What stocks are eligible for the program?
PT will lend your fully-paid, US stocks only.
How can I find the rate in advance of signing up for the Stock Yield Enhancement?
Rates are only published by the industry after the stock loan is made. There is no transparent market for rates and the estimate is based on the yesterday's rates in total.
What will be the impact of lending stock on the calculation of my margin and my excess liquidity?
None. Your ability to borrow is still based on your stock position.
Will this loaned cash appear as a separate category of cash on my account statement?
Yes, it will show up as Collateral Amount in these three new sections of your account statement: Managed Securities Lent, Managed Securities Lent Activity and Managed Securities Lent Fee Details.
When the market value of the loaned security increases or decreases, does the amount of loaned cash change to match it?
Yes, the securities are marked to market nightly.
If I want to sell loaned stock, is the process of sale exactly equivalent to that for stock owned outright?
Yes, PT will automatically terminate the loan when the stock is sold, typically on T+1. You don't have to do anything differently.
If part of a holding of stock in my account had been loaned and part has not, and I then want to sell my entire holding, would this have to be done in two separate transactions, or could I sell the full amount in one single transaction?
You can sell the entire amount if you want. There is no difference in how you trade based on whether or not the shares are lent.
Will this program still benefit me if I have call options written against my shares?
If the stock is fully paid, it will benefit you the same whether or not it has call options written against it.
I understand that tax on "payments in lieu" may be at a different rate from tax on dividends. For US tax purposes, I am a non-resident alien and you have a form W8-BEN on file for me. What rate of tax will your system apply to payments in lieu of dividends in my case?
The same US Tax withholding rates for non –resident aliens applies for both dividends and payments in lieu. In general the rate is 30%, however a lower rate may be applicable if there is a tax treaty between your resident country and the US.
Can I participate in this program if I have an IRA account?
No, the Stock Yield Enhancement Program is not available to our IRA account customers.
Is this program available to customers who live in Canada?
No, the Stock Yield Enhancement Program is not available to Canadian customers at the present time.