Business Continuity & Other Disclosures

Important Legal Information
Business Continuity Disclosure
Business Continuity Planning—Pandemic Statement of Preparation
Confirmation of Executions and/or Cancellations
Disclosure Regarding Securities Lending in Margin Accounts
Disclosure Statement
Estimated Annual Income and Estimated Yield
Extended-Hours Trading Risk Disclosure
Float Disclosure
Mutual Fund, Money Fund and FDIC-Insured Bank Program Disclosures
> Mutual Fund Sales Charges
> Mutual Fund Breakpoint Disclosures
> Mutual Fund Fees and Revenue Sharing
> Money Fund and FDIC-Insured Bank Program Fees and Revenue Sharing
National Instrument 24-101 Trading Matching and Settlement
Nonbank Custodian Statement Message
Order Routing SEC Rule 606
Pershing's Impartial Lottery Process: Partial Calls
Prohibition Against Internet Gambling
Sponsorship Fees Disclosure
Trailing Stop Orders

Business Continuity Disclosure
DISCLOSURE REQUIRED BY FINANCIAL INDUSTRY REGULATORY AUTHORITY (FINRA) 4370

Pershing Advisor Solutions and its affiliates maintain a business continuity plan (the Plan) that covers the resumption of business processes for each Pershing Advisor Solutions department in the event of a business interruption, consistent with applicable regulations, including FINRA Rule 4370. The Plan is updated whenever there is a material change to the Pershing Advisor Solutions business. Additionally, Pershing Advisor Solutions policy requires formal semiannual reviews, including business risk assessments of the Plan. Changes to Pershing Advisor Solutions processes, products, or the business environment are evaluated, and modifications to the configuration of Pershing Advisor Solutions Business Continuity Disaster Recovery Sites (Recovery Sites) are performed as required. Current copies of the Plan are maintained in several off-site locations.

Pershing Advisor Solutions also maintains Recovery Sites for its personnel. The Recovery Sites provide for the relocation of Pershing Advisor Solutions associates to resume processing operations and trading functions in the event of a business interruption. Each operations or trading workstation to be used under the Plan is equipped with all the software, as well as all the telecommunication equipment, needed for Pershing Advisor Solutions associates to continue in their role. A centralized fax and wire printer room, where all communications to Pershing Advisor Solutions are controlled, is also maintained. Partitions on the hard drives of the workstations to be used under the Plan separate business continuity client server, market data and desktop applications from the day-to-day uses of the Recovery Sites workstations. Pershing Advisor Solutions also employs telephone rollover technology whereby the local telephone company is able to route inbound calls and faxes to the Recovery Sites’ facilities outside of
Jersey City, New Jersey.

If you are unable to contact your investment advisor due to a significant business interruption, Pershing Advisor Solutions may be contacted directly by you to process limited trade-related transactions, cash disbursements, and security transfers. Such instructions to Pershing Advisor Solutions must be in writing and transmitted via facsimile at (201) 413-4444 or postal service as follows:

Pershing Advisor Solutions LLC
P.O. Box 2065
Jersey City, NJ 07303-2065

For additional instructions, please select the Business Continuity and Client Support links at the bottom of the home page on the Pershing Advisor Solutions website at pershingadvisorsolutions.com, or contact Pershing Advisor Solutions at (877) 604-8967.

Pershing Advisor Solutions has entered into a Clearing Agreement with Pershing, pursuant to applicable regulations including FINRA Rule 4311. Under the terms of the Clearing Agreement, Pershing provides certain services to Pershing Advisor Solutions including trade execution, clearance, and custodial services. Pershing maintains its own business interruption plan (the Pershing Plan), which is outlined below. Pershing maintains the Pershing Plan, including redundant data centers and processing facilities, to address interruptions to its normal course of business. The Pershing Plan is reviewed annually and updated as necessary.

The Pershing Plan outlines 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 or less. This recovery objective may be negatively affected by the unavailability of external resources and circumstances beyond its control. In the event that you and your investment advisor(s) are unable to contact Pershing Advisor Solutions due to a significant business interruption, you may contact Pershing directly to process limited trade-related transactions, cash disbursements, and security via facsimile at (201) 413-5368 or by postal service as follows:

Pershing LLC
P.O. Box 2065
Jersey City, NJ 07303-2065

For additional information about how to request funds and securities when Pershing Advisor Solutions cannot be contacted due to a significant business interruption, please call (201) 413-3635 for recorded instructions. If you cannot access the instructions from this telephone number, Pershing may be contacted at (213) 624-6100, extension 500, as an alternate telephone number for recorded instructions.

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Business Continuity Planning—Pandemic Statement of Preparation
Pershing has developed a Statement of Preparation to address the possibility of a pandemic outbreak and provide you with an overview of our plans for mitigating the potential impact. If such a situation occurs, we are confident that we are well positioned to maintain critical functions in support of your business. Please visit the Pandemic Statement of Preparation section of this website for complete information regarding our pandemic business continuity plans.

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Confirmation of Executions and/or Cancellations
Confirmations of executions or cancellations may be delayed, erroneous (e.g., due to computer system issues) or cancelled/adjusted by an exchange or market center. Any reporting or posting errors, including errors in execution prices or cancellations, will be corrected to reflect what actually occurred in the marketplace; you will be bound by such terms. The cancellation of an order is not guaranteed and will only be cancelled if the request is received by the market center to which the order was routed and matched with the order to be cancelled before it is executed. During market hours, it is rarely possible to cancel a market order or a marketable limit order, as such orders are subject to immediate execution. You should not assume that any order has been executed or canceled until you have received a transaction or cancellation confirmation from your financial organization or Pershing.

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Disclosure Regarding Securities Lending in Margin Accounts
Before trading securities in a margin account, it is important to carefully review the written Margin Agreement provided by Pershing Advisor Solutions or its clearing firm (Pershing), and, where applicable, to consult with your Investment Advisor regarding any questions or concerns you may have regarding margin accounts. When you purchase securities, you have the option of paying for them in full or borrowing part of the purchase price from Pershing. If you choose to borrow funds from Pershing, you will need to open a margin account with Pershing through Pershing Advisor Solutions. The securities purchased are used as collateral for the loan that was made to you or any other indebtedness arising after the initial transaction. If the securities in your brokerage account decline in value, so does the value of the collateral supporting your loan. As a result, Pershing Advisor Solutions or Pershing can take action. For instance, Pershing Advisor Solutions or Pershing may issue a margin call and/or sell securities or liquidate other assets in any of your brokerage accounts held with Pershing Advisor Solutions or Pershing to maintain the required equity in the margin account. It is important that you fully understand the risks involved in trading securities on margin. Further, buying securities on margin might result in dividends being paid as substitute payments or cash-in-lieu, which could lead to a different tax treatment for the investor. In addition, investors who buy securities on margin might not be allowed to vote those securities in the event of a proxy. Pershing does not lend fully-paid-for securities without your written permission under a separate Fully Paid Lending Agreement.

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Estimated Annual Income and Estimated Yield
The following disclosure pertains to estimated annual income (EAI) and estimated current yield (ECY) figures displayed on Pershing LLC’s brokerage account statements. The EAI and ECY figures are estimates and for informational purposes only. These figures are not considered to be a forecast or guarantee of future results. These figures are computed using information from providers believed to be reliable; however, no assurance can be made as to the accuracy. Since interest and dividend rates are subject to change at any time, and may be affected by current and future economic, political and business conditions, they should not be relied on for making investment, trading or tax decisions. These figures assume that the position quantities, interest and dividend rates, and prices remain constant. A capital gain or return of principal may be included in the figures for certain securities, thereby overstating them.

The EAI figure for U.S. government, corporate and municipal securities is computed by multiplying the coupon rate by the quantity of the security and then dividing that figure by 100. The resulting figure is reflected on the brokerage account statement in the EAI field. The EAI for equity, mutual fund, unit investment trust and exchange-traded fund securities is computed using either a historical methodology (HM) or projected methodology (PM), depending on the information from the issuer. The PM annualizes the latest regular cash dividend. The HM accumulates the regular cash dividends over the past twelve months. If there is less than one year of dividend history, the accumulated dividends are annualized. The EAI for preferred securities is computed using the PM. The HM or PM figure, whichever is calculated, is then multiplied by the quantity of the security and the resulting figure is reflected on the brokerage account statement in the EAI field.

The following are important caveats to the HM figure and PM figure.

  • The figure is denominated in the same currency as the dividend announcement.
  • The figure does not contemplate special or extra dividends.
  • When a security pays its first dividend with no specificity as to dividend frequency, the initial dividend will be the reported figure.
  • If a security announces a stock split and does not announce a new dividend rate, the figure will be adjusted on the ex-distribution/dividend date.
  • For a called security, the figure will remain unchanged until the payment date, at which point it will revert to zero.
  • The figure for Canadian securities is calculated the same way as for U.S. securities.
  • The figure for mutual funds only includes dividends treated as income.
  • The figure will be zero under the following scenarios: a security that has only paid capital gains during the preceding year; a security that has only had stock splits, stock (not cash) dividends or reverse stock splits during the preceding year; a security other than an open-end mutual fund (excluding a money market fund), ADR preferred, or exchange-traded fund which rescinds or omits a dividend payment; and a security from an issuer which is in arrears and uncertain about its ability to make a dividend payment.

The ECY figure is computed by dividing the EAI figure by the current market price of the security, which may be higher or lower than the purchase price, and then the figure is multiplied by 100. The resulting figure is reflected on the brokerage account statement in the ECY field. With specific regard to a fixed income security, the initial purchase confirmation oftentimes reflects yield to maturity, yield to call and/or yield to worst figures which are more relevant figures from the point of purchase.

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Extended-Hours Trading Risk Disclosure
Extended-hours trading sessions offer the ability to trade all National Market System (NMS) equity securities that have not been halted both before and after the regular market session (9:30 a.m. to 4 p.m. [ET]). Increased trading opportunity means increased ability to react to news and earnings reports that occur during pre- and postmarket sessions. The following sections provide important information regarding Pershing’s extended-hours trading sessions.

Session Times.

  • Pre-Market Trading—8 a.m. to 9:15 a.m. (ET) each business day.
  • After-Market Trading—4:15 p.m. to 6:30 p.m. (ET) each business day

For certain trading sessions around holidays, early exchange closings at 1 p.m. (ET) will result in modifications to extended trading times.

Allowable Order Types. Limit orders only.

Order Size. Round lots, mixed lots and odd lots, with a maximum order size of 99,999 shares per order.

Order Duration. Orders entered are only in force for the trading session during which they were entered. Good till canceled (GTC), good this day (GTD), good this week (GTW) and good this month (GTM) orders are not allowed.

Securities Available. NMS equity securities are eligible for trading.

Non-NMS Quotation Service (NNQS), Pink Sheets and securities traded on foreign exchanges are not eligible for extended-hours trading.

How Pershing Executes Extended-Hours Trades. Pershing executes extended-hours trades by routing orders to a participating exchange. The market center will automatically match client buy and sell orders with bids and offers they are holding. In addition, markets may be linked to other exchanges or electronic trading systems to improve the opportunity for your order to be executed.

Types of Orders That Can Be Placed During Extended-Hours Trading. Only limit orders may be entered in both the pre- and postmarket trading sessions. Other types of orders and order qualifiers, such as market, stop, all-or-none (AON) and fill-or-kill (FOK) are not currently available. The minimum order size is one (1) share and the maximum order size is 99,999 shares per order.

Short Sales During Extended-Hours Trading. Short sales are permitted during extended-hours trading sessions. An affirmative determination is required to verify that the security is available to borrow.

Duration of Orders Placed During Extended-Hours Trading. Orders placed during extended-hours trading sessions are only good for the session during which the order is placed. If the order is not executed during a specific extended-hours session, the order expires at the end of that session and does not roll over to the next regular hours session do not roll over to the extended-hours session. Orders not yet executed can be canceled in the same manner as regular session orders before the close of that session. Orders executed during an extended-hours session are considered to have been executed during that day’s regular session for settlement and clearing purposes. Settlement dates for extended-hours trades follow the same rule as regular hours trading, which is typically three business days after the day on which the transaction occurred. For instance, if your pre-market order to buy is executed on Monday, the 23rd day of the month, the settlement date is Thursday, the 26th day of the month, and payment is due at that time.

Margin Requirements for Extended-Hours Trading. Margin requirements remain the same as during regular trading hours. A stock’s margin eligibility during extended-hours sessions is computed using the closing price of the previous regular market session. In this section, “you” refers to the individual investor, the Investment Advisor, the Separate Account Manager(s) (if applicable).

Risks. As with any securities trading, there are risks. Additional risks associated with extended-hours trading include:

  • Risk of Timing of Order Entry—All orders entered and posted during extended-hours trading sessions must be limit orders. You must indicate the price at which you would like your order to be executed. By entering the price, you agree not to buy for more or sell for less than the price you entered, although your order may be executed at a better price. Your order will be executed if it matches an order from another investor or market professional to sell or purchase on the other side of the transaction. In addition, there may be orders entered ahead of your order by investors willing to buy or sell at the same price. Orders entered earlier at the same price level will have a higher priority. This means that if the market is at your requested price level, an order entered prior to your order will be executed first. This may prevent your order from being executed in whole or in part.
  • Risk of Execution Pricing—For extended-hours trading sessions, quotations will reflect the bid and ask currently available through the utilized quotation service. The quotation service may not reflect all available bids and offers posted by other participating ECNs or exchanges, and may reflect bids and offers that may not be accessible through Pershing or respective trading partners. This quotation montage applies for both pre- and post-market sessions. Not all systems are linked; therefore, you may pay more or less for your security purchases or receive more or less for your security sales through a participating ECN or exchange than you would for a similar transaction on a different ECN or exchange.
  • Risk of Communications Delays or Failures—Delays or failures in communications due to a high volume of orders or to other computer or system problems, including Internet disruptions, may cause delays in or prevent the execution of your order. Any communication or computer problems experienced by Pershing, its designated order manager, or participating ECN or exchange, may prevent or delay the order from being executed. Pershing reserves the right to temporarily or permanently close an extended-hours trading session without prior notification in the event of system failures or unforeseen emergencies. Pershing will not be held liable for missed executions in the case of a system failure.
  • Risk of Lower Liquidity—Liquidity refers to buying and selling securities. Generally, if there are more orders available in the market, then the security is more liquid. Due to limited trading activity in the extended-hours trading sessions, the liquidity in these sessions may be significantly less than during regular market hours. Lower liquidity may prevent your order from being executed in whole or in part, or from receiving as favorable a price as you might receive during regular trading hours. In addition, lower liquidity means fewer shares of a given security are being traded, which may result in larger spreads between bid and ask prices and volatile swings in stock prices.
  • Risk of Trading Halts—News stories may have a significant impact on stock prices during extended-hours trading sessions. The SEC, the FINRA or a stock exchange may impose a trading halt when significant news has affected a company’s stock price. Any SEC-, FINRA-, or exchange-imposed trading halt will be enforced. Pending orders for a security will be held upon imposition of a trading halt for that security and reinitiated upon resumption of trading during that session.
  • Risk of Duplicate Orders—There is a risk of duplicate orders if you place an order for the same security in both an extended-hours session and the regular trading session, even if that order is a day order. Orders executed during regular trading hours may not be confirmed until after the post-market extended trading session has already begun. Similarly, orders executed in the pre-market session may not be confirmed until after regular trading has begun.
  • Risk of Partial Executions—Orders placed during extended trading hours are entered through a participating ECN or exchange, which may be linked to other ECNs or exchanges. Because you cannot add qualifiers to an order, such as AON or FOK, a round lot order may be filled in part by an odd lot or mixed lot order, leaving stock left over to buy or to sell. There is a risk that the remaining order may not be filled during the extended-hours session. An odd lot may not be represented in the displayed quote. This would occur in instances in which an order has an execution leaving an odd lot. There are no execution guarantees for an odd lot or the odd lot portion of a mixed lot portion of an order.
  • Risk of Lack of Calculation or Dissemination of Underlying Index Value or Intraday Indicative Value (IIV)—For certain derivative securities products, an updated underlying index value, or IIV, may not be calculated or publicly disseminated in extended trading hours. Since the underlying index value and IIV are not calculated or widely disseminated during the opening and late trading sessions, an investor who is unable to calculate implied values for certain derivative securities products in those sessions may be at a isadvantage to market professionals.
  • Risk of Higher Volatility—Volatility refers to the changes in price that securities undergo when trading. Generally, the higher the volatility of a security, the greater its price swings. There may be greater volatility in extended-hours trading than in regular market hours. As a result, your order may only be partially executed, or not at all, or you may receive an inferior price in extended-hours trading than you would during regular market hours.
  • Risk of News Announcements—Normally, issuers make news announcements that may affect the price of their securities after regular market hours. Similarly, important financial information is frequently announced outside of regular market hours. In extended hours trading, these announcements may occur during trading and, if combined with lower liquidity and higher volatility, may cause an exaggerated and unsustainable effect on the price of a security.
  • Risk of Wider Spreads—The spread refers to the difference in price for which you can buy and sell a security. Lower liquidity and higher volatility in extended-hours trading may result in wider than normal spreads for a particular security.

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Float Disclosure
Pershing may obtain a financial benefit attributable to the cash balances in any account (including Employee Retirement Income Security Act accounts) that are held by Pershing in accounts that it has with major money center banks (the names of which will be provided upon request). These cash balances result from (1) cash awaiting investment or (2) cash pending distribution. Pershing’s financial benefit may be in the form of interest earned on such balances and/or reductions in interest expenses that Pershing would otherwise pay to such money center banks. To the extent that the financial benefit is in the form of interest paid to Pershing, it is often paid at the federal funds rate.

With respect to cash awaiting investment (e.g., new contributions), Pershing obtains such financial benefit until the funds are invested in a money market fund or are used to purchase securities. If an account agreement provides for the automatic investment into a money market fund, such investment will take place on the day after the receipt of cash (and the financial benefit will be one day), unless instructions are received to manually purchase money fund shares on the same day that cash is received. Such instructions must be received before the cutoff time established by each money market fund available to the account. If the account agreement does not provide for automatic investment into a money market fund, such investment will take place on the day after the receipt of appropriate instructions.

When Pershing receives a request for a distribution by check, the account is charged (debited) on the date the check is written. Cash is transferred to a Pershing disbursement account maintained with a major money center bank on the day the check is presented for payment. Pershing mails disbursement checks on the same day that they are written. Pershing may obtain the financial benefit described above from the date the check is written until the date the check is presented for payment, the timing of which is beyond the control of Pershing. When a distribution is requested using a Automated Clearing House instruction, Pershing receives a one-day financial benefit in connection with the distribution. If the distribution is made using the Federal Reserve wire system, Pershing receives no financial benefit in connection with the distribution.

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Mutual Fund, Money Fund and FDIC-Insured Bank Program Disclosures
CHARGES, BREAKPOINT DISCOUNTS, 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 Advisor and Separate Account Manager(s) and review each mutual fund’s prospectus and statement of additional information (available from your Investment Advisor and Separate Account Manager[s]) to obtain the specific information regarding the charges and breakpoint discounts associated with a particular mutual fund.

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Mutual Fund 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. These decisions will be made by you or your Investment Advisor and Separate Account Manager(s), subject to your agreements with them. You and they 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, known as “breakpoint discounts,” to the front-end sales charge assessed on Class A shares at certain predetermined levels of investment.

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 who 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 the “load.”

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.

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Mutual Fund Breakpoint Discounts
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, where applicable, you should discuss these matters with your Investment Advisor and Separate Account Manager(s), 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 firms to qualify for breakpoint discounts. Therefore, if you have accounts at other firms and wish to take advantage of the balances in these accounts to qualify for a breakpoint discount, you must advise your Investment Advisor 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. Where applicable, you should consult with your Investment Advisor and Separate Account Manager(s) 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 Advisor and Separate Account Manager(s) about these accounts. You may need to provide documentation to your Investment Advisor and Separate Account Manager(s) 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 to establish whether an investor qualifies for a breakpoint discount. However, a small number of funds use the historical cost, which is the initial purchase cost, 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 Advisor and Separate Account Manager(s) and review the mutual fund’s prospectus and statement of additional information to determine whether the mutual fund uses NAV or historical costs to establish breakpoint eligibility.

Letters of Intent (LOI)—Most mutual funds allow investors to qualify for breakpoint discounts by signing an LOI, which commits the investor to purchase 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 recent purchases 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 Advisor, applicable Separate Account Manager(s) 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, where applicable, you should discuss the availability of breakpoint discounts with your Investment Advisor and Separate Account Manager(s) 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 available on the FINRA website at finra.org/Investors/ProtectYourself/InvestorAlerts/MutualFunds/index.htm.

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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 Pershing Advisor Solutions. Participation by Pershing Advisor Solutions in this program is optional and Pershing Advisor Solutions may share with Pershing in such fees. These fees may be considered revenue sharing, are a significant source of revenue for Pershing and may be a significant source of revenue for Pershing Advisor Solutions. These fees are paid in accordance with an asset-based formula. Pershing Advisor Solutions may share a portion of these fees with certain turnkey asset management providers that provide operational and related services to Pershing Advisor Solutions, for both Employee Retirement Income Security Act (ERISA) and non-ERISA accounts administered within the providers’ programs.

Pershing also receives operational reimbursements from mutual funds in the form of networking or omnibus processing fees. These fees 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 mailing. These fees are a significant source of revenue for Pershing. For please refer to pershing.com/ria/mutual_fund.htm.

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Money Fund and FDIC-Insured Bank Program Fees and Revenue Sharing
Money fund and FDIC-insured bank deposit fees for processing and revenue sharing are significant sources of revenue for Pershing and may be significant sources of revenue for Pershing Advisor Solutions. Pershing receives fees from money fund providers for making available money market funds or FDIC-insured bank deposit programs, which you may have selected through your Investment Advisor. These fees are paid according to an asset based formula. Pershing Advisor Solutions may share in these fees. Pershing Advisor Solutions may share a portion of these fees with certain turnkey asset management providers that provide operational and related services to Pershing Advisor Solutions for both ERISA and non-ERISA accounts administered within the providers’ programs. A portion of Pershing’s fees is applied against costs associated with providing services on behalf of the providers, which may include: cash sweep systems, subaccounting services, dividend and interest 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 FIDC-insured bank deposit providers. These fees reimburse Pershing for operational services it performs on behalf of the funds, which may include: 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 programs that pay Pershing revenue sharing and processing fees, please refer to pershing.com/ria/money_fund.htm.

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National Instrument 24-101 Trading Matching and Settlement
To comply with requirements of National Instrument 24-101, Pershing is required to ensure compliance with the central requirements of the instrument for all institutional trades. Click here for attestation of Pershing's National Instrument 24-101 compliance.

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Order Routing SEC Rule 606
Pershing Advisor Solutions is a registered broker-dealer and it sends orders on behalf of clients to Pershing for routing to various market centers for execution. You can view the top venues with which Pershing executes nondirected orders by selecting a market center link below.

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Pershing's Impartial Lottery Process: Partial Calls
When a security is subject to a partial redemption, pursuant to New York Stock Exchange (NYSE) Rule 402.30, which has been incorporated into the FINRA Consolidated Rulebook, Pershing must have procedures in place that are designed to treat clients fairly in accordance with an impartial lottery process.

When an issuer initiates a partial call of securities, the depository holding such securities (typically, the Depository Trust Corporation, or DTC) conducts an impartial, computerized lottery using an incremental random number technique to determine the allocation of called securities to participants for which it holds securities on deposit, (including Pershing). Because DTC’s lottery is random and impartial, participants may or may not receive an allocation of securities selected for redemption.

When Pershing is notified that it received an allocation of called securities, Pershing conducts a similar, computer-generated random lottery. The lottery determines the accounts that will be selected and the number of securities in the account that will be redeemed. Allocations are based on the number of trading units held in the account. The probability of any trading unit held by an account being selected as called in a partial call is proportional to the total number of trading units held through Pershing.

Once the lottery is complete, Pershing notifies introducing broker-dealers whose introduced accounts have received an allocation. Securities registered in the client’s name, either in transit or held in custody, are excluded from the Pershing lottery process. Pershing initiates the lottery process by identifying the accounts holding the called security, the total par value of the called securities held, and the trading unit of the security.

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Prohibition Against Internet Gambling
In accordance with the Unlawful Internet Gambling Enforcement Act of 2006, transactions associated with unlawful internet gambling are prohibited. The Act prohibits any person engaged in the business of betting or wagering from knowingly accepting payments in connection with the participation of another person in unlawful internet gambling. Accordingly, you must not initiate or receive wire transfers, checks, drafts or other debit/credit transactions that are restricted by the Act. For more information, please refer to federalreserve.gov/newsevents/

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Sponsorship Fees Disclosure
Third-party-product and service providers (e.g. mutual funds, annuity companies, exchange-traded funds [ETFs], money market funds, money managers, technology and business solutions) offer marketing support in the form of sponsorship fee payments to Pershing and Pershing Advisor Solutions (or third parties at Pershing’s direction) in connection with educational conferences, events, seminars and workshops for independent registered investment advisors and advisors in transition. These payments may be for the expenses of educational materials or other event-related expenses. For a listing of companies that pay sponsorship fees to Pershing Advisor Solutions for events, please refer to pershing.com/ria/sponsorship_fees.html.

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Trailing Stop Orders
Trailing stop orders can be triggered by either a transaction or by a National Best Bid/Offer (NBBO) quotation update, and can trail by dollar value or percentage, depending on which option your financial advisor chooses on an order by order basis at the time the order is placed.

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