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Old 06-02-2021, 06:12 PM   #21
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I received my documents today and they only reference a single security that I own - ARKG. I take it to mean that ARKG is the only security of interest, but it's hard to know for sure. Also, it seems to me that it might be best to use securities in a Roth IRA in order to avoid taxes on the income. I haven't decided whether or not to submit the paperwork but might try it more or less just to see how it works.
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Old 06-02-2021, 06:53 PM   #22
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It does appear that additional tax consequences for lending vs receiving direct dividends are being (partially or more than fully, depending on marginal tax bracket) handled by Fidelity. The FAQ for the program states:



"To help offset the potential tax burden associated with the receipt of cash-in-lieu payments in place of qualified dividends (as defined in the Jobs and Growth Tax Relief Reconciliation Act of 2003), Fidelity will credit participating taxable accounts with an additional credit adjustment equal to 26.98% of the qualified portion of the distribution.3 This adjustment will occur annually after all reclassification information is made available. When factoring in credit adjustments, Fidelityís total cost for borrowing from taxable accounts over a record date will be greater than the cost of borrowing from tax indifferent lenders."
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Old 06-02-2021, 06:58 PM   #23
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Quote:
Originally Posted by misanman View Post
I received my documents today and they only reference a single security that I own - ARKG. I take it to mean that ARKG is the only security of interest, but it's hard to know for sure. Also, it seems to me that it might be best to use securities in a Roth IRA in order to avoid taxes on the income. I haven't decided whether or not to submit the paperwork but might try it more or less just to see how it works.

If you recall, or if you don't mind looking, which document were the securities of interest noted? I may have missed a section or perhaps don't hold anything that is relevant.



I received 3 documents: MSLA (master services lending agreement), proof of Fidelity counterparty collateral at various banks, and a fully paid lending FAQ.
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Old 06-02-2021, 07:27 PM   #24
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No trouble at all. I received the documents as email attachments. The body of the email contained the following text right after the introductory paragraph:

"Currently, the following positions and rates could apply (subject to change based on market conditions)

Symbol Rate
ARKG 2.125%"

I could conclude that someone (or some thing) looked at my holdings and identified ARKG as a security of interest. Are there others? Apparently not for me, but maybe that would change due to "market conditions".
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Old 06-02-2021, 07:37 PM   #25
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No trouble at all. I received the documents as email attachments. The body of the email contained the following text right after the introductory paragraph:

"Currently, the following positions and rates could apply (subject to change based on market conditions)

Symbol Rate
ARKG 2.125%"

I could conclude that someone (or some thing) looked at my holdings and identified ARKG as a security of interest. Are there others? Apparently not for me, but maybe that would change due to "market conditions".

Thank you !

Apparently my portfolio is too boring and bland, as there is no reference in the information e-mail on any lending interest. That's a shame, as any additional return within tax-advantaged accounts would be very much appreciated.
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Old 06-02-2021, 07:37 PM   #26
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Quote:
Originally Posted by misanman View Post
I received my documents today and they only reference a single security that I own - ARKG. I take it to mean that ARKG is the only security of interest, but it's hard to know for sure. Also, it seems to me that it might be best to use securities in a Roth IRA in order to avoid taxes on the income. I haven't decided whether or not to submit the paperwork but might try it more or less just to see how it works.
I am also thinking of participating in the program as a learning experience and to see how lucrative it might be.

The main point I wanted to know about is my risk and my downside. FAQ 5 on page 3 of the overview document states that the main risk is counterparty default. It states that the counterparty is Fidelity. So the question is - what is the likelihood that Fidelity will default on the program? My answer is - very low likelihood.

My wife is on board and we will probably try it. It can be terminated by me, or the "loan recalled" per the overview document.
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Old 06-03-2021, 04:59 PM   #27
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OP, i'm in the process of setting up our annual mtg w/ our Fidelity account advisor person and is on my list to ask. we also received the 3 pdf, but the body of the email didn't provide any securities as well. think our portfolio is also too boring, but who knows.

after the mtg I'll report any info as well since we are on the fence as well.

salud
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Old 06-03-2021, 08:33 PM   #28
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Thank you !

Apparently my portfolio is too boring and bland, as there is no reference in the information e-mail on any lending interest. That's a shame, as any additional return within tax-advantaged accounts would be very much appreciated.


Same here.
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Old 06-03-2021, 09:11 PM   #29
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Please don't get too excited. Window of Loan usually lasts few days. So the real interest will be a fraction of that 2.x% or.

Not saying don't sign up for it. Something is better than nothing. But don't think of this as a steady stream of income. This isn't.
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Old 06-04-2021, 04:38 AM   #30
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Just got my documents too. If I loan my RSP, the offer is 0.25%. Doesn't seem worth the trouble.
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Old 06-04-2021, 07:34 AM   #31
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I signed up the FPL program with Etrade for my IRA a few months ago. All of my ARKG shares in the account are on loan shortly after I signed up. The net yield I get is around 2%.

Another holding, IDNA, is currently partly on loan. The yield for IDNA is higher than ARKG. The net yield paid yesterday was 4.8%.

There is little interest in my other broad-market ETF holdings.
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Old 06-04-2021, 09:01 AM   #32
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@catotx Thanks for the feedback. The 2% ARKG and 4.8% IDNA yields - are you quoting annualized figures, or total return you received during the loan period?
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Old 06-04-2021, 11:53 AM   #33
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@catotx Thanks for the feedback. The 2% ARKG and 4.8% IDNA yields - are you quoting annualized figures, or total return you received during the loan period?
These are annualized numbers. For example, if you loan out $10k of ARKG, you will get approximately 10000*2%/360 = $0.56 a day.
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Old 06-08-2021, 11:04 AM   #34
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I completed the form today. Very simple. Since I did not get any info on which if any of my stocks qualify, I decided to hold the form and reach out to my free advisor at Fido. I donít know him too well so this a will be significant event to see how well we mesh.
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Old 06-08-2021, 05:46 PM   #35
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Getting 'something' is better than nothing. Most other brokerages lend out your shares and don't even give you a choice of getting any of the fees.

PS: No one should make any investing decisions based on 'lending returns', loading up on meme stocks for example, the return is minuscule compared to the extra risk.
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Old 06-08-2021, 06:31 PM   #36
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Getting 'something' is better than nothing. Most other brokerages lend out your shares and don't even give you a choice of getting any of the fees.
This what I always assumed.
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Old 06-08-2021, 08:09 PM   #37
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Most other brokerages lend out your shares and don't even give you a choice of getting any of the fees..
Only if the stocks are in a cash account and not a margin account. Hence the name Fully Paid Lending Program.

By definition, the stocks in an IRA account are fully paid.

I would say that most of everybody's non-IRA acccount are margin accounts, not because you intend to use margin, but because it is simpler.
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Old 06-10-2021, 07:40 AM   #38
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Schwab has a similar program which i have used several times. No issues.
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Old 06-10-2021, 09:27 PM   #39
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I was hesitant at first, but got offered it through eTrade and accepted with IRA money. Some days I was making close to $100. a day! Others .10 cents ... I have no idea how the internals work, but I view this as any other leverage situation, but with no risk to me (that I'm aware of).
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