Securities Income Program
Take a closer look at the Securities Income Program.
A chance to earn extra income on the shares you already own.
What is the Securities Income Program?
In short, this program is securities lending. That means you give us the right to borrow certain in-demand stocks for a short-term purpose to loan out to other investors, and in exchange, we’ll pay you interest. It’s the potential for extra cash with minimal effort.
We’ll do the work
All you need to do is consent to enroll, and once you’re eligible, we’ll see if any of your securities are in demand. If so, they’ll be automatically lent out in exchange for interest.
Sit back and earn.
We’ll deposit any of the daily interest your shares make to your account in the middle of each month. This is in addition to the value of any dividends earned.
Sell anytime, no restrictions.
While enrolled in this program, you maintain full ownership of the securities on loan at all times. If you decide to sell, we’ll simply end the borrowing agreement for that particular stock.
No long-term commitment.
If you wish to stop participating in the program, you’re able to unenroll at any point in time with no penalties.
The details.
Take a step-by-step look at how the program works.
First, give us your consent to enroll. We’ll auto-enroll you the moment you become eligible.
We’ll identify your in-demand securities and loan those out to other investors. While they’re borrowed, they’ll accrue a daily interest.
You’ll see borrowed shares and earned interest in your account activity in the middle of each month and in your end-of-month account statement. You’ll also see the value of any dividends as they’re earned.
Even if we’re borrowing your shares, sell as normal, no restrictions. We’ll simply end the borrowing agreement for shares you choose to sell.
What you should know.
While this program is generally hassle-free, and entirely fee-free, there are a few things to keep in mind.
Borrowed Shares
Enrollment doesn’t guarantee that your shares will be borrowed. Typically, securities that do get borrowed are in high demand or limited supply.
Dividends
When we borrow your security, we must provide collateral for the loan in the form of the security’s cash value — this gives protection to the trader. Because of this, for shares that do get borrowed, you’ll receive cash instead of your regular dividend payment for the duration of the loan. This may be taxed differently. Talk to your tax advisor if you have concerns.
Proxy Voting Rights
You give up proxy voting rights while your security is on loan. Though this won’t be of concern to most investors, it may be of greater concern if you’re a larger institutional investor.
How to enroll
If you already have an Ally Invest Self-Directed account, visit Securities Income Program and select Consent to Enroll to get started.
If you’re new to self-directed trading, first learn more, then when you’re ready, open an account. You’ll choose Consent to Enroll in step 2 of your application.
FAQs
We have answers
While they aren’t all risks, there are a couple things worth understanding about the program before signing up.
Enrolling in the program, doesn’t guarantee your securities will be borrowed. Typically, the securities that are borrowed are those that are harder to borrow due to a high demand and limited supply.
You relinquish voting rights on your securities while they’re on loan. This is something to consider if you own a significant percentage of a company or like to participate in proxy voting.
You’ll receive a substitute payment of cash instead of your regular dividend payment if your security is on loan. This may result in a higher tax consequence for that security because dividend income is taxed at a different rate. We recommend talking to a tax professional if you still have questions.
Yes. You still own your shares, so you can sell them at any time. Selling your shares while they’re being borrowed terminates the loan, and you’ll no longer earn interest off that share.
You can unenroll from the Securities Income Program anytime by calling us at 1-855-880-2559.
To be a part of the program, you need to have a cash, non-margin account with at least 1 of the following:
A new worth of at least $100,000
An account value greater than $50,000
An annual income greater than $50,000
More than 5 years trading experience of any kind
Once every 3 years, we’ll send you a request to update your information. Or, to update sooner, call us any time.
Even if you don’t meet those requirements today, by consenting to participate upon eligibility we can auto-enroll you in the program as soon as you do.
Still have questions? Visit our Help Center.
Income from loans are taxed at an ordinary income rate and do not qualify for capital gain rates.
Ally Invest Securities, LLC, Securities Income Program (SIP) is facilitated by Apex Clearing under the Fully-Paid Securities Lending (FPSL) agreement which can be reviewed here.
Full Risk Disclosures with respect to fully paid or excess margin securities lending transactions available here.