The Fee Rate represents the indicative rate (generally expressed as an interest rate) that the lender assesses to the borrower of the shares. This is the indicative borrow fee rate clients will pay MEXEM to short a stock. It is a debit from the account. The lender will then reinvest the cash collateral posted by the borrower to secure return of the shares and may provide a partial rebate of those earnings back to borrower's broker (generally equal to the Fed Funds Rate in the case of USD stock loans). Many brokers do not pass any part of this rebate to retail accounts although MEXEM does and the Rebate Rate is an indication of the net of the Fee Rate and any rebate offered. For example, assume stock ABC is hard-to-borrow and carries a Fee Rate of 20%. If the Fed Funds Rate and rebate provided is 2% then the Rebate rate is -18% (note that a negative Rebate Rate reflects a net charge to the borrower). The Rebate Rate column signifies the top tier Short Sales Proceeds Interest (SSIP) rate, which is the Fed Funds or other currency-relevant Benchmark rate less the top tier Short Sale Proceeds Interest spread, minus the borrow fee. This is meant to inform clients of the credit interest they will receive on their short stock cash proceeds. More information on securities financing interest rates can be found on our website.
All investments involve risks, including the possible loss of capital.
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Any advertisement or communication concerning the distribution of derivatives falling within the scope of the Regulation of the FSMA of 26 May 2016 governing the distribution of certain derivative financial instruments to retail clients is not addressed to the Belgian public.