceeding the value of the securities lent, in the form of cash or high-quality liquid assets.
eToro users who lend their stock temporarily give ownership of the stocks to the borrower and lose voting rights while the stock is on loan. However, they can still receive dividends, sell the stocks or opt out of the programme at any time at no cost.
Notes to editors
To help users better understand the programme, users can find out how much income they could potentially earn as well as the associated risks from lending their stocks on the homepage when they log onto the platform.