To stop Fidelity from lending your shares, unenroll from the voluntary Fully Paid Lending Program by contacting Fidelity's Securities Finance Desk at (800) 481-8313 or your financial representative. This is the immediate answer to the question of how to stop fidelity from lending my shares, and it applies whether you want to exit the program entirely or simply recall specific securities that are currently on loan.
What is Fidelity's Fully Paid Lending Program?
Fidelity's Fully Paid Lending Program is a voluntary securities lending arrangement that allows you to earn incremental income on fully paid or excess-margin securities held in your brokerage account. Unlike mandatory lending practices at some firms, participation at Fidelity requires your active enrollment, which includes signing a Master Securities Lending Agreement (MSLA) and maintaining a minimum account balance of $25,000 in each brokerage account you wish to enroll. The program is designed to generate lending fees for you while Fidelity manages the operational mechanics, but it is not something you are automatically placed into, you must opt in.
Why your shares might be on loan right now
If your shares are currently on loan, it is because you actively enrolled in the Fully Paid Lending Program at some point, Fidelity does not lend shares without your explicit consent. However, enrollment does not guarantee that your securities will be borrowed; Fidelity is not obligated to lend them, and borrowing activity depends on market demand from short sellers and other institutional borrowers. To check whether any of your holdings are currently loaned out, log in to your Fidelity.com account and navigate to the Positions page, where you can monitor securities on loan, lending interest rates, and program activity in real time.
Risks of keeping shares in the lending program
While the lending program offers income potential, it carries several risks that may prompt you to stop fidelity from lending my shares. First, securities on loan are not covered under the Securities Investor Protection Corporation (SIPC), meaning you lose that layer of protection while the loan is active. Second, you relinquish your ability to exercise voting rights for loaned shares; if you wish to vote on an upcoming proxy, you must contact Fidelity to recall the securities prior to the record date. Third, there is counterparty default risk, if the borrower fails to return the shares, you could experience a loss, although Fidelity mitigates this by requiring collateral at a minimum of 100% of the loan value, held at a custodial bank independent of Fidelity.
Step 1: Call Fidelity to unenroll or recall your shares
The primary method to stop fidelity from lending my shares is to contact Fidelity directly. Call the Securities Finance Desk at (800) 481-8313 or Fidelity Customer Service at 800-544-6666 to request unenrollment from the Fully Paid Lending Program or to recall specific shares that are currently on loan. When you call, have your account information ready, clearly state your request, and ask for confirmation that your unenrollment has been processed. This phone call is the most direct and reliable way to ensure your preferences are recorded, and it allows you to address any questions about the process in real time.
Step 2: Sell the loaned securities to terminate the loan
If you have shares that are currently on loan and you want an immediate termination of that specific loan, selling those securities will automatically end the lending arrangement. When you execute a sell order for loaned securities, Fidelity will recall the shares from the borrower and settle the transaction, thereby terminating the loan. This method is particularly useful if you are planning to exit a position anyway, as it avoids the need to wait for a separate recall process. Keep in mind that selling may trigger tax consequences or other trading considerations, so evaluate your overall investment strategy before taking this step.
Step 3: Transfer your shares to another brokerage
As a last-resort option, you can transfer your shares to another brokerage that does not participate in securities lending or that offers easier opt-out controls. To do this, research alternative brokerages to find one that aligns with your preferences regarding share lending, then open an account with the new firm. Initiate the transfer by contacting the new brokerage and providing your Fidelity account details; they will handle the transfer process, which may involve completing forms and potentially paying transfer fees. Once the transfer is complete, review your new account to confirm all shares were moved accurately. This option gives you permanent control over whether your shares are ever lent out, but it requires the effort of switching firms.
How to confirm your shares are no longer being lent
After you unenroll from the program or recall specific shares, you should verify that the change has taken effect. Log in to your Fidelity.com account and check the Positions page, which will show any securities currently on loan, along with lending interest rates and program activity. Additionally, review your account statements for any references to securities lending or loan activity. If you still see shares listed as on loan after unenrolling, contact Fidelity again to confirm that your unenrollment was processed correctly and to request a manual recall if necessary.
Frequently asked questions
What are the eligibility requirements for the lending program?
To be eligible for the Fully Paid Lending Program, you must have at least $25,000 in each Fidelity brokerage account you wish to enroll. Additionally, only fully paid or excess-margin securities are eligible to be lent out, and you must execute a Master Securities Lending Agreement with Fidelity.
Is my SIPC coverage affected if my shares are on loan?
Yes, securities on loan are not covered under SIPC. While the loan is active, your shares are not protected by SIPC, which is a key risk to consider when deciding whether to participate in the program.
Can I still vote on corporate matters if my shares are on loan?
No, you relinquish your ability to exercise voting rights for securities on loan. If you wish to vote on an upcoming proxy, you must contact Fidelity to recall the securities prior to the record date.
What collateral does Fidelity provide to mitigate risk?
Fidelity provides collateral at a minimum of 100% of the loan value, held at a custodial bank independent of Fidelity. This collateral helps mitigate counterparty default risk, but it does not eliminate all potential losses.
Is enrollment in the lending program automatic?
No, enrollment is not automatic. You must actively enroll in the Fully Paid Lending Program by signing the Master Securities Lending Agreement and meeting the minimum balance requirements. Fidelity will not lend your shares unless you opt in.
