23 April 1992 Memorandum 921211 (September 1992 Access Letter, p. 39)

A situation in which a securities dealer would borrow a share on which either a cash dividend, or a stock dividend valued at a 5% discount from the market price, was payable, elect to receive the stock dividend, sell the stock dividend upon receipt and pay a dividend compensation amount and a portion of the profit on the transaction to the lender of the share, would be considered a securities lending arrangement, and might also be considered a dividend rental arrangement.

A situation in which a securities dealer would borrow a share on which either a cash dividend, or a stock dividend valued at a 5% discount from the market price, was payable, elect to receive the stock dividend, sell the stock dividend upon receipt and pay a dividend compensation amount and a portion of the profit on the transaction to the lender of the share, would be considered a securities lending arrangement, and might also be considered a dividend rental arrangement.