Dividends
While your shares are on loan, any dividend-related payments may be made as cash substitute payments instead of the actual dividend.
These payments are reported as ordinary income and may be taxed differently than qualified dividends, depending on your tax situation.
Cash-in-lieu payments will appear as a separate activity from regular dividends in your account activity. If multiple cash-in-lieu payments occur on the same date, they may be grouped into one activity. If a cash-in-lieu payment is tied to a single ticker, the ticker symbol will appear in the activity name.
Voting rights
You temporarily lose voting rights for any shares on loan. Voting rights transfer to the borrower for the duration of the loan.
SIPC coverage
Loaned shares are not SIPC-protected. However, borrowers are required to post cash collateral equal to at least 100% of the loaned shares' value to secure the loan and reduce risk.
