1/ You hold them directly yourself if your holding is via Chess or the company itself
2/ A broker or institution can hold them on a custodial basis ... where the holding is held/traded in one big pool and they use management accounting to separate it out. This is how some broker managed 'model' accounts work, especially with smaller account balances.
3/ A broker or institution can hold them on a non-custodial basis. This means they're held in your name as a direct account rather than pooled. This is more difficult for the wrap software - but has some advantages. Some broker managed accounts work this was - especially large customised accounts.
So, I don't believe shares can be borrowed without the owner doing the lending (and receiving the fee) in 1/ and 3/. Not sure with 2/ - likely depends on individual agreements with your broker/institution. Most shares seem to be lent by the fund managers - in these cases the funds receive the fees that flow on to unit holders.
Maybe a lawyer in the finance game is reading and can add/confirm info??
On a side note... HUB24 have good software for managing non-custodial (and custodial) wrap accounts. This is one of their advantages and helping them win business (disclosure - I own some HUB).
CCP Price at posting:
$18.27 Sentiment: Hold Disclosure: Held
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