The International Expansion of Fully Paid Securities Lending
Finadium
June 2025
The fully paid securities lending market has gone global with retail brokers, custodians, agent lenders and technology firms developing their offerings and expertise. At the same time, market participants must stay attuned to both written rules and anecdotal suggestions to remain competitive and compliant amid evolving regulatory guidelines. For firms looking to understand the details of how fully paid works today, this report is a primary source of information.
A bifurcation has emerged between established relationship-driven brokers offering a high touch service for high net worth and mass affluent customers, vs. brokers that provide a lighter touch and automated service to the mass market. Some firms in this second group are online while others are not; there is no one way to categorize how different types of brokerages approach fully paid.
The market is changing operationally as well. Client eligibility thresholds have crept lower, automation has increased and brokers are using fully paid as a client retention and sales tool. The level of client price transparency is also greater than ever, with some firms now supporting clients in shopping around for their lending rates the same way they would compare brokerage fees.
This report looks at current industry best practice in fully paid programs, from client communications to technology and operations. It is the result of conversations with broker-dealers, a review of current regulations and data collection from brokers with over $36 trillion in customer assets. In the US, it provides a breakdown of the fully paid opportunity across 19 leading brokerages.
This report should be read by securities lending professionals in both retail and institutional markets. Regulators may be interested to better understand how recent fines and directives have changed behavior and where greater clarity may be required.
Table of Contents
- Executive Summary
- Fully Paid as a Core Brokerage Offering
- – Methodology
- Economics and Fee Splits
- Technology, Operations and Client Communications
- – Client Education
- – Collateral Accounts
- Growing Regulatory Scrutiny
- – US Regulation
- – UK and European Regulation
- – Canadian Regulation
- US Broker Inventory and Potential
- – US Retail Brokers
- Best Practices and Industry Considerations
- About Finadium LLC