Common use of Proprietary Accounts Clause in Contracts

Proprietary Accounts. To facilitate compliance with reserve bank account requirements Correspondent undertakes to promptly identify all proprietary accounts of Correspondent and designate those that are PAB accounts for the purposes of SEC Rule 15c3-3. Additionally, Correspondent agrees to promptly identify all proprietary accounts of any broker or dealer customers of Correspondent that such customers require to be designated as PAB accounts for the purposes of SEC Rule 15c3-3 (such proprietary accounts of Correspondent and its customers “PAB Accounts”). Correspondent represents, warrants and covenants that (1) all cash, securities or other assets in any Correspondent PAB Account shall consist solely of proprietary assets of Correspondent and Correspondent shall at no time permit any customer funds, securities or other assets to be deposited, allocated or transferred to its PAB Account and (2) all cash, securities or other assets in any customer’s PAB Account shall consist solely of proprietary assets of such customer and any such customer shall at no time permit any non-proprietary funds. securities or other assets to be deposited, allocated or transferred to such customer PAB Account. Correspondent acknowledges and agrees that in calculating PAB account reserve requirements pursuant to SEC Rule 15c3-3. Apex may exercise its sole and absolute discretion relative thereto. Correspondent acknowledges that it has been notified and agrees that in the event that Apex permits any deposit required pursuant to Section 9 of this Agreement, or any other security deposit of Correspondent, to be placed in a Correspondent’s PAB Account, such deposit amount may be used by Apex in the ordinary course of its securities business. If Correspondent objects to such use it shall so notify Apex in writing and shall take appropriate steps to prevent such deposit amounts from being deposited in a PAB Account.