If you have other questions about the Fully Paid Lending Program, contact your Janney Financial Advisor.
Schedule of Basis Compensation for Loan:
The compensation to Lender will be in the form of a Loan Fee, which will accrue daily. The Loan Fee is calculated as 50% of the loan rebate at which Janney is borrowing Lender’s shares. The remaining 50% of the loan rebate will be retained by Janney as compensation. Unless otherwise agreed, any Loan Fee payable hereunder shall be payable within fifteen (15) Business Days following the last Business Day of the calendar month in which such fee was incurred. For more information, Lender should refer to the document entitled Important Disclosures Regarding Risks and Characteristics of Participating in Janney Montgomery Scott LLC’s Fully-Paid Securities Lending Program.
Please read the important disclosures below:
• Prior to enrolling, carefully read the Master Securities Lending Agreement and Important Disclosures documents included in the enrollment package. These documents fully detail the disclosures below as well as other important considerations.
• The value of the collateral held on your behalf in the segregated third-party account may constitute the only satisfaction of Janney’s obligation to you in the event Janney becomes insolvent.
• While securities are on loan, any cash distributions paid to you will be credited in the form of a “cash in lieu” payment, which may be subject to different tax consequences than receipt of actual dividends. Janney will
make a best-efforts attempt to avoid borrowing your shares over record date.
• Securities are often borrowed to facilitate short sales. The potential exists that the lending of securities could result in downward pressure on that security as a result of short selling.
• There is no guarantee that your shares will be borrowed, and no guarantee that you will receive the best loan fees for shares.
• Income earned from securities loans is taxed as Miscellaneous Income. In the event you earned income from the program, you will receive an annual 1099-MISC form for your tax records.
• Lending interest rates are variable and may change at any time based on market conditions.
• At this time, IRA and ERISA accounts are prohibited from participating in this program.
Fully Paid Securities Lending may not be appropriate for all investors. Reclassification of dividend income from loaned securities may have implications on tax responsibilities, and voting proxy rights are forfeited. Clients should consider the potential
counterparty risk, reinvestment risk, market risk, liquidity risk, and operational risk, among other considerations. The examples provided are hypothetical and do not take into account any specific situations. The hypothetical examples are provided
to help illustrate the concepts discussed throughout and do not consider the effect of fees, expenses, or other costs that will effect investing outcomes. Any actual performance results will differ from the hypothetical situations illustrated
This information was prepared from sources believed to be reliable but is not guaranteed as to accuracy and is not a complete summary or statement of all available data. There are no guarantees that any investment or investment strategy will meet
its objectives or that an investment can avoid losses. Investment products offered are not insured by the FDIC or any other government agency. They are not deposits or obligations of, or guaranteed by the financial institutions where offered.
They also involve investment risk, including the possible loss of principal. Past performance is not an indication of future results.
Janney Montgomery Scott LLC, its affiliates, and its employees are not in the business of providing tax, regulatory, accounting, or legal advice. These materials and any tax-related statements are not intended or written to be used, and cannot be
used or relied upon, by any taxpayer for the purpose of avoiding tax penalties. Any such taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor.
For more information about Janney, please see Janney’s Relationship Summary (Form CRS) on www.janney.com/crs which details all material facts about the scope and terms of our relationship with you and
any potential conflicts of interest. Please see Fully Paid Lending Disclosures here,
and the Master Securities Lending Agreement here.