Who sets the stock loan costs in U.S. markets?

External question — Personal Finance Stack Exchange Author: feetwet Original post: https://money.stackexchange.com/questions/141350 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. The market "fee rate" (a.k.a. borrow cost ) for borrowing stock shares to sell short can run very high. (One source for the current borrow cost is a list published every 15 minutes by Interactive Brokers .) Currently some stocks that I own are being listed with triple-digit borrow costs. I own those stocks in a margin account with a broker where I have completed a stock lending agreement. I can see that my shares have not been lent out. So I have shares available to lend at the same time that short sellers are paying more than 100% annually for the shares they have borrowed to sell short. I would be happy to lend my shares for a small fraction of the current rate being quoted market. It is true that brokers take a significant cut of the "fee rate" before it is paid to any owner of shares that are lent out. But even with that mark-up I'd be willing to undercut the market lending rate. For example: I have un-lent shares of a stock with a fee rate of 125%. I would be happy to lend my shares for a 20% fee. The broker can mark that up to 40% or more and still vastly undercut the current market offer. How can I offer to lend my shares at net rate lower than the current market borrow cost? And if I can't then why can't I?