I realise trading212 lend out it’s share to other brokers and receive the full amount in cash + fees. I believe by giving the shareholders a small fee for this service you will not only benefit people holding shares but trading212 itself too.
Let’s assume Tom has 50k of shares and trading212 makes a fee lending it out to brokers, Tom if he receives a fee of say 0.1% then he receives 50 pounds. Let’s assume Trading212 places a restriction on the 50 pounds e.g you can’t withdraw this money after 3-5 years, they are forced to buy more shares which allow trading212 to lend out more shares and generate some more money for the company.
There are pros and cons to this obviously
Users are encouraged to invest with T212
T212 allows users to generate a slightly bigger profit than those from other platforms
Assets under management will slowly increase further
At first, it will come at a cost to T212
T212 may not be able to lend out all the shares and may result in revenue losses
To solve one of the cons I believe T212 can reduce the % Tom receives so instead of 0.1% because T212 may face a loss, instead he only receives 0.01%. which not only allows Tom to make at least something from the share lending program but T212 does not generate a loss
Perhaps this will be a great way to increase your assets under management and attract others to your app as this will give you guys a small advantage over the competition,
Thanks for hearing this out