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I just found a clause in my custody account contract which says that my broker (the bank) is allowed to lend out my securities to third parties. Is securities lending allowed by FINMA? Is it legal in Switzerland?
Hi there,
Securities lending is generally legal in Switzerland, and is not prohibited by FINMA. However, you as an investor can choose whether or not to sign a contract which allows securities lending.
Always study a brokerage agreement carefully before you sign. If the contract allows for securities lending, ask the broker to remove relevant clauses - unless you are ok with having your securities lent out to third parties.
Best regards from Moneyguru
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