Interactive Brokers has revealed the launch of the Stock Yield Enhancement Program (SYEP) Derivatives for investors in Australia.
The new program aims to providing clients with the opportunity to earn extra income in their accounts. Under the SYEP Derivatives program, clients who agree to lend their shares of stock to Interactive Brokers’ Australia entity can expect to receive cash collateral deposits and returns equivalent to the revenue that may have been earned if the shares were lent out.
Steve Sanders, EVP of Marketing and Product Development at Interactive Brokers, said:
We are always looking for ways to deliver more value to our clients, and the SYEP Derivatives program fits that bill. Our clients can enjoy extra income without having to sacrifice control over their stock, and we are proud to offer this innovative program.
The SYEP Derivatives program is simple and automatic and is available to clients who have been approved for a margin account or have a cash account with equity greater than or equivalent to $50,000.
Once Interactive Brokers Australia receives permission to enter into SYEP Derivatives, the company will manage everything from there. The firm will examine clients’ stock portfolios and enter into SYEP Derivatives with eligible clients, depositing cash collateral in their accounts and paying them a fee reflected as interest.
The American automated global electronic broker highlighted the importance of transparency with SYEP Derivatives. Clients will be able to see the rate they are being paid on the collateral value and the fee paid to the company. Interactive Brokers Australia’s fees for its services usually does not go above 50% of the revenue that could have been earned if the shares were onward lent.
Clients in the SYEP Derivatives program will continue to own the stock as the beneficial owner, which means they will keep market risk and will recognize any profit or loss if the stock price changes. The shares which are loaned in connection to the program will appear on the clients’ account statements, and they can sell their shares or withdraw the authority to enter into SYEP Derivatives at any time without restriction.
Interactive Brokers recently reported a 14%YoY increase in DARTs in January at at 1.988 million.
