
Important Information
about Using Margin
This document is being
furnished to you to provide some basic information about purchasing
securities on margin,
and to alert you to the risks involved with trading securities in a margin
account. Before trading
securities in a margin account, you should carefully review the margin
terms in your account
application and agreement. Please contact your broker dealer regarding
any questions or
concerns you may have with your margin account(s).
When you purchase
securities, you may pay for the securities in full or you may borrow all or
part of the purchase
price from your brokerage firm. If you choose to borrow funds from your
firm, you will open a
margin account with National Financial Services LLC ("NFS"). The
securities in your
accounts are NFS' collateral for the loan to you. If the securities in your
account decline in
value, so does the value of the collateral supporting your loan, and, as a
result, NFS and your broker
dealer can take action, such as issuing a margin call and/or selling
securities or other assets in any
of your accounts held with NFS through your broker dealer, in
order to maintain the
required equity in the account. NFS may also take action to sell securities
or other assets in your
accounts held with NFS and with certain NFS affiliates.
It is important that you
fully understand the risks involved in trading securities on margin.
These risks include the
following:
1) You can lose more
funds than you deposit in the margin account. A decline in the value
of securities you
purchased on margin may require you to provide additional funds or
margin-eligible securities to NFS to
avoid the forced sale of any securities or assets in
your account(s).
2) NFS and your broker
dealer can force the sale of securities or other assets in your account(s). If the equity in
your account falls below the maintenance margin requirement or
NFS' higher
"house" requirement, NFS or your broker dealer can sell the
securities or
other assets in any of your
accounts held at NFS through your broker dealer to cover the
margin deficiency. NFS may
also take action to sell securities or ther assets in your
accounts held with NFS and
certain NFS affiliates. You also will be responsible for any
shortfall in the account after
such a sale, possibly including NFS' and/or your broker
dealer's costs related to
collecting the shortfall.
3) NFS and your broker
dealer can sell your securities or other assets without contacting
you. Some investors
mistakenly believe that a firm must contact them for a margin call
to be valid, and that the
firm annot liquidate securities or other assets in their accounts
to meet the call unless
the firm has contacted them first. This is not the case. Most firms
will attempt to notify their
customers of margin calls, but they are not required to do so.
In addition, even if a
firm has contacted a customer and provided a specific date by
which the customer can meet a
margin call, the firm can still take necessary steps to
protect its financial interests
prior to that date, including immediately selling the
securities without notice to the
customer.
4) You are not entitled
to choose which securities or other assets in your account(s) are
liquidated or sold to meet a
margin call. Because the securities and any other assets in
your account(s) are
collateral for the margin loan, NFS or your broker dealer has the
right to decide which assets
to sell in order to protect its interests.
5) NFS can increase its
"house" maintenance margin requirements at any time and is not
required to provide you advance
notice. These changes in firm policy often take effect
immediately and may result in the
issuance of a maintenance margin call. Your failure to
satisfy the call may cause NFS
or your broker dealer to liquidate or sell securities or any
other assets in your
account(s).
6) You are not entitled
to an extension of time on a margin call. While an extension of time
to meet margin
requirements may be available to customers under certain conditions, a
customer does not have a right
to the extension.
7) Short selling is a
margin account transaction and entails the same risks as described
above. NFS or your broker
dealer can buy in your account securities to cover a short
position without contacting you,
and may use all or any portion of the assets in your
account to make such a
purchase. If the assets in your account are not sufficient to cover
the cost of such a
purchase, you will be responsible for any shortfall, possibly including
NFS
and/or your broker dealer's costs in collecting the shortfall.
8) In addition to market
volatility, the use of bank card, checkwriting and similar features
with your margin account may
increase the risk of a margin call.
Margin credit extended
by National Financial Services LLC, Member NYSE, SIPC or sale
would be unlawful under the
securities laws of such jurisdiction.
Important Information about
Online Account Usage
Use of this site
involves the electronic transmission of personal financial information. Using
this product is consent
to such transmission of this information and terms of the User
Agreement; such consent
is effective at all times when using this site. Usage of this site
constitutes your
agreement to the terms of the User Agreement which can be found in the
Important Legal
Information link.
The services and
products described on this web site are intended to be made available only
to persons in the
United States
,
and the information on this web site is only for such
persons. Nothing on this
web site shall be considered a solicitation to buy or an offer to sell
a security to any person
in any jurisdiction where such offer, solicitation, purchase or sale
would be unlawful under
the securities laws of such jurisdiction.