Stock Yield Enhancement Program

You can elect to grant authority to IBKR-Australia to enter into Stock Yield Enhancement Program ("SYEP") Derivatives to earn extra income in your account. You will need to agree to lend IBKR-Australia your shares and in exchange IBKR-Australia will deposit cash collateral into your account and pay you a return that is broadly equivalent to the revenue that may be earned were IBKR-Australia to on-lend the shares, less IBKR-Australia’s fees.¹ IBKR-Australia’s fees will be 50% of the revenue that could have been earned if your shares were onward lent (unless otherwise agreed by you explicitly in writing). Granting authority to IBKR-Australia to enter into Stock Yield Enhancement Program Derivatives does not limit your ability to sell your shares whenever you like and you may rescind this authority whenever you like.

• Simple and Automatic

  Once you grant IBKR-Australia authority to enter into SYEP Derivatives, IBKR-Australia manages everything from there. Once you enroll, IBKR-Australia will examine your stock portfolio automatically. IBKR-Australia may then decide to enter into a SYEP Derivative and borrow your eligible securities, and in return, IBKR-Australia will deposit cash collateral in your account and pay you a fee. This fee will be reflected as interest in your account.

• Complete Transparency

  When your stock is on loan to IBKR-Australia in connection with a SYEP Derivative, you will see the rate that you are being paid on the collateral value along with the fee paid to IBKR-Australia for its services. Other brokers with similar programs generally do not disclose the market rates to you, which allows them to pay you a small piece of the pie while holding on to most of the profits.

Shares loaned out are typically used to facilitate short sales.

As you are holding the shares “long” in your account, where IBKR-Australia elects to on-lend your borrowed securities in connection with a SYEP Derivative, those securities may be utilized for the purpose of short selling, which may potentially affect the value of your holdings.

Market rates change frequently.

Loan rates in the securities lending market (and therefore the payment that you may receive) are subject to frequent change and can go up or down significantly. Rates for “hard-to-borrow”, and other securities, change frequently and often daily in the securities lending market. This can reduce (or increase) the payment IBKR-Australia agrees to make to you as consideration for entering into a particular SYEP Derivative.