Securities loaned out by you may not be protected by SIPC
Borrowed securities are not held in your account and are not covered by the provisions of the Securities Investor Protection Act of 1970. Accordingly, the value of the collateral equivalent to the value of such securities may constitute the only source of satisfaction of our obligation to you in the event of a failure to return such securities.
Cash distributions paid on securities borrowed over the dividend record date are credited as a "cash-in-lieu" payment, which may have a different tax treatment than the actual dividend from the issuer.
When you loan your shares, you relinquish voting rights. However, if you want to vote your shares, you can recall your loan in advance of the record date.
Securities Loaned Out by You Are Typically Used to Facilitate Short Sales
The type of securities that are generally attractive to borrowers in the securities lending market, and which generate the highest loan fees, are “hard to borrow” securities. When you lend your Fully-Paid Securities, it is likely that such securities will be used to facilitate one or more short sales where the borrower is selling shares in hopes that the stock will decline in value (the short seller later repurchases the stock to pay back the stock loan). Since you are holding the shares “long” in your account, the activity of short sellers potentially could affect the long-term value of your holdings.