RBC Insured Deposits Summary of Terms and Conditions

Transcription

1 RBC Insured Deposits Summary of Terms and Conditions A division of RBC Capital Markets, LLC, Member NYSE/FINRA/SIPC.

2 RBC Insured Deposits Summary of Terms and Conditions The following summary provides a general overview of the terms and conditions of RBC Insured Deposits (the Program ), a type of cash sweep option offered to you by RBC Capital Markets, LLC. This summary is provided for your convenience only and must be read in conjunction with the attached terms and conditions. General: Excluding retirement accounts (that is, accounts of any amounts subject to the prohibited transaction provisions of the Internal Revenue Code of 1986, including, but not limited to, an employee benefit plan, as defined in the Employee Retirement Income Security Act of 1974) ( Retirement Accounts ), if you choose to participate in the Program, available cash balances in your account at RBC Capital Markets, LLC ( Account ) are swept on a daily or weekly basis to deposit accounts at various banks ( Program Banks ), including, but not limited to, two RBC Capital Markets, LLC affiliates, RBC Bank Georgia, N.A. and City National Bank (the RBC Affiliate Banks ). If your deposit account balances exceed certain limits, as described herein, additional available cash balances in your Account will be automatically invested in shares of the RBC US Government Money Market Fund (the US Government Fund ) unless you select another available option. The US Government Fund is a money market fund managed by RBC Global Asset Management (U.S.) Inc., an affiliate of RBC Capital Markets, LLC. For Retirement Accounts, available cash balances are swept on a daily basis to deposit accounts at the RBC Affiliate Banks up to the applicable limits of Federal Deposit Insurance Corporation (the FDIC ) insurance coverage, as provided below, and amounts in excess of those limits will be automatically invested in shares of a money market fund which is not affiliated with RBC Capital Markets, LLC (an Unaffiliated Money Market Fund ) unless you select another available option. Your funds are withdrawn from the Program as needed to satisfy your purchases of securities and other debits in your Account. Please refer to Section II of the terms and conditions for more information regarding the operation of the Program. Based on the total amount of FDIC insurance coverage available through the Program, RBC CM has established a limit on the amount of your available cash balances that will be deposited in each Program Bank (the Deposit Threshold ). Interest: Your funds will earn interest while in the deposit accounts at the Program Banks. The interest rate you earn on deposits will vary and is described in more detail in Section III of the terms and conditions. At any time, you may look up the rate of interest earned by your funds in the deposit accounts through your online Account access. Please refer to Section XII of the terms and conditions for the website applicable to your Account. FDIC Deposit Insurance Coverage: Your funds in the deposit accounts at the Program Banks will be eligible for insurance by the FDIC up to $250,000 per depositor, subject to aggregation with all other deposits held by you in the same insurable capacity at each Program Bank. Based on the number of Program Banks, the Program is intended to provide you with potential FDIC deposit insurance coverage of up to $5,000,000 ($10 million for accounts held jointly by two or more persons) per depositor, per insurable capacity (the Total Program Coverage ), though the Total Program Coverage is subject to change as further described below. Deposit accounts in Accounts you hold in the same insurable capacity (e.g., individual, joint, IRA, etc.) will be aggregated for purposes of the Total Program Coverage. FDIC Deposit Insurance Coverage for Retirement Accounts: Cash balances in Retirement Accounts will be deposited up to $249,000 with each of the RBC Affiliate Banks, for a total of $498,000 in FDIC insurance coverage ( Retirement Account Coverage ) unless you elect to designate one or both of the RBC Affiliate Banks as ineligible to receive your funds, in which case the applicable Retirement Account Coverage will be reduced by $249,000 for each RBC Affiliate Bank you designate as ineligible. The Retirement Account Coverage is based on the deposit capacity of the RBC Affiliate Banks. The Total Program Coverage is based on the deposit capacity of the available Program Banks and the number of Program Banks, if any, you have designated as ineligible to receive your funds. Please refer to Section II of the terms and conditions for more information on the Total Program Coverage and factors that may impact it. FDIC insurance protects your funds in the deposit accounts in the event of the failure of any of the Program Banks. Any other deposits you may hold at any of the Program Banks will reduce the FDIC insurance coverage available for your funds in the Program, so you should monitor any such holdings carefully. You are responsible for monitoring the total amount of deposits that you have with each Program Bank in order to determine the extent of FDIC deposit insurance coverage available to you. Please refer to Section V of the terms and conditions for more information on FDIC insurance. Funds in Excess of the Total Program Coverage: If your deposit account balances in the Program reach the Total Program Coverage, funds in excess of the Total Program Coverage will be automatically invested in shares of the US Government RBC CAPITAL MARKETS, LLC, MEMBER NYSE/FINRA/SIPC Page 1 of 14

3 Fund unless you select another available option. Please see the Automated Sweep Investment section of the Client Account Agreement for more information regarding investments in the US Government Fund. Investments in the US Government Fund are not covered by FDIC insurance. However, shares of the US Government Fund held in your Account are covered by the Securities Investor Protection Corporation (SIPC) up to applicable limits. You may access the most recent US Government Fund prospectus by accessing Please refer to Section II of the terms and conditions for more information. Funds in Excess of the Retirement Account Coverage for Retirement Accounts: For Retirement Accounts, account balances in excess of the Retirement Account Coverage amount will be automatically invested in shares of an Unaffiliated Money Market Fund. Investments in an Unaffiliated Money Market Fund are not covered by FDIC insurance. However, shares of the Unaffiliated Money Market Fund are covered by SIPC up to applicable limits. You may access the most recent applicable Unaffiliated Money Market Fund prospectus by contacting your investment professional. Other Information: You should review the entire attached terms and conditions carefully for additional information regarding the Program, including how to obtain information about SIPC coverage (Section VI), a description of the fees paid to RBC Capital Markets, LLC, or other parties under the Program (Section VII), and benefits that RBC Capital Markets, LLC and its affiliated Program Banks receive through the Program (Section VIII). RBC Insured Deposits Terms and Conditions I. INTRODUCTION AND OVERVIEW RBC Insured Deposits (the Program ) is offered as a cash sweep option for eligible accounts. Eligible accounts (the Accounts ) are those opened directly with RBC Capital Markets, LLC, including its RBC Wealth Management division; accounts opened through broker-dealers for which the RBC Correspondent Services division of RBC Capital Markets, LLC acts as clearing broker; and accounts for which the RBC Advisor Services division of RBC Capital Markets, LLC provides custody and execution services for the clients of third party investment advisors (RBC Capital Markets, LLC and its divisions are collectively referred to as RBC CM ). The Program automatically deposits available cash balances in the Accounts into interest bearing Federal Deposit Insurance Corporation ( FDIC ) insured deposit accounts (the Deposit Accounts ) established by RBC CM at certain eligible depository institutions (the Program Banks ), including, but not limited to, two RBC CM affiliated Program Banks, RBC Bank Georgia, N.A. ( RBC Bank ) and City National Bank ( City National ). Clients of introducing brokers that clear transactions through RBC Correspondent Services or clients of RBC Advisor Services may be directed to a different group of Program Banks. Additional disclosure on the participating Program Banks will be made, as required, to these clients. Program Bank participation, including that of our affiliated Program Banks, RBC Bank and City National, will be subject to each Program Bank s eligibility to participate in the Program. A list of the names and location of the Program Banks will be provided through your online Account access on the website you use to access your Account information. For a list of the applicable website addresses, please see Section XII of these terms and conditions. Accounts subject to the prohibited transaction provisions of the Internal Revenue Code of 1986, including an employee benefit plan as defined in the Employee Retirement Income Security Act of 1974, ( Retirement Accounts )participating in the Program will have cash balances directed to only RBC CM affiliate banks, RBC Bank and City National. Your funds in the Deposit Accounts at the Program Banks will be insurable by the FDIC up to $250,000 per depositor, subject to aggregation with all other deposits held by you in the same insurable capacity at each Program Bank. You should read carefully the section of this document titled FDIC Deposit Insurance Coverage, which describes the amount of coverage that may be available to you. These terms and conditions regarding the Program supplement the Client Account Agreement that governs your Account(s). For purposes of these terms and conditions, we or our refers to RBC CM or one of its divisions, and you and your refer to the client. Please see your Client Account Agreement for additional provisions regarding governing law, arbitration, and other important provisions. The Client Account Agreement governs your relationship with RBC CM, except that in the event of a conflict with these terms and conditions, these terms and conditions will control. If your Account was opened through the RBC Correspondent Services division, you may be subject to a different or additional client account agreement between you and the introducing broker. RBC CAPITAL MARKETS, LLC, MEMBER NYSE/FINRA/SIPC Page 2 of 14

4 II. HOW THE PROGRAM WORKS A. ELIGIBILITY AND WITHDRAWAL FROM THE PROGRAM The Program is available to individuals, trusts (so long as all beneficiaries of the trust are eligible), and entities organized to make a profit, such as corporations, partnerships, associations, business trusts, and other organizations ( For Profit Entities ). Custodial accounts are eligible for the Program if each beneficiary is eligible. Please consult your investment professional for details concerning eligibility. RBC CM may in its discretion deem a person to be ineligible for the Program if it becomes aware that the person is prohibited by banking regulations from participating in the Program. RBC CM or you may, in its or your sole discretion, terminate your participation in the Program. Please see section XI of the terms and conditions and your Client Account Agreement for additional information about changing cash sweep options. B. GENERAL OPERATION Under the Program, RBC CM has established Deposit Accounts consisting of (1) a transaction account, which includes either a negotiable order of withdrawal account or a demand deposit account (the negotiable order of withdrawal account and demand deposit account are collectively referred to herein as Transaction Account ), and (2) a related money market deposit account ( MMDA ) at each Program Bank. Upon your election of the Program and after we complete our normal processing of your request, available cash balances in your Account will be automatically deposited into Deposit Account(s) at one or more of the Program Banks. Unless your Account is a Standard Account or Standard Checking Account, available cash balances will be swept to Deposit Accounts on a daily basis. Based on the total amount of FDIC insurance coverage available through the Program, RBC CM has established a limit on the amount of your available cash balances that will be deposited in each Program Bank (the Deposit Threshold ). The current Deposit Threshold for each client at each Program Bank is $249,000 for Deposit Accounts held individually and IRAs, and $498,000 for Deposit Accounts held jointly by two or more persons. All Deposit Accounts established for trust accounts will be treated by RBC CM as individual accounts for purposes of applying the Deposit Threshold. If the Maximum Applicable Deposit Insurance Limit (as defined in Section V, FDIC Deposit Insurance Coverage ) changes, RBC CM may change the Deposit Threshold without prior notice to you. You will be informed of such change through a confirming letter, an entry on your RBC CM account statement or by other means. If a change to the Deposit Threshold results in your Deposit Account balances at a Program Bank exceeding the new Deposit Threshold, amounts over the new Deposit Threshold will be withdrawn from your Deposit Accounts at that Program Bank and deposited into Deposit Accounts at other available Program Banks in accordance with order of priority set forth below. C. DEPOSIT PROCEDURES When cash becomes available in your Account for reasons such as a deposit of funds, dividend and interest payments, or the sale of a security, RBC CM, as your agent, will deposit your available cash balances at the Program Banks in the order of priority set forth below. Please note, the order of priority applicable to Accounts owned by For Profit Entities differs from the order of priority for all other Accounts. The order of priority for Retirement Accounts will also differ as deposits are only allocated to RBC CM affiliated Program Banks, RBC Bank and City National. Deposits will generally be made into the MMDA at a Program Bank. However, we may make deposits into the Transaction Account at a Program Bank as described below under Withdrawal Procedures. Each Program Bank may, in its discretion, determine a minimum amount to be maintained in the Transaction Account at the Program Bank to satisfy debits in your Account, and funds may be transferred from the MMDA at the Program Bank to the related Transaction Account to maintain the minimum balance. Transfers from the MMDA to the Transaction Account and withdrawals from the Transaction Account and MMDA are discussed below under Withdrawal Procedures. If, as a result of credited interest on your Deposit Accounts at a Program Bank, your Deposit Account balances at that Program Bank exceed the Deposit Threshold, amounts over the Deposit Threshold will be withdrawn from your Deposit Accounts at that Program Bank and deposited into Deposit Accounts at other available Program Banks up to the Deposit Threshold at each Program Bank in the order of priority set forth below. Order of Priority for Deposits. For Accounts not owned by For Profit Entities, deposits will first be made into Deposit Accounts established at the two RBC CM affiliated Program Banks, RBC Bank and City National, up to the Deposit Threshold at each affiliated Program Bank. Next, for Accounts other than Retirement Accounts, additional available cash balances will be deposited into Deposit Accounts at unaffiliated Program Banks with committed deposit balances (as described below) up to the Deposit Threshold at each Program Bank. Finally, RBC CAPITAL MARKETS, LLC, MEMBER NYSE/FINRA/SIPC Page 3 of 14

5 additional available cash balances will be deposited into Deposit Accounts at other unaffiliated Program Banks up to the Deposit Threshold at each Program Bank by applying a nondiscretionary algorithm for allocating deposits. For Accounts owned by For Profit Entities, deposits will first be made into Deposit Accounts at unaffiliated Program Banks with committed deposit balances (as described below) up to the Deposit Threshold at each Program Bank. Next, additional available cash balances will be deposited into Deposit Accounts at other unaffiliated Program Banks up to the Deposit Threshold at each Program Bank by applying a nondiscretionary algorithm for allocating deposits. Available cash balances in Accounts owned by For Profit Entities will not be deposited into Deposit Accounts at affiliated Program Banks. For Retirement Accounts, available cash balances are swept only to Deposit Accounts at RBC affiliated Program Banks, RBC Bank and City National, up to the applicable Deposit Thresholds. Pursuant to the priority order of Program Banks described above, your deposits may be allocated to one or more Program Banks. If the current deposit capacity of a Program Bank is less than the Deposit Threshold, deposits will be made into Deposit Accounts up to the Program Bank s current deposit capacity. As a result, your Deposit Account balances at a Program Bank may not reach the Deposit Threshold before deposits are made into Deposit Accounts at the next Program Bank in the order of priority. You may have Deposit Account balances at multiple Program Banks even if your total Deposit Account balances through the Program are less than the Deposit Threshold. Program Banks with Committed Deposit Balances. RBC CM may enter into agreements with certain Program Banks that establish committed deposit balances. In such instances, RBC CM will deposit your available cash balances into Deposit Accounts at these Program Banks to meet their committed deposit balances before depositing your available cash balances into Deposit Accounts at Program Banks that have not established committed deposit balances. A Program Bank receiving these deposits may pay a higher fee to RBC CM. The committed deposit balances will have no impact on your ability to withdraw funds from your Account. RBC CM may be required to pay Program Banks a fee in the event that a committed deposit balance is not maintained for a specified period of time. RBC CM will bear sole responsibility for paying any such fee, and you will not be charged any additional fee. Nondiscretionary Algorithm for Allocating Deposits. Excluding Retirement Accounts, which will only have deposits directed to affiliated Program Banks, RBC Bank and City National, and deposits to Program Banks with committed deposit balances, the Program uses an algorithm licensed from a third party to allocate deposits among the remaining Program Banks so as to maximize potential FDIC insurance coverage of your Deposit Accounts. The algorithm is mathematical and nondiscretionary, and allocates deposits to Program Banks based on each Program Bank s current deposit balances compared to such Program Bank s target deposit balances, without regard to rates or fees. Program Banks with smaller percentages of their targets are filled before Program Banks with higher percentages of their targets are filled, taking into consideration the account type (accounts that can be aggregated and those that cannot be) and opt out information at the account level (since you may opt out of Program Banks). The algorithm allocates deposits to each Program Bank based upon a minimum, maximum and target balance set by each Program Bank. Excluding Retirement Accounts, once available cash balances from an Account are deposited into Deposit Accounts at a particular Program Bank, the algorithm will reallocate those deposits to other Program Banks when (1) you designate a Program Bank as ineligible or a Program Bank ceases to participate in the Program; (2) a Program Bank changes its target balance; (3) the Program allocates deposits among Program Banks to meet maximum and target balances set by the Program Banks; (4) funds are moved from a Program Bank to avoid exceeding restrictions under applicable law on the maximum number of automated withdrawals that can be made during any month. Total Program Coverage. Excluding Retirement Accounts, based on the number of Program Banks, the Program is intended to provide you with potential FDIC deposit insurance coverage of up to $5,000,000 ($10 million for accounts held jointly by two or more persons) per depositor, per insurable capacity (the Total Program Coverage ), though the Total Program Coverage is subject to change as further described below. Deposit Account balances in Accounts you hold in the same insurable capacity (e.g., individual, joint, IRA, etc.) will be aggregated for purposes of the Total Program Coverage. The Total Program Coverage is based on the deposit capacity of the available Program Banks and the number of Program Banks, if any, you have designated as ineligible to receive your funds. In the event one or more Program Banks are no longer willing or able to accept deposits, the Total Program Coverage may be reduced. Therefore, the Total Program Coverage for your Deposit Accounts will be the lesser of $5,000,000 ($10 million for accounts held RBC CAPITAL MARKETS, LLC, MEMBER NYSE/FINRA/SIPC Page 4 of 14

6 jointly by two or more persons) or the current deposit capacity of the Program Banks available to accept your funds, up to a maximum of $249,000 per Program Bank ($498,000 for accounts held jointly by two or more persons). If you designate a Program Bank as ineligible to receive your funds, the Total Program Coverage available on your Deposit Accounts will be determined by the current deposit capacity of the Program Banks you have not designated as ineligible, up to $249,000 ($498,000 for accounts held jointly by two or more persons) per Program Bank. We will provide you with notice of a change in the Total Program Coverage due to Program Bank capacity constraints. You will be informed of such change by letter, an entry on your RBC CM account statement or by other means. Retirement Account Coverage. Cash balances in Retirement Accounts will be deposited only with RBC Bank and City National up to the Deposit Threshold at each affiliate bank and will be eligible for up to $498,000 of FDIC insurance coverage ( Retirement Account Coverage ), provided you do not designate one or both of RBC Bank and/ or City National as ineligible to receive your funds. Funds in Excess of the Total Program Coverage. If your Deposit Account balances at the Program Banks reach the Total Program Coverage, additional available cash balances will be automatically invested in shares of the US Government Fund. If, as a result of credited interest on your Deposit Accounts, your Deposit Account balances at all of the Program Banks exceed the Total Program Coverage (as defined below), amounts over the Total Program Coverage will be withdrawn and automatically invested in shares of the US Government Fund. For Retirement Accounts, balances in excess of the Retirement Account Coverage will be automatically invested in shares of a money market fund not affiliated with RBC CM (an Unaffiliated Money Market Fund ). Investments in the US Government Fund and an Unaffiliated Money Market Fund are not covered by FDIC insurance. However, shares of the US Government Fund and an Unaffiliated Money Market Fund held in your Account are covered by Securities Investor Protection Corporation (SIPC) up to applicable limits. Please see the Automated Sweep Investment section of the Client Account Agreement for more information regarding the operation of your investment in the US Government Fund or an Unaffiliated Money Market Fund and how the appropriate share class of the US Government Fund is determined for your Account(s). You may access the most recent US Government Fund prospectus by accessing Allocation Methodology for Multiple Accounts Held in the Same Insurable Capacity. As noted above, Deposit Account balances in Accounts you hold in the same insurable capacity (e.g., individual, joint, IRA, etc.) will be aggregated for purposes of the Total Program Coverage. If you have two or more Accounts in the same insurable capacity, RBC will utilize an allocation methodology to determine the amount of each Account s Program balances that will be deposited in Deposit Accounts at the Program Banks and will be invested in shares of the US Government Fund, or, in the case of Retirement Accounts, an Unaffiliated Money Market Fund, on any business day on which any of the Accounts has available cash balances to be swept and your Deposit Account balances have reached, or would reach as a result of the deposit of the available cash balances, the Total Program Coverage. The application of this allocation methodology will result in each Account having shares of US Government Fund or, where applicable, each Retirement Account having shares of an Unaffiliated Money Market Fund that reflects the Program balance in the Account as a percentage of the aggregate Program balances for all Accounts, after accounting for the day s activity. Please note, the allocation methodology will not be applied on any business day on which the sole activity in the Accounts are withdrawals. As a result, if withdrawals in one or more Accounts on any business day reduce the total Deposit Account balances below the Total Program Coverage, we will not liquidate shares of the US Government Fund or an Unaffiliated Money Market Fund and deposit the funds in Deposit Accounts in order to bring the total Deposit Account balances up to the Total Program Coverage. Funds will be deposited in Deposit Accounts only on business days on which any of the Accounts has available cash balances to be swept and the Total Program Coverage has not been reached. In order for each Account to have shares of the US Government Fund or an Unaffiliated Money Market Fund that reflect the Program balance in the Account as a percentage of the aggregate Program balance for all Accounts, we may be required to withdraw funds that were on deposit at a Program Bank from your Deposit Accounts held through one or more Accounts and invest those funds in shares of the US Government Fund or an Unaffiliated Money Market Fund. The following example illustrates the allocation methodology. In this example, the customer holds three Accounts in an individual insurable capacity, with the following balances: RBC CAPITAL MARKETS, LLC, MEMBER NYSE/FINRA/SIPC Page 5 of 14

7 Account Account #1 $3,000,000 Account #2 $1,000,000 Account #3 $1,000,000 Deposit Account Balances $5,000,000 On the next business day, Account #1 has a deposit of $100,000, Account #2 has a withdrawal of $50,000, and Account #3 has a deposit of $65,000. Taking into account the results of that day s activity, the allocation methodology will determine each Account s percentage share of the aggregate Program balances by dividing the Account s Program balance by the aggregate Program balances of all Accounts. This percentage will then be used to determine the amount of shares of the US Government Fund to be purchased by the Account so that the Account has shares of the US Government Fund that reflect the Program balance in the Account as a percentage of the aggregate Program balance for all Accounts. Aggregate Program Balances Including Daily Activity Percentage Share of Total Program Balances Account #1 $3,100, % $69, Account #2 $950, % $21, Account #3 $1,065, % $23, $5,115, % $115,000 Per-Account Allocation to US Government Fund In this example, the allocation methodology would require us to withdraw $21, from Deposit Account balances in Account #2 and invest those funds in shares of the US Government Fund. Aggregate Program Balances Including Daily Activity Per Account Allocation to US Government Fund Amount Withdrawn from Deposit Accounts and Invested in US Government Fund Shares Deposit Account Balances after Allocation to US Government Fund Account #1 $3,100,00 $69, $3,030, Account #2 $950,000 $21, $21, $928, Account #3 $1,065,000 $23, $1,041, $5,115,000 $115,000 21, $5,000,000 Please note that this allocation methodology will not be applied on any business day on which the sole activity in the Accounts are withdrawals. As a result, if withdrawals in one or more Accounts on any business day reduce the total Deposit Account balances below the Total Program Coverage, we will not liquidate shares of the US Government Fund and deposit the funds in Deposit Accounts in order to bring the total Deposit Account balances up to the Total Program Coverage. Funds will be deposited in Deposit Accounts only on business days on which any of the Accounts has available cash balances to be swept and the Total Program Coverage has not been reached. Designating Program Banks or the US Government Fund as Ineligible to Receive Your Funds. You may at any time designate a Program Bank as ineligible to receive your funds. In addition, you may at any time instruct us to remove your funds from a Program Bank and designate the Program Bank as ineligible to receive future deposits. Please allow five business days to process your request. Unless you direct us to place your funds in a different investment, your funds will be deposited in Deposit Accounts at other available Program Banks in accordance with the order of priority set forth above. You may not designate all of the Program Banks as ineligible to receive your funds. Please note, designating a Program Bank as ineligible to receive your funds will reduce the Total Program Coverage for your Deposit Accounts. You may at any time designate the US Government Fund or an Unaffiliated Money Market Fund as ineligible to receive your funds. Please allow five business days to process your request. If you designate the US Government Fund or an Unaffiliated Money Market Fund as ineligible to receive your funds and you do not direct us to place your funds in a different investment, available cash balances in excess of the Total Program Coverage or Retirement Account Coverage will remain in the Program and be allocated to a Program Bank and may not be fully covered by FDIC insurance. If you wish to designate a Program Bank or the US Government Fund or Unaffiliated Money Market Fund as ineligible to receive your funds, please contact your investment professional. RBC CAPITAL MARKETS, LLC, MEMBER NYSE/FINRA/SIPC Page 6 of 14

8 IMPORTANT: Certain transfers into the Program will NOT be covered by FDIC insurance until the following business day: 1. If you change your cash sweep option from a money market fund cash sweep option or RBC Cash Sweep to the Program, the money market fund shares plus accrued dividends or deposit balances plus accrued interest will be redeemed or withdrawn and the total proceeds will be placed into your Account on the transaction date. However, the funds will not be deposited in Deposit Accounts at the Program Banks until the following business day with the result that the funds will be covered only by SIPC until the funds are deposited in the Deposit Accounts. 2. If the Program is your cash sweep option and you transfer funds to your Account using a Letter of Authorization, those funds will be placed into your Account on the transaction date. However, the funds will not be deposited in Deposit Accounts at the Program Banks until the following business day with the result that the funds will be covered only by SIPC until the funds are deposited in the Deposit Accounts In both of the above cases, the amounts in the Program will begin accruing interest at the appropriate Program interest rate on the transaction date (the date the funds are deposited into your Account). Interest will accrue up to, but not including, the day on which funds are withdrawn from the Deposit Accounts. Funds in the DBTCA settlement account representing amounts that are in transit to or from the Deposit Accounts and your Account are not subject to the Deposit Threshold. This means that your funds in the DBTCA settlement account may exceed the Maximum Applicable Deposit Insurance Limit until such time as the funds clear. Available cash balances in your Accounts are also not covered by FDIC deposit insurance but instead are considered covered only under the SIPC as a cash balance. See Section VI, SIPC Protection, for further information. D. WITHDRAWAL PROCEDURES A debit in your Account may result for many reasons, including but not limited to, the following examples: you make a securities purchase or, if your Account has such services, you write a check, withdraw funds or make purchases using your debit card, or make payments pursuant to bill payment services. If the available cash balances in your Account are insufficient to satisfy a debit, funds will be withdrawn in the order set forth in your Client Account Agreement. With respect to all Accounts except those owned by For Profit Entities and Retirement Accounts, funds will be withdrawn from the Program in the following order: If you have funds in excess of the Total Program Coverage invested in the US Government Fund, shares in the US Government Fund will be redeemed to satisfy a debit in your Account before funds are withdrawn from the Deposit Accounts. If you do not have funds in excess of the Total Program Coverage invested the US Government Fund, or those funds are insufficient to satisfy the debit in your Account, funds will be withdrawn from Deposit Accounts at unaffiliated Program Banks. If there are insufficient funds in Deposit Accounts at unaffiliated Program Banks, funds will be withdrawn from Deposit Accounts at the RBC CM affiliated Program Banks. With respect to Accounts owned by For Profit Entities, funds will be withdrawn from the Program in the following order: If you have funds in excess of the Total Program Coverage invested in the US Government Fund, shares in the US Government Fund will be redeemed to satisfy a debit in your Account before funds are withdrawn from the Deposit Accounts.. If you do not have funds in excess of the Total Program Coverage invested the US Government Fund, or those funds are insufficient to satisfy the debit in your Account, funds will be withdrawn from Deposit Accounts at unaffiliated Program Banks. With respect to all Retirement Accounts, funds will be withdrawn from the Program in the following order: If you have funds in excess of the Retirement Account Coverage invested in an Unaffiliated Money Market Fund, shares in the Unaffiliated Money Market Fund will be redeemed to satisfy a debit in your Account before funds are withdrawn from the Deposit Accounts. If you do not have funds in excess of the Retirement Account Coverage invested in an Unaffiliated Money RBC CAPITAL MARKETS, LLC, MEMBER NYSE/FINRA/SIPC Page 7 of 14

9 Market Fund, funds will be withdrawn from Deposit Accounts at the RBC Affiliate Banks, RBC Bank and City National. For withdrawals from Deposit Accounts, we may make withdrawals to satisfy debits in your Account from an MMDA or Transaction Account at a Program Bank, and such withdrawals may be instructed by a messenger. We have established the MMDA and Transaction Account at each Program Bank to satisfy certain federal banking limitations on withdrawals from MMDAs. We may transfer your funds in the Program during a given month from the MMDAs to the Transaction Accounts at the Program Banks to comply with these limits and to administer the Program. These limits on MMDA transfers from the Program Banks will not limit the number of withdrawals from the Deposit Accounts at the Program Banks we may make on your behalf, the interest rate you earn, or the amount of FDIC insurance coverage for which you are eligible. As required by federal banking regulations, the Program Banks reserve the right to require seven (7) days prior notice before permitting a transfer of funds out of a negotiable order of withdrawal account or MMDA. While the Program Banks have indicated that they have no present intention of exercising their right to require such notice, the Program Banks may exercise this right at any time in their sole discretion. In the event that RBC CM has extended or provided funds to you in connection with your request to withdraw all or a portion of funds from the Program, such funds are extended or provided to you with the express understanding and agreement that RBC CM shall have full rights of offset for the entire amount of such funds advanced to you to the extent that the transfer of such funds to RBC CM, out of one or more Deposit Accounts maintained by RBC CM on behalf of its clients, was not completed prior to the failure of a Program Bank. In the unlikely event of the failure of a Program Bank where such Deposit Accounts are transferred to another insured depository institution in connection with the resolution of the failed Program Bank, to the extent that RBC CM has advanced funds to you pursuant to a withdrawal of funds from the Program and the transfer of such funds out of the subject account to RBC CM was not completed prior to the failure of the failed Program Bank, you hereby acknowledge, agree and consent to the right of RBC CM to withdraw the full amount of the funds previously provided to you by RBC CM from the Deposit Account transferred to the successor institution. In an event involving either the liquidation of a failed Program Bank or circumstances in which a portion of your deposit was not paid out in connection with the failure of a Program Bank, you hereby acknowledge, agree and consent to the full repayment to RBC CM of any amounts extended or provided to you where the transfer of such funds out of the Deposit Account to RBC CM was not completed prior to the failure of the Program Bank. Although Deposit Account balances in Accounts you hold in the same insurable capacity (e.g., individual, joint, IRA, etc.) will be aggregated for purposes of the Total Program Coverage, withdrawals to satisfy debits in an Account will not be made from Deposit Account balances in other Accounts you hold in the same insurable capacity, or from shares of the US Government Fund or an Unaffiliated Money Market Fund held through other Accounts you hold in the same insurable capacity, except as set forth in your Client Account Agreement. RBC CAPITAL MARKETS, LLC, MEMBER NYSE/FINRA/SIPC Page 8 of 14

10 III. INTEREST ON THE DEPOSIT ACCOUNTS AND YIELDS ON THE US GOVERNMENT FUND A. INTEREST RATE SEGMENTS 1. Direct Clients of RBC Wealth Management The interest rates on the Deposit Accounts will be tiered. Clients qualify for a particular interest rate based on the total assets in Accounts held at RBC Wealth Management ( RBC WM ) or the total commissions and fees paid from the client s Accounts to RBC WM over the previous 12 months, aggregated by household. Clients with greater total household assets or commissions/fees may qualify for higher rates than clients with lower total household assets or commissions/fees. In determining household values, RBC WM takes into consideration multiple pieces of client information, including street address, tax ID, last name, telephone number, zip code and account type to determine householding of Accounts. RBC WM reserves the right to modify how it households Accounts and the right to amend the definition of eligible assets, commissions/fees. The following total household asset and twelve-month trailing commission and fee levels will determine a client s interest rate: Interest Rate Segment Total Household Assets -or- 12-Month Trailing Commissions 1 $5,000,000 or more $50,000 or more 2 $1,000,000 $4,999,999 $10,000 $49,999 3 Under $999,999 Under $10,000 Employees of RBC Capital Markets and its affiliates who hold Accounts at RBC Capital Markets are eligible for Interest Rate Segment 1 of the Program. Eligibility for a Higher Interest Rate Segment: Existing Client Accounts. On a monthly basis, RBC WM will review a client s total household assets and trailing twelve-month commissions and fees to determine if the client is eligible for a higher interest rate segment. If the client is eligible for a higher interest rate segment, the interest rate segment will automatically be changed to the eligible segment (for example, move from Interest Rate Segment 3 to Interest Rate Segment 2). New Client Accounts. All new Accounts that select the Program will be automatically assigned to the Interest Rate Segment 3. During the monthly review process outlined previously, any Accounts that are eligible for a higher interest rate segment will be automatically changed to the eligible segment. Disqualification: On an annual basis, RBC WM will review a client s total household assets and trailing twelve-month commissions and fees to determine if the client is still eligible for his current interest rate segment. If the client has experienced a reduction in household assets or commissions and fees, and is no longer eligible for his current interest rate segment, the client s interest rate segment will be changed to the highest interest rate segment for which the client is eligible. If this is the case, the client will receive a 30-day advance written notice and will have the opportunity to increase his assets at RBC WM in order to maintain his current segment. If the client is unable to increase his assets, his interest rate segment will be changed to the highest interest rate segment for which he is eligible. 2. Retirement Accounts Retirement accounts will earn an interest rate equal to segment Clients of Introducing Brokers that Clear Transactions through RBC Correspondent Services Clients of introducing brokers that clear transactions through RBC Correspondent Services will be placed in an interest rate segment designated by RBC Correspondent Services. Certain introducing brokers may utilize a separate interest rate schedule and if this is the case you will, if necessary, receive an additional disclosure document that describes the separate interest rate schedule. At any time, you may look up the rate of interest earned by your deposit balances in the Deposit Accounts by accessing your appropriate Account website. (See Section XII of these terms and conditions). 4. Clients of RBC Advisor Services Clients of RBC Advisor Services will be placed in an interest rate segment designated by RBC Advisor Services. At any time, you may look up the rate of interest earned by your deposit balances in the Deposit Accounts by accessing your appropriate Connect Website. (See Section XII of these terms and conditions). RBC CAPITAL MARKETS, LLC, MEMBER NYSE/FINRA/SIPC Page 9 of 14

11 B. INTEREST RATES ON THE DEPOSIT ACCOUNTS Deposit balances in the MMDA and Transaction Account at each Program Bank will earn the same rate of interest. Interest rates on the Transaction Account and the MMDAs are variable and subject to change without notice. The Program Banks determine the interest rate earned on balances in the Deposit Accounts. RBC CM then determines its fee and the resulting rate paid to you for your Account balances in the Program. The Program Banks generally set their rates on a monthly basis, but may set the rate more or less frequently. The rate is generally based on a variety of factors including, but not limited to, current market conditions and competitive rates. The interest rate you ultimately receive will be determined by RBC CM based upon the rate the Program Banks pay on the Deposit Accounts and the fees paid to RBC CM, DBTCA and other parties as determined by RBC CM and DBTCA, respectively, as set forth below in Section VII Fees to RBC CM and Other Parties. Funds deposited into Deposit Accounts at a Program Bank will begin to accrue interest on the business day of receipt by the Program Bank up to but not including the day of withdrawal. Interest will be accrued daily and credited monthly to the Deposit Accounts at a Program Bank. Interest will be credited on or about the 26th day of each month. Interest will also be credited on the date that a Deposit Account is closed. The Program Banks use the daily balance method to calculate interest on the Deposit Accounts. This method applies a daily periodic rate to the principal in the Deposit Accounts each day. The interest rates you receive on your funds in the Deposit Accounts may be higher or lower than the interest rates available on other deposit accounts offered by a Program Bank or on deposit accounts offered by other depository institutions or on any money market funds you may have previously designated as your cash sweep option pursuant to your Client Account Agreement. You should compare the terms, interest rates, required minimum amounts, and other features of the Deposit Accounts with other deposit accounts and alternative cash sweep options. You may obtain information with respect to the current Program interest rates and interest rate segments by contacting your investment professional or consulting your appropriate Connect Website. RBC CM and the Program Banks reserve the right to change the interest rates and interest rate segments, which, from time to time, could result in there being no difference between the interest rates for the different segments. By participating in the Program, you are approving the interest rates credited on your deposits. Interest rates paid on your Account balances in the Program are ultimately determined by RBC and DBTCA and may fluctuate. The interest rate payable to you is based on the interest rate paid by the Program Bank, less the fee paid to DBTCA and RBC CM. Such fees paid to DBTCA and RBC CM by each Program Bank are determined by DBTCA and RBC CM, respectively. The fee paid to DBTCA (not to exceed 35 basis points) by each Program Bank will not vary. By continuing to permit your Account s assets to be swept into the Program, you are continually approving the fees paid to DBTCA and RBC CM and the interest rate earned by you as reasonable. C. RBC WM AFFILIATE RELATIONSHIP AND YIELDS ON THE US GOVERNMENT FUND The US Government Fund is a money market fund managed by RBC Global Asset Management (U.S.) Inc., an affiliate of RBC Capital Markets, LLC. Information regarding current yields for the US Government Fund is available at or by contacting your investment professional. You may obtain a copy of US Government Fund s prospectus from your investment professional or online at Yields on the US Government Fund may be less than the interest rates offered on the Deposit Accounts by the Program Banks. IV. RBC CORRESPONDENT SERVICES AND RBC ADVISOR SERVICES RBC Correspondent Services acts as clearing broker for certain accounts by contractual arrangement with third party broker-dealers who utilize the services and facilities of RBC Correspondent Services to perform certain execution and clearing functions. RBC Advisor Services provides custody and execution services for clients of third party investment advisors under a contractual arrangement with the investment advisors. If your Account is with either RBC Correspondent Services or RBC Advisor Services (i) RBC CM will not review or analyze your Account for the purpose of providing advice to you and RBC CM will not provide any advice regarding your Account, including the suitability of the Program (ii) RBC CM assumes no responsibility for trades made in your Account, and (iii) RBC CM has no responsibility or liability for any actions or omissions of your financial professional or its representatives, employees or other agents. Therefore, you must consult your financial professional for advice and recommendations concerning your Account and you should discuss all your investment goals and objectives with your financial professional. SHOULD YOU HAVE ANY QUESTIONS CONCERNING ANY ASPECT OF THE INFORMATION RBC CAPITAL MARKETS, LLC, MEMBER NYSE/FINRA/SIPC Page 10 of 14

12 CONTAINED HEREIN, YOUR ACCOUNT OR SECURITIES IN GENERAL, CONTACT YOUR FINANCIAL PROFESSIONAL IMMEDIATELY. By participating in the Program, any client of RBC Correspondent Services or RBC Advisor Services understands that RBC CM will act only to clear trades introduced by your Financial Advisor and to effect other back office functions for your Financial Advisor. You understand that all representatives, employees and other agents with whom you communicate concerning your Account(s) are agents of your financial professional, and are not RBC CM representatives, employees or other agents. RBC CM has no responsibility to supervise or monitor the activities of your Financial Advisor, and the Financial Advisor is exclusively responsible for ensuring that transactions in your Account(s) comply in all respects with applicable laws, rules and regulations and are suitable for your investment goals and objectives. V. FDIC DEPOSIT INSURANCE COVERAGE A. GENERAL INFORMATION Balances in the Deposit Accounts are insured by the FDIC, an independent agency of the U.S. Government, up to $250,000 for all deposits held in the same insurable capacity at any one Program Bank (the Maximum Applicable Deposit Insurance Limit ). Examples of insurable capacities include individual accounts, joint accounts, and IRAs. Your funds become eligible for deposit insurance immediately upon placement into a Deposit Account at a Program Bank. Any deposits that you may maintain directly with a particular Program Bank, or through any other intermediary, in the same insurable capacity in which the Deposit Accounts are maintained would be aggregated with the Deposit Accounts for purposes of the $250,000 federal deposit insurance limit You are responsible for monitoring the total amount of deposits that you hold with any one Program Bank, directly or through an intermediary, in order to determine the extent of deposit insurance coverage available to you on your deposits, including the Deposit Accounts. RBC CM is not responsible for any insured or uninsured portion of the Deposit Accounts or any other deposits. In the event a Program Bank fails, the Deposit Accounts at that Program Bank are insured, up to $250,000, for principal and interest accrued to the day the Program Bank is closed. Under certain circumstances, if you become the owner of deposits at a Program Bank because another depositor dies, beginning six months after the death of the depositor the FDIC will aggregate those deposits for purposes of the $250,000 federal deposit insurance limit with any other deposits that you own in the same insurable capacity at the Program Bank. Examples of deposit accounts that may be subject to this FDIC policy include joint accounts, payable on death accounts and certain trust accounts. The FDIC provides the six-month grace period to permit you to restructure your deposits to obtain the maximum amount of deposit insurance for which you are eligible. In the event that federal deposit insurance payments become necessary, payments of principal plus unpaid and accrued interest will be made to you. There is no specific time period during which the FDIC must make insurance payments available, and RBC CM is under no obligation to credit your Account with funds in advance of payments received from the FDIC. Furthermore, you may be required to provide certain documentation to the FDIC and RBC CM before insurance payments are made. For example, if you hold deposits as trustee for the benefit of trust participants, you may be required to furnish affidavits and provide indemnities regarding an insurance payment. If your Deposit Accounts at a Program Bank are assumed by another depository institution pursuant to a merger or consolidation, the Deposit Accounts will continue to be insured separately, up to the FDIC insurance coverage limits, from any deposits that you have established with the acquiror until the expiration of a six-month period from the date of the acquisition. Thereafter, the Deposit Accounts will be aggregated with your existing deposits with the acquiror held in the same capacity for purposes of FDIC insurance coverage. B. AGGREGATION RULES APPLICABLE TO RETIREMENT ACCOUNTS Under FDIC regulations, an individual s interests in plans maintained by the same employer or employee organization (e.g., a union) that are holding deposits of the same Program Bank will be insured for $250,000 in the aggregate. In addition, under FDIC regulations, an individual s interest in the deposits of one Program Bank held by (i) IRAs, (ii) deferred compensation plans for certain employees of state or local governments or tax-exempt organizations (i.e., Section 457 Plans), (iii) self-directed Keogh Plans of owner-employees described in Section 401(d) of the Internal Revenue Code of 1986, as amended, and (iv) self-directed defined contribution plans, will be insured for up to $250,000 in the aggregate whether or not maintained by the same employer or employee organization. C. QUESTIONS ABOUT FDIC DEPOSIT INSURANCE COVERAGE If you have questions about FDIC insurance coverage, please contact your investment professional. You may wish to RBC CAPITAL MARKETS, LLC, MEMBER NYSE/FINRA/SIPC Page 11 of 14