Common use of PROCEDURES FOR INTRODUCED ACCOUNTS Clause in Contracts

PROCEDURES FOR INTRODUCED ACCOUNTS. A. At the time of the opening of each Introduced Account, the Introducing Broker shall supply to the Clearing Broker a new account form on such forms as the Clearing Broker will supply to the Introducing Broker (unless otherwise mutually agreed by the parties) and shall supply any other additional or supplementary documentation or information that the Clearing Broker may in its sole discretion request the Introducing Broker to obtain from the Customer, including, but not limited to, a cash account agreement on a form approved by the Clearing Broker ("Cash Account Agreement"), and all other documents that the Clearing Broker initially supplied to the Customer. If applicable, the Introducing Broker shall furnish the Clearing Broker with appropriate Alert and/or SID references for the Customer and the Clearing Broker will update such information when updates are received from Alert and/or SID. At the time of the opening of Introduced Accounts that are margin accounts, the Introducing Broker shall furnish the Clearing Broker with executed customer agreements, hypothecation and rehypothecation agreements, and consents to loans of securities on forms to be provided by the clearing broker (collectively, the "Margin Agreement"). If any Introduced Account has been opened without the Clearing Broker having previously received the foregoing information or documents, failure of the Clearing Broker to receive such information or documents shall not be deemed to be a waiver of the information or documentation requirements set forth herein. With respect to each Introduced Account that is a proprietary account, an executed Margin Agreement shall be furnished to the Clearing Broker. In addition, the terms of such Cash Account Agreement or Margin Agreement, as amended from time to time, are incorporated by reference herein. Upon the request of the Clearing Broker, the Introducing Broker shall furnish the Clearing Broker with any other additional or supplementary documents and agreements executed by the Introduced Account on forms supplied by the Clearing Broker that the Clearing Broker may require in connection with the opening, operating or maintaining of Introduced Accounts. The Clearing Broker may, at its option, mail Cash Account Agreements, Margin Agreements or other documentation directly to the Introduced Accounts upon notification by the Introducing Broker. The Introducing Broker shall promptly provide the Clearing Broker with basic data and copies of documents relating to each of the Introduced Accounts, including, but not limited to, copies of records of any receipts of the Introduced Accounts' funds or securities received directly by the Introducing Broker, as shall be necessary for the Clearing Broker to discharge its service obligations hereunder. The Clearing Broker shall provide, upon request, any documentation and agreements related to the opening and maintenance of any Introduced Accounts. B. If the documents necessary to comply with the account documentation requirements of the Rules, Standards and Laws and Regulations have not been received by the Clearing Broker after request has been made therefor, the Clearing Broker shall give the Introducing Broker notification that no orders will be accepted (other than liquidating orders) for the Introduced Account involved. If orders are placed for such account after this notice is given, no commission credit will be granted on such orders. On receipt of the necessary documents, this restriction will be lifted with respect to future commissions, but any commissions withheld will not be credited or paid. This Agreement is not in any way intended to limit the responsibility of the Clearing Broker under the Rules, Standards, Laws and Regulations with respect to Introduced Accounts. Further, acceptance of an order after notification has been given shall not constitute a waiver of the Clearing Broker's right to reject any trade. C. All transactions in any Introduced Account are to be considered cash transactions until such time as the Clearing Broker has received and accepted Margin Agreements, duly and validly executed in respect of such Introduced Account. D. At the time of the opening of any agency Introduced Account, the Introducing Broker shall furnish the Clearing Broker with the name of any principal for whom the agent is acting and written evidence of the agent's authority. E. The Introducing Broker shall be solely and exclusively responsible for approval of all accounts and transactions therein and all similar applicable Rules, Standards, Laws and Regulations and shall specifically approve the opening of any new account before forwarding such account to the Clearing Broker as a potential Introduced Account. F. The Clearing Broker reserves the right to reject any account that the Introducing Broker may tender to the Clearing Broker as a potential Introduced Account. The Clearing Broker also reserves the right to terminate any account previously accepted by it as an Introduced Account. G. The Introducing Broker shall be solely and exclusively responsible for ensuring that its Customers shall not be minors or subject to those prohibitions existing under the Rules, Standards, Laws and Regulations generally relating to the incapacity of any Introduced Account or any conflict of interest relating to such Introduced Account. H. With respect to Introduced Accounts that are margin accounts, the Clearing Broker is responsible for compliance with Regulation T, 12 C.F.R. Part 220, promulgated by the Board of Governors of the Federal Reserve System (the "Board"), and any interpretive ruling issued by the Board, and the letter rulings of the Federal Reserve Bank of New York, Rules and interpretations of the NASD and any other applicable margin and margin maintenance requirements of the Rules, Standards, Laws and Regulations. The Introducing Broker is responsible to the Clearing Broker for the collection of the margin required to support each transaction for, and to maintain margin in, each Introduced Account, in conformity with the above margin and margin maintenance requirements. After such initial margin on each transaction has been received, maintenance margin calls shall be generated by the Clearing Broker and made by the Clearing Broker or by the Introducing Broker at the instructions of

PROCEDURES FOR INTRODUCED ACCOUNTS. A. At the time of the opening of each Introduced Account, the Introducing Broker shall supply to the Clearing Broker a new account form on such forms as the Clearing Broker will supply to the Introducing Broker (unless otherwise mutually agreed by the parties) and shall supply any other additional or supplementary orsupplementary documentation or information that the Clearing Broker may in its sole discretion request the Introducing Broker to obtain from the Customer, including, but not limited to, a cash account agreement on a form approved by the Clearing Broker ("Cash Account Agreement"), and all other documents that the Clearing Broker initially supplied to the Customer. If applicable, the Introducing Broker shall furnish the Clearing Broker with appropriate Alert and/or SID references for the Customer and the Clearing Broker will update such information when updates are received from Alert and/or SID. At the time of the opening of Introduced Accounts that are margin accounts, the Introducing Broker shall furnish the Clearing Broker with executed customer agreements, hypothecation and rehypothecation agreements, and consents to loans of securities on forms to be provided by the clearing broker (collectively, the "Margin Agreement"). If any Introduced Account has been opened without the Clearing Broker having previously received the foregoing information or documents, failure of the Clearing Broker to receive such information or documents shall not be deemed to be a waiver of the information or documentation requirements set forth herein. With respect to each Introduced Account that is a proprietary account, an executed Margin Agreement shall be furnished to the Clearing Broker. In addition, the terms of such Cash Account Agreement or Margin Agreement, as amended from time to time, are incorporated by reference herein. Upon the request of the Clearing Broker, the Introducing Broker shall furnish the Clearing Broker with any other additional or supplementary documents and agreements executed by the Introduced Account on forms form supplied by the Clearing Broker that the Clearing Broker may require in connection with the opening, operating or maintaining of Introduced Accounts. The Clearing Broker may, at its option, mail Cash Account Agreements, Margin Agreements or other documentation directly to the Introduced Accounts upon notification by the Introducing Broker. The Introducing Broker shall promptly provide the Clearing Broker with basic data and copies of documents relating to each of the Introduced Accounts, including, but not limited to, copies of records of any receipts of the Introduced Accounts' funds or securities received directly by the Introducing Broker, as shall be necessary for the Clearing Broker to discharge its service obligations hereunder. The Clearing Broker shall provide, upon request, any documentation and agreements related to the opening and maintenance of any Introduced Accounts. B. If the documents necessary to comply with the account documentation requirements of the Rules, Standards and Laws and Regulations have not been received by the Clearing Broker after request has been made therefor, the Clearing Broker shall give the Introducing Broker notification that no orders will be accepted (other than liquidating orders) for the Introduced Account involved. If orders are placed for such account after this notice is given, no commission credit will be granted on such orders. On receipt of the necessary documents, this restriction will be lifted with respect to future commissions, but any commissions withheld will not be credited or paid. This Agreement is not in any way intended to limit the responsibility of the Clearing Broker under the Rules, Standards, Laws and Regulations with respect to Introduced Accounts. Further, acceptance of an order after notification has been given shall not constitute a waiver of the Clearing Broker's right to reject any trade. C. All transactions in any Introduced Account are to be considered cash transactions until such time as the Clearing Broker has received and accepted Margin Agreements, duly and validly executed in respect of such Introduced Account. D. At the time of the opening of any agency Introduced Account, the Introducing Broker shall furnish the Clearing Broker with the name of any principal for whom the agent is acting and written evidence of the agent's authority. E. The Introducing Broker shall be solely and exclusively responsible for approval of all accounts and transactions therein and all similar applicable Rules, Standards, Laws and Regulations and shall specifically approve the opening of any new account before forwarding such account to the Clearing Broker as a potential Introduced Account. F. The Clearing Broker reserves the right to reject any account that the Introducing Broker may tender to the Clearing Broker as a potential Introduced Account. The Clearing Broker also reserves the right to terminate any account previously accepted by it as an Introduced Account. G. The Introducing Broker shall be solely and exclusively responsible for ensuring that its Customers shall not be minors or subject to those prohibitions existing under the Rules, Standards, Laws and Regulations generally relating to the incapacity of any Introduced Account or any conflict of interest relating to such Introduced Account. H. With respect to Introduced Accounts that are margin accounts, the Clearing Broker is responsible for compliance with Regulation T, 12 C.F.R. Part 220, promulgated by the Board of Governors of the Federal Reserve System (the "Board"), and any interpretive ruling issued by the Board, and the letter rulings of the Federal Reserve Bank of New York, Rules and interpretations of the NASD and any other applicable margin and margin maintenance requirements of the Rules, Standards, Laws and Regulations. The Introducing Broker is responsible to the Clearing Broker for the collection of the margin required to support each transaction for, and to maintain margin in, each Introduced Account, in conformity with the above margin and margin maintenance requirements. After such initial margin on each transaction has been received, maintenance margin calls shall be generated by the Clearing Broker and made by the Clearing Broker or by the Introducing Broker at the instructions ofof the Clearing Broker. The Clearing Broker shall have the absolute right to modify, in its sole discretion, the margin requirements for any Introduced Account or any security position from time to time so that the Clearing Broker may call for additional margin and shall have sole discretion as to the amount of margin to be required of and maintained by Introduced Accounts. I. The Introducing Broker shall be solely and exclusively responsible for the payment and delivery of all "when issued" or "when distributed" transactions that the Clearing Broker may accept, forward, or execute for Introduced Accounts. J. The Introducing Broker agrees that all Customers of the Introducing Broker who engage in DVP transactions (and their agents) will utilize the facilities of a securities depository for the confirmation, acknowledgment, and book entry settlement of all depository eligible transactions, subject to the exceptions to Rules or Standards pertaining to "COD" or "DVP" transactions. K. To facilitate the keeping of records by the Clearing Broker, the Introducing Broker shall turn over promptly to the Clearing Broker any and all payments and securities that the Introducing Broker receives from Customers. Concurrently with the delivery of such payments or securities to the Introducing Broker, it shall furnish the Clearing Broker with such information as may be relevant or necessary to enable the Clearing Broker to record promptly and properly such payments and securities in the respective Introduced Accounts. L. On all Over-the-Counter transactions for Introduced Accounts, the Introducing Broker shall furnish the Clearing Broker with the names of the respective purchasing and selling broker-dealers (except as otherwise provided below), the names of the purchasing and selling Customers, and the wholesale and retail purchase and sale prices. When the selection of the contra broker in an Over-the-Counter transaction is left to the Clearing Broker's discretion, the Clearing Broker will assume responsibility for any failure to pay by the contra broker. When the Introducing Broker executes its own Over-the-Counter order or designates the contra broker, in the event that the Over-the-Counter contra broker fails to perform its part of the transaction, the Introducing Broker will reimburse the Clearing Broker for any loss sustained thereby. The Clearing Broker reserves the right at any time to limit the size of transactions that the Clearing Broker will accept for clearance in these circumstances. The Clearing Broker will give the Introducing Broker reasonable notice (i.e., at least 10 days' notice in most circumstances, 30 days' notice for Credit Committee limitations and whatever notice is possible in the event of regulatory or self-regulatory limitations) of such limitations. If, after the Introducing Broker has received notice of such limitation (whether notice was reasonable or not), the Introducing Broker executes an order in excess of the limit established by the Clearing Broker, the Clearing Broker shall have the right to notify the other party and other dealer that it will not accept the transaction for clearance and settlement. M. The Introducing Broker shall be solely and exclusively responsible for approving all orders for the Introduced Accounts and for establishing procedures to ensure that such approved orders are transmitted properly to the Clearing Broker for execution. The Clearing Broker reserves the right to reject any order that the Introducing Broker may transmit to the Clearing Broker for execution or clearance. N. The Introducing Broker shall be solely and exclusively responsible for the supervisory review of all orders for the Introduced Accounts and shall ensure that any orders and instructions given by it or any of its employees to the Clearing Broker pursuant to the terms of this Agreement shall have been properly authorized in advance. O. The Introducing Broker shall be solely and exclusively responsible for making every reasonable effort to ascertain the essential facts relative to any Introduced Account and any order therefor, in compliance with "know your customer" provisions of the Rules or the Standards, including but not otherwise limited to ascertaining the authority of all orders for Introduced Accounts, and the genuineness of all certificates, papers, and signatures provided by each Introduced Account. Any investment advice furnished to an Introduced Account shall be the sole and exclusive responsibility of the Introducing Broker. P. The Introducing Broker shall be solely and exclusively responsible for review of all Introduced Accounts and for compliance with any supervisory responsibility with respect to the accounts introduced under this Agreement, including but not otherwise limited to matters involving the investment objectives of the Introduced Accounts, the suitability of the investments made by the Introduced Accounts, the reasonable basis for recommendations made to Introduced Accounts, and the frequency of trading in the Introduced Accounts, whether or not such transactions are instituted by the Introducing Broker, its partners, officers, employees or any registered investment adviser. Q. The Introducing Broker shall be solely and exclusively responsible for the handling and supervisory review of any Introduced Accounts over which the Introducing Broker's partners, officers or employees have discretionary authority, and any interpretations thereof and any other applicable Rules, Standards, Laws and Regulations. The Introducing Broker shall furnish the Clearing Broker with such documentation with respect thereto as may be requested by the Clearing Broker. The Introducing Broker hereby warrants that with regard to any orders or instructions given by the Introducing Broker with respect to such discretionary accounts, its partners, officers or employees shall have been fully and properly authorized relative thereto and that the execution of such orders shall not be in violation of the Rules, Standards, Laws and Regulations. R. The Introducing Broker shall be solely and exclusively responsible for the handling and supervisory review of any Introduced Account for an employee or officer of any member organization, self-regulatory organization, bank, trust company, insurance company, or other organization engaged in the securities business, and any other applicable Rules, Standards, Laws and Regulations. The Introducing Broker shall furnish the Clearing Broker with such documentation with respect thereto as may be requested by the Clearing Broker. S. The Introducing Broker shall be solely and exclusively responsible for ensuring that it is authorized to do business in any jurisdiction in which any Introduced Account resides or is domiciled. T. The Introducing Broker shall be solely and exclusively responsible for compliance with any and all disclosure documents and prospectus delivery requirements in connection with Introduced Accounts that are option accounts and with any principal training or registration requirements relating to options trading in Introduced Accounts. U. The Introducing Broker and the Clearing Broker shall each be responsible for the respective compliance of each with any supervisory procedures under Rule 3010 of the NASD Manual, Conduct Rules and, to the extent applicable, any other related provisions of the Rules, Standards, Laws and Regulations including but not otherwise limited to supervising the activities and training of their respective registered representatives, as well as all of their other respective employees in the performance of functions specifically allocated to them pursuant to the terms of this Agreement. V. The Introducing Broker shall be solely and exclusively responsible for sales and purchases for the Introduced Accounts that may create or result in a violation of any of the Rules, Standards, Laws and Regulations. W. The Introducing Broker shall be solely and exclusively responsible for compliance with the Rules, Standards, Laws and Regulations in the same manner and to the same degree as if the Introducing Broker were performing the services for the Introduced Accounts that have been assumed by the Clearing Broker pursuant to this Agreement. X. The Introducing Broker shall be solely and exclusively responsible for compliance with any Rules, Standards, Laws and Regulations concerning transfers of restricted or control securities in Introduced Accounts. Securities delivered to the Clearing Broker on behalf of an Introduced Account for delivery in respect of a sale shall not be in legended form. Y. The Introducing Broker shall be solely and exclusively responsible for compliance with Rule 10b-16 under the 1934 Act; provided, however, that any document provided to Customers in connection therewith shall be approved in writing by the Clearing Broker in advance. Z. In connection with all transactions for Introduced Accounts, the Introducing Broker shall be solely responsible for compliance with all rules relating to the Small Order Execution System ("SOES") of the NASD including, without limitation, prohibitions on proprietary trading and volume restrictions. AA. All transactions heretofore had between the Introducing Broker and the Clearing Broker with respect to orders given by or for the Introduced Accounts and cleared through the Clearing Broker shall be subject to the provisions of this Agreement. BB. For purposes of the Securities and Exchange Commission's financial responsibility rules and the Securities Investor Protection Act, Introducing Broker's customers will be considered customers of Clearing Broker and not customers of Introducing Broker. Nothing herein shall cause Introducing Broker's customers to be construed or interpreted as customers of Clearing Broker for any other purpose, or to negate the intent of any other section of the Fully Disclosed Clearing Agreement, including, but not limited to, the delineation of responsibilities as set forth elsewhere in the Fully Disclosed

PROCEDURES FOR INTRODUCED ACCOUNTS. A. At the time of the opening of each Introduced Account, the Introducing Broker shall supply to the Clearing Broker a new account form on such forms as the Clearing Broker will supply to the Introducing Broker (unless otherwise mutually agreed by the parties) and shall supply any other additional or supplementary orsupplementary documentation or information that the Clearing Broker may in its sole discretion request the Introducing Broker to obtain from the Customer, including, but not limited to, a cash account agreement on a form approved by the Clearing Broker ("Cash Account Agreement"), and all other documents that the Clearing Broker initially supplied to the Customer. If applicable, the Introducing Broker shall furnish the Clearing Broker with appropriate Alert and/or SID references for the Customer and the Clearing Broker will update such information when updates are received from Alert and/or SID. At the time of the opening of Introduced Accounts that are margin accounts, the Introducing Broker shall furnish the Clearing Broker with executed customer agreements, hypothecation and rehypothecation agreements, and consents to loans of securities on forms to be provided by the clearing broker (collectively, the "Margin Agreement"). If any Introduced Account has been opened without the Clearing Broker having previously received the foregoing information or documents, failure of the Clearing Broker to receive such information or documents shall not be deemed to be a waiver of the information or documentation requirements set forth herein. With respect to each Introduced Account that is a proprietary account, an executed Margin Agreement shall be furnished to the Clearing Broker. In addition, the terms of such Cash Account Agreement or Margin Agreement, as amended from time to time, are incorporated by reference herein. Upon the request of the Clearing Broker, the Introducing Broker shall furnish the Clearing Broker with any other additional or supplementary documents and agreements executed by the Introduced Account on forms supplied by the Clearing Broker that the Clearing Broker may require in connection with the opening, operating or maintaining of Introduced Accounts. The Clearing Broker may, at its option, mail Cash Account Agreements, Margin Agreements or other documentation directly to the Introduced Accounts upon notification by the Introducing Broker. The Introducing Broker shall promptly provide the Clearing Broker with basic data and copies of documents relating to each of the Introduced Accounts, including, but not limited to, copies of records of any receipts of the Introduced Accounts' funds or securities received directly by the Introducing Broker, as shall be necessary for the Clearing Broker to discharge its service obligations hereunder. The Clearing Broker shall provide, upon request, any documentation and agreements related to the opening and maintenance of any Introduced Accounts. B. If the documents necessary to comply with the account documentation requirements of the Rules, Standards and Laws and Regulations have not been received by the Clearing Broker after request has been made therefor, the Clearing Broker shall give the Introducing Broker notification that no orders will be accepted (other than liquidating orders) for the Introduced Account involved. If orders are placed for such account after this notice is given, no commission credit will be granted on such orders. On receipt of the necessary documents, this restriction will be lifted with respect to future commissions, but any commissions withheld will not be credited or paid. This Agreement is not in any way intended to limit the responsibility of the Clearing Broker under the Rules, Standards, Laws and Regulations with respect to Introduced Accounts. Further, acceptance of an order after notification has been given shall not constitute a waiver of the Clearing Broker's right to reject any trade. C. All transactions in any Introduced Account are to be considered cash transactions until such time as the Clearing Broker has received and accepted Margin Agreements, duly and validly executed in respect of such Introduced Account. D. At the time of the opening of any agency Introduced Account, the Introducing Broker shall furnish the Clearing Broker with the name of any principal for whom the agent is acting and written evidence of the agent's authority. E. The Introducing Broker shall be solely and exclusively responsible for approval of all accounts and transactions therein and all similar applicable Rules, Standards, Laws and Regulations and shall specifically approve the opening of any new account before forwarding such account to the Clearing Broker as a potential Introduced Account. F. The Clearing Broker reserves the right to reject any account that the Introducing Broker may tender to the Clearing Broker as a potential Introduced Account. The Clearing Broker also reserves the right to terminate any account previously accepted by it as an Introduced Account. G. The Introducing Broker shall be solely and exclusively responsible for ensuring that its Customers shall not be minors or subject to those prohibitions existing under the Rules, Standards, Laws and Regulations generally relating to the incapacity of any Introduced Account or any conflict of interest relating to such Introduced Account. H. With respect to Introduced Accounts that are margin accounts, the Clearing Broker is responsible for compliance with Regulation T, 12 C.F.R. Part 220, promulgated by the Board of Governors of the Federal Reserve System (the "Board"), and any interpretive ruling issued by the Board, and the letter rulings of the Federal Reserve Bank of New York, Rules and interpretations of the NASD and any other applicable margin and margin maintenance requirements of the Rules, Standards, Laws and Regulations. The Introducing Broker is responsible to the Clearing Broker for the collection of the margin required to support each transaction for, and to maintain margin in, each Introduced Account, in conformity with the above margin and margin maintenance requirements. After such initial margin on each transaction has been received, maintenance margin calls shall be generated by the Clearing Broker and made by the Clearing Broker or by the Introducing Broker at the instructions of