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Fixed Rebate Rate

Fixed Rebate Rate

Field 2.58 | Matching Date: 2020-04-01 | Tolerance: Up to third digit after decimal. | Agent Lender Data Provision: No>

Status: Under Review, Last Updated: 15/02/2023

Field 2.58 | Matching Date: 2020-04-01 | Tolerance: Up to third digit after decimal. | Agent Lender Data Provision: No

Fixed interest rate (rate agreed to be paid by the lender for the reinvestment of the cash collateral minus lending fee) paid by the lender of the security or commodity to the borrower (positive rebate rate) or by the borrower to the lender (negative rebate rate) on the balance of the provided cash collateral.

Best Practice:
If Field 2.73 (Collateralisation of Net Exposure) is populated with "FALSE", then one of the Fields 2.58 (Fixed Rebate Rate) or 2.59 (Floating Rebate Rate) must be populated.

Therefore, for the following loan booking collateral types and where Field 2.73 (Collateralisation of Net Exposure) is populated accordingly, then the please see the following population logic:

Cash Rebate SFTs
= "2.73 is FALSE", then 2.58 is mandatory

Cash Pool SFTs
="2.73 is TRUE", then 2.58 is .

Non-Cash SFTs
="2.73 TRUE", then 2.58 is .

Either Field 2.58 and Field 2.66, or 2.59 and 2.66, will be populated and are mutually exclusive.

In the case of a cash trade settlement DVP then this is set as FALSE for Field 2.73 and either Field 2.58 or Field 2.59 would be populated depending on its booking type. Due to a known issue with Field 2.58 (Fixed Rebate Rate) and 2.59 (Floating Rebate Rate) which has a conditional dependency on Field 2.73 (Collateralisation of Net Exposure), which makes one of them mandatory if the value is "FALSE", the unanimous decision was to always mark non-cash and cash pool SFTs as net exposure equal to "TRUE".

This decision was made to circumvent the alternative which would otherwise see users mandatorily having to provide a rebate rate for a non-cash/cash-pool trade SFT, which of course they cannot. An action that would see their reported message rejected at the TR. Therefore, following this logic where cash-pool there is no need to populate either Field 2.58 or Field 2.59.

This effectively, is an industry agreed solution for a known issue, which both ESMA and the NCAs are aware of. (SFTR-78)


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