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Out of curiosity, I went to https://www.fidelity.com/trading/fully-paid-lending and answered the 4 extremely easy eligibility questions. I was told I was eligible, and an information email with several forms attached was sent automatically later. Unlike the 4 questions, there appeared to be absolutely no effort to make the process or forms intelligible. It's stated that the MSLA and Collateral Appointment Letters have to be signed and returned. So I have three basic questions, for anyone already enrolled in this program, before digging further:

1) Does income associated with lending out shares in each account stay in that account? I have 2 IRA accounts and a taxable account. I need to avoid large amounts of forced income due to Obamacare cliffs. Does income from lending out shares in the IRA accounts stay in those accounts (thus no forced income)? If so, I could simply avoid enrolling the taxable account.

2) Once signed up, is it possible to enable/disable lending in each account simply by logging into my account? Or is paperwork involved each time?

3) One of the attached forms is the "Collateral Administration Agreement", which the email states needs to be signed and returned. However, on every page of the 38-page document itself, it says "No Signature Required". So which is it?

P.S. I tried searching this forum on this topic before posting, but apparently it's impossible to search for an exact phrase (i.e., "fully paid lending"), so no useful search results. Quotes around a phrase are ignored.

I called them and was told that 1) income from lending shares in each account stays in that account, so only the taxable account would result in forced income, 2) enabling/disabling lending in each account must be done with a phone call or email, 3) the CAA is only for informational purposes since the MSLA refers to it, and that actually only the MSLA needs to be signed and returned, which I've just done. Hopefully in a week or so I should learn whether all of that is correct.

IB has a similar program, but I’ve never earned a penny. Would be interesting to see what your experience is. My hunch is that people don’t short index funds and activists who want the voting rights don’t find index funds useful in any case.

I signed up on July 2, but have not seen any lending activity or received a statement. I was hoping to receive a statement every month showing which accounts are enrolled, even if there was no lending. Apparently it only happens if there is lending. I was told by email that my taxable account is unenrolled. I own a sector index fund (XBI), not a broad market fund, which is probably more likely to be shorted.

Today, for the first time, I have lending for both of my retirement accounts (the only ones where I authorized it). On my Account Positions page, under each account, to the right of the ticker symbol, there is a green square with an "L" inside. Clicking on the green square pops up a window showing that in each case, the number of loaned shares is the entire whole share part of my holdings (but not the fractional part). The interest rate is 0.25%.

Edit: Interest rate on 1/24: 0.25%
on 1/25: 0.375%
on 1/26: 0.75%
on 1/27: 1.125%
on 1/30: 1%
on 1/31: 0.75%
Number of loaned shares dropped slightly in the larger account on 1/30. Both loans ended 1/31. Interest paid on 2/03.

This caught my eye, as this morning I received an email from IBKR inviting me to enroll in their lending program. I scanned the email, but have not looked into it any further. At the bottom of the email, it read “Stock lending involves risks. Information on SYEP and the risks associated with the program is available on our website.”

For what seems from your report to be quite small returns, I would want correspondingly small risks. Do you have any thoughts on what those risks might be, and how severe they might be? I’ll go read the website, but just looking for a less lawyered-up point of view.

If you search for "securities lending" at Morningstar.com, there are several articles, in particular I had read this one which suggests the risk should be very low, though it used to be higher.

https://www.morningstar.com/articles/90 ... es-lending