Series 28: Lender’s Privileges And Rights Of Shorted Stock

Lender’s Privileges and Rights of Shorted Stock

Those who lend their stock to short sellers receive a commission for the service they provide, and they earn interest on the collateral sitting in their margin account. They also retain the following privileges:

• • Lenders have the right to cash dividends on the loaned stock—not from the issuing company, because the lender is not the owner of record, but from the short seller. By contract, short sellers are obligated to