eToro Unlocks Stock Lending for European Retail Investors

eToro is launching a stock lending programme in partnership with BNY, which will serve as the custodian, and EquiLend, a leading stock lending platform, reports Finextra. This initiative marks a strategic move as eToro integrates BNY’s global clearing capabilities—spanning clearing, custody, settlement, execution, and financing—into its investment ecosystem.

The programme enables eligible users in the UK and Europe to earn passive income by lending out full-unit stock holdings. While contracts for difference (CFDs) and fractional shares are excluded, eligible stocks will be rounded down to the nearest whole share for lending purposes.

According to eToro, stocks that are illiquid, volatile, and in high demand have a higher chance of being borrowed and could potentially yield higher returns. All loans will be secured with collateral, and the collaboration with BNY and EquiLend ensures a scalable global model, offering access to over 19 exchanges worldwide.

Under this model, users who participate in the lending programme will temporarily transfer ownership of their stocks to borrowers and forfeit voting rights for the duration of the loan. However, they will continue receiving dividends, retain the option to sell, and can opt out of the programme at any time without penalty.

Initially, the programme will be available to members of the eToro Club, starting with Platinum-tier members. Gradual rollout to other tiers will follow. Once opted in, a user’s entire stock portfolio will be eligible for lending. Participants will receive monthly statements detailing earnings if their stocks are loaned out.