Securities lending is a common practice in the investment industry where brokerage firms temporarily loan out stocks, bonds, or ETFs from client portfolios to other investors. The borrowers pay interest and provide collateral for these loans, creating an additional revenue stream for the brokerage firm.
When your shares are loaned out, you actually lose temporary ownership of them. This means more than just being unable to sell those specific shares - it also affects your shareholder rights. For example, you can't participate in company votes with loaned shares because voting rights transfer with ownership. Sometimes institutional investors even borrow shares specifically to influence important votes, or the shares end up in the hands of someone who purchased them through a short sale.
Illuminate does not participate in securities lending. Your shares remain fully in your control, with all associated ownership rights intact.