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Pershing may receive servicing fees
from certain insurance companies that participate
in Pershing’s annuity program. Participation
by your financial organization in this program is
optional. These fees may be considered revenue sharing
and are a source of revenue for Pershing.
Pershing also receives operational reimbursement fees from
certain insurance companies. A flat fee per holding
is paid to Pershing for the services it provides,
which may include, but is not limited to posting,
accounting reconciliation, and client statement
preparation and mailing. These fees are a source
of revenue for Pershing. For additional details regarding processing annuities and a listing of insurance companies that pay Pershing revenue sharing and
processing fees, please refer to www.pershing.com/annuity_fees.htm. |
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| Business
Continuity Disclosure |
DISCLOSURE
REQUIRED BY NEW YORK STOCK EXCHANGE RULE 446(D)
Pershing maintains a business continuity plan, including
redundant data centers and alternate processing
facilities, to address interruptions to its normal
course of business. These plans are reviewed annually
and updated as necessary. The plans outline the
actions Pershing will take in the event of a building,
city-wide, or regional incident, including relocating
technology and operational personnel to preassigned
alternate regional facilities. Technology data processing
can also be switched to an alternate regional data
center. All Pershing operational facilities are
equipped for resumption of business and are tested
several times per year. Pershing’s recovery
time objective for business resumption, including
those involving a relocation of personnel or technology,
is four (4) hours. This recovery objective may be
negatively affected by the unavailability of external
resources and circumstances beyond our control.
In the event that your
financial organization experiences a significant
business interruption, you may contact Pershing
directly to process limited trade-related transactions,
cash disbursements, and security transfers. Instructions
to Pershing must be in writing and transmitted via
facsimile at (201) 413-5368 or by postal service
as follows:
Pershing LLC
P.O. Box 2065
Jersey City, New Jersey 07303-2065
For additional information about how to request funds and securities
when your financial organization cannot be contacted
due to a significant business interruption, please
visit the Customer
Support section or call (201) 413-3635 for recorded
instructions. If you cannot access the instructions
from the web site or the previously noted telephone
number, Pershing may be contacted at (213) 624-6100,
extension 500, as an alternate telephone number
for recorded instructions. |
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| Event Sponsorship Fees Disclosure |
| Mutual
fund companies, annuity companies, and other solution
providers offer marketing support in the form of
payments to Pershing (or third parties at Pershing’s
direction) in connection with educational conferences,
events, seminars, and workshops for broker-dealers
or investment professionals. These payments may
be for the expenses of educational materials or
other conference-related expenses. For a listing
of companies that pay contributions to Pershing
for events, please refer to www.pershing.com/event. |
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| Mutual Fund Disclosures |
MUTUAL FUND
BREAKPOINT DISCOUNTS AND OTHER DISCLOSURES RELATING
TO MUTUAL FUND, MONEY FUND, FDIC-INSURED BANK PRODUCT
AND ANNUITY FEES, AND REVENUE SHARING
Before investing in mutual funds, it is important
that you understand the sales charges, expenses,
and management fees that you will be charged, as
well as the breakpoint discounts to which you may
be entitled. Understanding these charges and breakpoint
discounts will assist you in identifying the best
investment for your particular needs, and may help
you to reduce the cost of your investment.
This section will give you general background information about
these charges and discounts; however, sales charges,
expenses, management fees, and breakpoint discounts
vary from mutual fund to mutual fund. Therefore,
you should discuss these matters with your investment
professional and review each mutual fund’s
prospectus and statement of additional information
(which are available from your investment professional)
to obtain the specific information regarding the
charges and breakpoint discounts associated with
a particular mutual fund. |
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| Sales Charges |
Investors who purchase mutual funds must make certain
choices, including which funds to purchase and which
share class is most advantageous in light of their
specific investing needs. Each mutual fund has a
specified investment strategy. You should consider
whether the mutual fund’s investment strategy
is compatible with your investment objectives. Additionally,
many mutual funds offer different share classes.
Although each share class represents a similar interest
in the mutual fund’s portfolio, the mutual
fund will charge you different fees and expenses
depending upon your choice of share class. As a
general rule, Class A shares carry a “front-end”
sales charge or “load” that is deducted
from your investment at the time you buy the fund
shares. This sales charge is a percentage of your
total purchase.
As explained below, many mutual funds offer volume discounts
to the front-end sales charge assessed on Class
A shares at certain predetermined levels of investment,
which are called “breakpoint discounts.”
In contrast, Class B and C shares usually do not
carry any front-end sales charges. Instead, investors
who purchase Class B or C shares pay asset-based
sales charges, which may be higher or lower than
the charges associated with Class A shares. Investors
that purchase Class B or C shares may also be required
to pay a sales charge known as a contingent deferred
sales charge when they sell their shares, depending
upon the rules of the particular mutual fund. This
is known as a “back-end” sales charge
or “load.” |
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| Breakpoint Discounts |
Most mutual funds offer investors a variety of ways
to qualify for breakpoint discounts on the sales
charge associated with the purchase of Class A shares.
In general, most mutual funds provide breakpoint
discounts to investors who make large purchases
at one time. The extent of the discount depends
upon the size of the purchase. Generally, as the
amount of the purchase increases, the percentage
used to determine the sales load decreases. The
entire sales charge may be waived for investors
that make very large purchases of Class A shares.
Mutual fund prospectuses contain tables that illustrate
the available breakpoint discounts and the investment
levels at which breakpoint discounts apply. Additionally,
most mutual funds allow investors to qualify for
breakpoint discounts based upon current holdings
from prior purchases through Rights of Accumulation
(ROA) and from future purchases based upon Letters
of Intent (LOI). Mutual funds have different rules
regarding the availability of ROAs and LOIs. Therefore,
you should discuss these matters with your investment
professional and review the mutual fund’s
prospectus and statement of additional information
to determine the specific terms upon which a mutual
fund offers ROAs or LOIs.
Rights of Accumulation—Many
mutual funds allow investors to count the value
of previous purchases of the same fund, or another
fund within the same fund family, with the value
of the current purchase to qualify for breakpoint
discounts. Moreover, mutual funds may allow investors
to count existing holdings in multiple accounts,
such as individual retirement accounts (IRAs) or
accounts at other financial organizations to qualify
for breakpoint discounts. Therefore, if you have
accounts at other financial organizations and wish
to take advantage of the balances in these accounts
to qualify for a breakpoint discount, you must advise
your investment professional about those balances.
You may need to provide documentation if you wish
to rely upon balances in accounts at another firm.
In addition, many mutual
funds allow investors to count the value of holdings
in accounts of certain related parties, such as
spouses or children, to qualify for breakpoint discounts.
Each mutual fund has different rules that govern
when relatives may rely upon each other’s
holdings to qualify for breakpoint discounts. You
should consult with your investment professional
and review the mutual fund’s prospectus and
statement of additional information to determine
what these rules are for the fund family in which
you are investing. If you wish to rely upon the
holdings of related parties to qualify for a breakpoint
discount, you should advise your investment professional
about these accounts. You may need to provide documentation
to your investment professional if you wish to rely
upon balances in accounts at another firm. Mutual
funds also follow different rules to determine the
value of existing holdings. Some funds use the current
net asset value (NAV) of existing investments in
determining whether an investor qualifies for a
breakpoint discount. However, a small number of
funds use the historical cost, which is the cost
of the initial purchase, to determine eligibility
for breakpoint discounts. If the mutual fund uses
historical costs, you may need to provide account
records, such as confirmation statements or monthly
statements, to qualify for a breakpoint discount
based upon previous purchases. You should consult
with your investment professional and review the
mutual fund’s prospectus and statement of
additional information to determine whether the
mutual fund uses NAV or historical costs to determine
breakpoint eligibility.
Letters of Intent—Most
mutual funds allow investors to qualify for breakpoint
discounts by signing a LOI, which commits the investor
to purchasing a specified amount of Class A shares
within a defined period of time, usually 13 months.
For instance, if an investor plans to purchase $50,000
worth of Class A shares over a period of 13 months,
but each individual purchase would not qualify for
a breakpoint discount, the investor could sign an
LOI at the time of the first purchase and receive
the breakpoint discount associated with a $50,000
investment on the first and all subsequent purchases.
Additionally, some funds offer retroactive LOIs
that allow investors to rely upon purchases in the
recent past to qualify for a breakpoint discount.
However, if an investor fails to invest the amount
required by the LOI, the fund is entitled to retroactively
deduct the correct sales charges based upon the
amount that the investor actually invested. If you
intend to make several purchases within a 13-month
period, you should consult your investment professional
and the mutual fund prospectus to determine if it
would be beneficial for you to sign an LOI. As you
can see, understanding the availability of breakpoint
discounts is important because it may allow you
to purchase Class A shares at a lower price. The
availability of breakpoint discounts may save you
money and may also affect your decision regarding
the appropriate share class in which to invest.
Therefore, you should discuss the availability of
breakpoint discounts with your investment professional
and carefully review the mutual fund prospectus
and its statement of additional information when
choosing among the share classes offered by a mutual
fund. If you wish to learn more about mutual fund
share classes or mutual fund breakpoints, you can
also review the investor alerts that are available
on the Financial Industry Regulatory Authority (FINRA) web site.
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| Mutual Fund Fees and Revenue Sharing |
Pershing may receive servicing fees from mutual
funds that participate in Pershing’s mutual
fund no-transaction-fee program (FundVest®)
in lieu of clearance charges to your financial organization.
Participation by your financial organization in
this program is optional and your financial organization
may share with Pershing in such fees. These fees
may be considered revenue sharing and are a significant
source of revenue for Pershing and may be a significant
source of revenue for your financial organization.
These fees are paid in accordance with an asset-based
formula.
Pershing also
receives operational reimbursements from mutual
funds in the form of networking or omnibus processing
fees. These fees are based on a flat fee per holding
and are reimbursed to Pershing for the work it performs
on behalf of the funds, which may include but is
not limited to subaccounting services, dividend
calculation and posting, accounting, reconciliation,
client confirmation and statement preparation and
mailing, and tax statement preparation and mailing.
These fees are a significant source of revenue for
Pershing. For additional details regarding Pershing’s
mutual fund no-transaction-fee program or a listing
of funds that pay Pershing networking or omnibus
fees, please refer to www.pershing.com/mutual_fund.htm. |
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| Money
Fund and FDIC-Insured Bank Product Fees and Revenue
Sharing |
Money fund and FDIC-insured bank deposit
processing and revenue sharing fees are significant sources
of revenue for Pershing and may be significant sources of revenue
for your financial organization. Pershing receives fees from
money fund providers for making available money market funds
or FDIC-insured bank deposit programs, which you have selected
through your financial organization. These fees are paid in
accordance with an asset-based formula. Your financial organization
may share in these fees. A portion of Pershing’s fees
is applied against costs associated with providing services
on behalf of the funds, which may include maintaining cash sweep
systems, sub-accounting services, dividend calculation and posting,
accounting, reconciliation, client statement preparation and
mailing, tax statement preparation and mailing, marketing and
distribution related support, and other services.
Pershing receives processing
fees from certain money fund and FDIC-insured bank product providers, which may
be associated with your financial organization.
These fees reimburse Pershing for operational services
it performs on behalf of the funds, which may include
maintaining cash sweep systems, subaccounting services,
dividend calculation and posting, accounting, reconciliation,
client statement preparation and mailing, tax statement
preparation and mailing, or other services. For
a listing of money funds and FDIC-insured bank products that pay Pershing revenue
sharing and processing fees, please refer to www.pershing.com/money_fund.htm. |
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| Order Routing Disclosure |
SEC Rule 606
Pershing has
provided the data concerning the routing of order
flow (the "Data") on the order routing
disclosure web site. Although Pershing has used
commercially reasonable efforts to provide accurate
data, the data is provided to you on an "as
is" basis.
If you would like to
read this information, visit the order routing disclosure
site and enter Pershing LLC when prompted for the
broker-dealer's full name. |
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Pershing.com© 1996-2007 Pershing LLC. All rights reserved.
Pershing LLC, member FINRA, NYSE, SIPC
Trademark(s) belong to their respective owners. |
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