Are there other considerations in need to be aware of before participating in FPSL?

Yes, there are several important factors to consider.

1. Securities that are on loan no longer have shareholder voting rights, therefore if you want to vote, you will need to recall your shares by opting out of the program.
2. Securities on loan do not have SIPC protection during the borrowing period and risk exists on default of securities lending transaction by the counterparty. For this reason, our clearing firm, Apex provides collateral on 100% of the value of the securities that are loaned. This collateral is held at a third-party financial institution to hedge the risk of default.
3. Any dividends paid on the securities on loan will be paid to you. However, they are treated as cash payments instead of dividends, therefore taxed as ordinary income.