Enhanced Benefits Increasing Your Account Balance

April 5, 2023
Originally published FEBRUARY 5, 2023

Fidelity Investments has invited Curran to participate in its Fully Paid Lending Program, Fidelity’s branded securities lending service. Securities lending is the practice of lending stock shares, ETF (exchange traded fund) shares or other securities. The borrower pays a fee and interest to the lender in exchange for the shares. The owner remains free to sell the shares and at the going market price.

Let's examine Fidelity’s Fully Paid Lending Program

Fidelity may borrow securities from your account. In return the accountholder receives collateral held at a bank independent from Fidelity. In addition, one receives an interest rate-based lending fee based on the loan rate multiplied by the market value of the securities on loan. The lending fee accrues daily and is automatically credited on a monthly basis to your Fidelity account. The interest rates paid are based on the supply and demand of the individual securities in the securities-lending market and are subject to change based upon market conditions and borrowing demand.

For instance, a difficult security to borrow will earn a higher rate of interest than an easy to borrow listing. The duration of the loan is typically indefinite, and the loan may remain open until either the investor or Fidelity elects to close it. The existence of the loan does not restrict one from selling the securities at any time. The sale of the lent shares serves as a notice to terminate the loan.

Program Guidelines

  • Execute a Master Securities Lending Agreement (MLSA) with Fidelity. The MLSA governs the loan transactions and gives Fidelity the right to borrow shares from your account.
  • Only securities that have been fully paid or that are in excess of margin debits are eligible.
  • Our clients maintain full economic ownership of the securities on loan and the securities can be sold or the loan recalled at any time.
  • In the event of a default by Fidelity, the investor has the right to withdraw the collateral from the custodial bank.
  • Fidelity is not obligated to borrow securities, and enrollment in the program does not guarantee your securities will be borrowed.
  • Loaned securities do not qualify for SIPC (securities investor protection act) coverage.

Frequently Asked Questions

How does the securities lending agreement affect my ownership of the securities while out on loan?

  • Under the terms of the MSLA, the investor maintains full economic ownership of the securities on loan. At any time the investor may recall the loan or sell the securities.
  • Under the lending agreement we relinquish our ability to exercise voting rights. If you wish Curran to act on an upcoming proxy vote, the loan can be recalled. Fidelity will make a best effort to return the securities prior to the record date of the proxy.

How can I monitor my securities on loan?

  • Securities on loan appear online and your statements in the same manner as the rest of the securities in your portfolio. All loaned securities will be reflected among your positions and continue to contribute to your total account value.
  • Details of your loaned securities will be reflected on a separate “Loaned Securities” page. This page details the quantity, market value, and interest rate for each loaned position as well as the collateral provided.
  • In addition, confirmations on lending activity are sent to reflect new loans, rate changes and collateral adjustments.

What assets are eligible for collateral?

  • Fidelity provides the lender with collateral held at a third-party custodial bank. Collateral is held in cash or cash equivalent form. These include US Treasury bills and notes and CDs (certificates of deposit).

What are the risks associated with lending securities?

  • There is a risk, although remote, that Fidelity could default on its obligations and further securities on loan are not covered by SIPC, the Securities Investor Protection Act of 1970.
  • To protect you the investor, we would exercise our right to withdraw the collateral from the custodian bank. When a withdrawal request is made, the bank will transfer an amount equal to the current collateral amount to a financial institution as specified in the delivery instructions.

Will I receive cash dividends while securities are on loan?

  • Investors do not receive cash dividends but rather “cash-in-lieu” payments in the event shares are borrowed over a dividend record date.
  • Cash-in-lieu payments may have different taxable consequences than receiving dividends. In order to mitigate the tax impact, Fidelity may return shares prior to the dividend record date
  • To help offset the potential tax burden associated with cash-in-lieu payments in place of qualified dividends, Fidelity will credit participating taxable accounts with an additional credit adjustment equal to 26.98% of the qualified portion of the distribution. The adjustment will occur annually.

Our thoughts

Curran’s Investment Committee has evaluated the program and feels strongly in recommending participation to our clients. Assessing Fidelity’s Fully Paid Lending Program, it is our view, the program offers a low-risk way to increase your account value by lending in demand securities. To participate is voluntary. If you are interested or have questions, please call your Wealth Manager to discuss.


Kevin T. Curran, Co-CEO & Chief Investment Officer

Our Financial Planning Process

At Curran we value service over sales and believe quality service yields happy clients. Below is our 4-step process (the first three steps at no cost to you).

Engage & Discover

A short introductory call for us to get to know one other. During this call we will discuss your financial goals, concerns and hopes for the future.

Goals & Data Gathering

In this meeting we will go over your current financial situation, take a deeper look at your goals, discuss your risk tolerances, and collect the data necessary to build a formal proposal.

Proposal & Evaluate

Based on our data gathering session, our Private Wealth Managers will present you with a custom proposal tailored to your needs. We encourage individuals to take the time to evaluate this proposal.


If you are comfortable with the proposal and choose to invest with Curran, our team will be there every step of the way assisting in opening the recommended accounts and facilitating all necessary parts of your onboarding process.