Taifook Overseas Power Futures TWS calculates interest on credit and debit cash balances using daily rates applied to end-of-day settled cash balances. The interest methods conform to international standards.

In overview, Taifook Overseas Power Futures TWS uses internationally recognized benchmarks¹ for overnight deposits. We then apply a spread around the benchmark interest rate (“BM”) in tiers such that larger cash balances, whether positive or negative, are given increasingly favorable treatment for determination of the actual interest credits or debits. The effective rates on credit balances, debit balances, and credit balances as a result of short stock positions are shown in the following tables.

Taifook Overseas Power Futures TWS reports interest on a daily, monthly, and annual basis in the Activity Statements. Monthly interest payments/charges are posted to accounts, and reported in statements, at the end of the first full week of the following month (usually between the 6th and 9th of the following month).

Interest Benchmark Definitions

LIBOR (many currencies) stands for London Inter-Bank Offered Rate. It is a daily fixing for deposits with durations from overnight to 1 year and is determined by a group of large London banks. It is the most widely used measurement for interest rates on most currencies outside the domestic market(s).

EONIA (EUR only) is the global standard for overnight Euro deposits and is determined by a weighted average of the actual transactions between major continental European banks mediated through the European Central Bank.

HKOIS (HKD only) is a weighted average for overnight HKD as determined by a group of large HK banks.

KORIBOR (KRW only) is an average for overnight KRW as determined by a group of large Korean banks.

Fed Funds (USD only) is a weighted average of overnight deposits transacted through the US Federal Banking System. It is the best indicator of overnight interest rates for domestic money. Currently, Taifook Overseas Power Futures TWS uses LIBOR as the benchmark for USD interest rates; however, we expect to change to Fed funds in the future as it is a more accurate representation of investment conditions inside the US (as opposed to LIBOR which is the benchmark for offshore funding).

Overnight (O/N) rate is the most widely used short term benchmark and represents the rate for balances held from today until the next business day.

Spot-Next (S/N) refers to the rate on balances from the next business day to the business day thereafter. Due to time zone and other criteria, Spot-Next rates are sometimes used as the short-term reference.

Day-Count conventions: it is beyond the scope of this document to describe day-count conventions and their use in interest calculations. Taifook Overseas Power Futures TWS conforms to the international standards for day-counting wherein deposits rates for most currencies are expressed in terms of a 360 day year, while for exceptional currencies (ex: GBP) the convention is a 365 day year.