privaTe BanKing and inveSTMenT groUp

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privaTe BanKing and inveSTMenT groUp

  1. 1. privaTe BanKing and inveSTMenT groUp QUarTerlY STaTeMenT diSCloSUreS oCToBer 2009 Helping ClienTS Move Forward Through a relationship with a dedicated Merrill Lynch Private Wealth Advisor, clients have always had access to an array of products and solutions designed to address their financial needs. Now, with the combination of Bank of America and Merrill Lynch, Merrill Lynch Private Wealth Advisors can provide access to an even more sophisticated suite of capabilities and expertise to help clients achieve their goals and keep them moving forward. Merrill Lynch Private Wealth Advisors can provide access to these combined resources, whether clients are looking for capital, a bank account that can help their idle cash be more productive without compromising its safety, or a retirement planning strategy that suits their particular circumstances. “We have been able to bring Bank of America, N.A.’s suite of banking and credit products to add to what Merrill Lynch already has,” says Dean Athanasia, Head of Americas Banking Contents and Personal Retirement Solutions for Bank of 2009-2010 required Minimum America. “That helps give clients customized distribution reminder ....................................3 answers for their needs that draw upon some of important Changes regarding the industry’s highest quality products. And it wire Transfers...............................................4 helps Merrill Lynch Private Wealth Advisors act Merrill lynch Balance Sheet as better advocates for clients.” available online ...........................................4 important information on eTFs and A Merrill Lynch Private Wealth Advisor is Mutual Funds ...................................................4 part of an expanded team that includes Wealth our Continued Commitment to Third-party Management Bankers and Banking Product equity research ..........................................5 Specialists, whose deep knowledge of the com- important notice: Fee Change for bined company’s offerings can help them find delivery of Securities .....................................5 solutions tailored to help fit client needs. And in annual Fee for individual the months ahead, Merrill Lynch Private Wealth investor accounts .........................................5 Advisors will keep their clients updated on inno- important notice to Clients who are vative solutions designed to make a difference in executive officers, directors and Control owners of U.S. public Companies their financial life. It’s all part of Merrill Lynch’s (Section 16 affiliates) ..................................6 commitment to helping you stay one step ahead. UpdaTe regarding iMporTanT CHangeS To THe U.S. Merrill lYnCH BanKS As part of the ongoing integration of Merrill Lynch & Co., Inc. with Bank of America Corporation, we are committed to keeping you informed about any changes that affect your accounts and services. With this in mind, we want to let you know that we are continuing with our plans to replace Merrill Lynch Bank USA (MLBUSA) and Merrill Lynch Bank & Trust Co., FSB (MLBT-FSB) in certain Merrill Lynch deposit, credit and card programs (specifically including the various Merrill Lynch bank deposit programs listed below). This notice amends the previous notice we sent you in July*. These changes will not affect the operation of these programs. Please see below for more information about the programs Continued on page 2
  2. 2. UpdaTe regarding iMporTanT CHangeS To THe U.S. Merrill lYnCH BanKS Continued from page 1 including the effect on FDIC coverage. We will provide you with updates in advance of any further changes. MLBUSA and MLBT-FSB are the two affiliated Merrill Lynch banks that have participated in the following deposit, credit and card programs offered to Merrill Lynch clients: • Merrill Lynch Bank Deposit Program • Business Deposit Program • Retirement Asset Savings Programs • Retirement Bank Account™ • Insured Savings AccountTM (ISA®) Program • ML Direct MLBUSA Deposit Program • Certificates of Deposit (CDs) or Market Participation Deposits (MPDs) that were issued by MLBUSA and MLBT-FSB • Direct debit and deferred debit Visa® cards • Overdraft advances • oan Management Account® (LMA® account) L *The only changes from the previous notice are: (i) all deposits held at MLBT-FSB will be redirected and deposited with Bank of America Rhode Island, N.A. (BA-RI) instead of Bank of America North Carolina N.A. (BA-NC), and (ii) this change is expected to occur on or after Nov. 2, 2009 instead of Oct. 1, 2009. Deposit Programs, CDs and MPDs On July 1, 2009, MLBUSA merged into Bank of America, N.A. (BANA). All deposits formerly held at MLBUSA were redirected and deposited with FIA Card Services, N.A. (FIA). On or after Nov. 2, 2009, MLBT-FSB will be merged into Bank of America, N.A. (BANA). Immediately before the merger, deposits in the Merrill Lynch Bank Deposit Program, Business Deposit Program, Retirement Bank Account and the Retirement Asset Savings Program held at MLBT-FSB will be redi- rected and deposited with Bank of America Rhode Island, N.A. (BA-RI). For clients with deposits in the ISA Program, on July 1, 2009, FIA assumed the position of MLBUSA in the bank priority sequence in all geographic ISA regions. Immediately before the merger of MLBT-FSB into BANA, BA-RI will assume the position of MLBT-FSB in the bank priority sequence in all geographic ISA regions. FIA and BA-RI are separately chartered, FDIC-insured institutions and subsidiaries of Bank of America Corporation, as well as affiliates of Merrill Lynch. This change does not affect how these deposit programs operate, and your deposits will continue to be governed by the terms described in your brokerage account agreement. The structure for setting inter- est rates for the bank deposit programs will remain unchanged, but please note that interest rates may fluctuate, either down or up, based on economic and business conditions. You may access current yield information online at www.mymerrill.com or www.newmlol.ml.com or by calling (888) ML RATES (657-2837) or by contacting your Private Wealth Advisor. Also, you will be notified in advance if there are any substantial changes in the operation of these bank deposit programs in the future, including any changes to rate structure. On July 1, 2009, any CDs and MPDs that were issued by MLBUSA became obligations of BANA. On the date of MLBT-FSB’s merger into BANA, any CDs or MPDs issued by MLBT-FSB will become obligations of BANA. Important information about FDIC coverage The FDIC currently insures deposit accounts, including CDs and MPDs, up to $250,000** per depositor, per bank in a given ownership category. Deposits maintained in different categories of legal ownership— such as individual accounts, joint accounts or retirement accounts—are separately insured by the FDIC, Continued on page 3 —2—
  3. 3. UpdaTe regarding iMporTanT CHangeS To THe U.S. Merrill lYnCH BanKS Continued from page 2 up to applicable insurance limits. Deposits in one FDIC-insured bank are insured separately from deposits in another FDIC-insured bank, up to the applicable limits. Any CDs or MPDs you held with MLBUSA and hold with MLBT-FSB became, or will become, BANA deposits after each bank’s respective merger, but will be separately insured from the deposits that you might have with BANA until the later of: i) the expiration of a six-month grace period from the date of the merger, or ii) the earliest maturity date after the end of the six-month grace period. Thereafter, any assumed CDs or MPDs deposits that remain on deposit with BANA will be aggregated with existing deposits with BANA held in the same ownership category for FDIC insurance purposes. Any deposit at BANA made after a bank’s merger date will be aggregated with deposits in the same ownership category that you may have with BANA for FDIC insurance purposes. Your MLBUSA deposits made pursuant to a bank deposit program became deposits with FIA on July 1, 2009. Your MLBT-FSB deposits made pursuant to a bank deposit program will become deposits with BA-RI immediately before the merger of MLBT-FSB into BANA. As a result, any new deposits made at FIA will be aggregated with such deposits in the same ownership category established at FIA for FDIC insurance purposes. Since BA-RI does not hold any other customer deposits at this time, your FDIC insur- ance coverage will not be affected by the merger of MLBT-FSB. Please note that BANA, FIA and BA-RI are three separately chartered FDIC-insured institutions, which means that deposits at BANA are separately insured from deposits at FIA and from deposits at BA-RI. You are responsible for monitoring the total amount of your deposits to determine the extent of insur- ance coverage available to you on your deposits, including CDs and MPDs. If you have any questions, or need additional information about how to maximize your deposit insurance coverage, please visit www.FDIC.gov or contact your Private Wealth Advisor or Merrill Lynch representative. ** For deposit accounts other than personal retirement accounts, the limit is scheduled to change to $100,000 as of Jan. 1, 2014. Visa cards, overdraft advances and Loan Management Account Visa debit and deferred debit cards previously issued by MLBUSA are now issued by BANA and as of the date of MLBT-FSB’s merger, Visa debit cards issued by MLBT-FSB will be issued by BANA. Overdraft advances in Merrill Lynch central asset accounts are now provided by BANA. These changes do not oth- erwise affect the Visa debit and deferred debit cards or the overdraft account feature, and the terms and conditions of their use will remain as described in your account agreement. Please continue to use your cards as you do today. Also, BANA became the lender for LMA account credit facilities on July 1, 2009. If you have questions regarding any of these changes, please call your Private Wealth Advisor or Merrill Lynch representative. 2009-2010 reQUired MiniMUM diSTriBUTion reMinder The Worker, Retiree, and Employer Recovery Act of 2008 (WRERA 2008) suspending Required Minimum Distributions (RMDs) for 2009 will expire on December 31, 2009. At this time, there are no proposals in Congress to expand this beyond 2009. As a result, all RMD eligible clients will be required to begin taking a required minimum distribution for the 2010 distribution year* (based on their 12/31/2009 fair market value). Individuals who turned 701/2 in 2009 and earlier, must take their 2010 RMD no later than 12/31/2010. Individuals who turn 701/2 in 2010 have until April 1, 2011 to take their first RMD based on the 2010 distribution year. Look for enhancements to your Retirement Account statements beginning in January that will provide you with important RMD information. *Before deciding what distributions to take from your accounts, we recommend that you review the information with your tax advisor to ensure that you will satisfy RMD rules. —3—
  4. 4. iMporTanT CHangeS regarding wire TranSFerS As part of the ongoing integration of Merrill Lynch & Co., Inc. and Bank of America Corporation, we have changed the US Dollar wire transfer instructions for Merrill Lynch Global Wealth Management clients. Clients should immediately begin using the new instructions listed below for all wire transfers to be credited to their Merrill Lynch accounts: ABA 026009593 [International Banks can use SWIFT-BIC: BOFAUS3N] Bank of America, N.A. 100 West 33rd Street New York, NY a/c 6550113516 Name: Merrill Lynch Ref: For final credit [8-digit client account # and name] These instructions are replacing the previous instructions, which routed wire transfers through The Bank of New York Mellon or The Northern Trust International. Note: When wiring funds to Merrill Lynch, please instruct the sending institution to include your Merrill Lynch 8-digit account number and full account name to avoid delays or the possibility of funds being returned. Please contact your Private Wealth Advisor, branch office or service center should you have any questions regarding this change. Merrill lYnCH BalanCe SHeeT availaBle online The most recent consolidated balance sheet of Merrill Lynch, Pierce, Fenner & Smith Incorporated and its subsidiaries is now available online at: http://askmerrill.ml.com/mlpfs. You may also request a free copy of the balance sheet by calling (800) MERRILL (637-7455), and asking to speak to a service representative. Merrill Lynch, Pierce, Fenner & Smith Incorporated (Merrill Lynch) is required to maintain net capital in accordance with federal securities regulations. Merrill Lynch’s minimum required net capital is $500 million, pursuant to the rules of the Securities and Exchange Commission (SEC). At June 30, 2009, Merrill Lynch’s regulatory net capital was $5.004 billion, which is approximately $4.498 billion in excess of the minimum amount. In addition, Merrill Lynch’s regulatory net capital of $5.004 billion exceeded the Commodity Futures Trading Commission (CFTC) minimum requirement of $575 million by $4.428 billion. For additional information, our most recent annual audit report is available for examination at our head- quarters at World Financial Center, North Tower, 250 Vesey Street, New York, New York 10281-1220 and at the Northeast Regional Office of the SEC. iMporTanT inForMaTion on eTFS and MUTUal FUndS On June 22, 2009 the Financial Industry Regulatory Authority (FINRA) released a Regulatory Notice regarding risks related to exchange-traded funds (ETFs) and mutual funds that utilize leverage, or are designed to perform inversely to the index or benchmark they track. The notice highlighted the follow- ing points: • While inverse and leveraged ETFs may be useful in some sophisticated trading strategies, they are highly complex financial instruments that are typically designed to achieve their stated objectives on a daily basis. • Due to the effects of compounding, their performance over longer periods of time can differ signifi- cantly from their stated daily objective. • Inverse and leveraged ETFs that are reset daily typically are generally unsuitable for retail investors who plan to hold them for longer than one trading session and the investor should closely monitor their position as part of a sophisticated trading strategy. Merrill Lynch accepts unsolicited orders only in these types of ETFs. For more information about risks, please read the ETF prospectus carefully before investing. A copy of the Mutual Fund Disclosure Pamphlet can be obtained by calling (800) MERRILL, contacting your Private Wealth Advisor, or visiting http://askmerrill.ml.com/publish/marketing_centers/products/MF_DisclosureDocument.pdf. —4—
  5. 5. oUr ConTinUed CoMMiTMenT To THird-parTY eQUiTY reSearCH Merrill Lynch Global Wealth Management provides clients with access to third-party research. While our industry-leading Banc of America Merrill Lynch research continues to be at the core of the market information and guidance Private Wealth Advisors offer clients, the availability of third-party research supplements this information and provides clients with additional perspective on specific investments. During October 2009, the firm is enhancing its third-party research platform to include ratings, research and data from Standard & Poor’s. Standard & Poor’s is a world-leading source of credit ratings, indices, investment research, risk evaluation and data. Clients can access current third-party research content online at www.mymerrill.com or www.newmlol.ml.com, and/or with their Private Wealth Advisors. With this enhancement, you will also begin to see individual ratings from Standard & Poor’s on your statements and online in addition to Morningstar ratings. Data from Jaywalk is not expected to be available after the end of the year. Offering third-party research is part of our ongoing commitment to giving you the thought leadership you have come to expect from Merrill Lynch. Please contact a Private Wealth Advisor with any additional questions or to learn more about the third-party research platform changes. iMporTanT noTiCe: Fee CHange For deliverY oF SeCUriTieS The Depository Trust Company (DTC) is the depository for virtually all U.S. issued corporate securities held for customers of brokerage firms, banks and trust companies in the United States. Earlier this year, DTC adopted a procedure whereby it will no longer accept requests from brokerage firms, banks or trust companies for the issuance of physical stock certificates for U.S. issuers that participate in the Direct Reg- istration System (DRS). Therefore, whenever a stock certificate registered in client name is submitted for transfer through Merrill Lynch, DTC now processes it as a DRS statement with the issuer’s transfer agent instead of issuing a physical stock certificate. However, not all U.S. issuers have elected to participate in the Direct Registration System (DRS) and DTC has begun imposing a $500 fee for the issuance of physical stock certificates for U.S. issuers that do not participate in DRS. Therefore, beginning November 1, 2009, whenever a stock certificate is requested to be registered in client name or in the name of a third party, the fee for delivering certificates for these types of issues will be increasing from $50 to $500. This fee will be charged to your Merrill Lynch account. In the event you are gifting these securities, you may avoid this certificate fee by transferring the shares via DTC to the recipient’s brokerage account at another firm or if the recipient has an account at Merrill Lynch, the transfer can be processed internally by a journal entry. Please note that approximately 1,100 issuers have chosen not to provide their shareholders with the op- tion of having their holdings in DRS. It is important to note that a growing list of more than 400 publicly traded companies in the U.S. no longer offer stock certificates. For more information about DRS, go to DTC’s website at www.dtc.org and choose “Direct Registration System” under “Asset Services.” If you plan to request a stock certificate for any reason, please check with your Private Wealth Advisor in advance to determine if this fee would pertain to your request. annUal Fee For individUal inveSTor aCCoUnTS Clients with Individual Investor Accounts are reminded that the account has an annual fee of $65. The assessment of the annual fee depends on the date on which your account was opened: • If you opened your account before January 1, 1998, you will be billed in January for the previous calendar year. • If you opened your account after January 1, 1998, you will be assessed the fee on or about the anniversary of the date your account was opened. The fee will be deducted from your account during the applicable billing cycle. If cash or assets in the account are insufficient to cover the fee, you will be billed directly. —5—
  6. 6. iMporTanT noTiCe To ClienTS wHo are exeCUTive oFFiCerS, direCTorS and ConTrol ownerS oF U.S. pUBliC CoMpanieS (SeCTion 16 aFFiliaTeS) The Sarbanes-Oxley Act of 2002 and other reforms arising out of corporate scandals of recent years have created a host of new responsibilities for executive officers and directors of U.S. public companies and for financial services firms, like Merrill Lynch, that provide services to such public companies and their affili- ates. It is important that individual clients who are executive officers, directors and 10% owners of U.S. public companies (“Section 16 affiliates”) make their status known to their Private Wealth Advisors so that transactions that require compliance with federal securities and other laws are handled properly and in accordance with the law. Section 16 affiliates should be aware of the following in particular: 1) When you open an account or otherwise establish a business relationship with Merrill Lynch for investment or other financial services involving your or your family’s personal assets or any collective investment account in which you own a beneficial interest, you have an affirmative obligation to disclose to Merrill Lynch your status as a Section 16 affiliate. 2) Whenever you have a change in status, such as a change of employment or election to the board of directors of a U.S. public company, such that you become a Section 16 affiliate, you have an affirmative obligation to notify Merrill Lynch of your new status. 3) Unless notified otherwise, Merrill Lynch will consider that all funds and assets maintained in your or your family’s personal accounts are solely your property. Your continued maintenance of an account with Merrill Lynch shall constitute your representation that no other person or entity has any interest in your account(s). In addition, you agree that at no time will any funds or assets of the U.S. public company of which you are an affiliate will be invested through your account(s). 4) Executive officers and directors of U.S. public companies (as well as of non-U.S. public companies whose primary trading market is the United States) are ineligible to purchase equity initial public of- ferings (IPOs), and persons participating in equity IPOs are required to represent in writing that their accounts are not owned 50% or more by such a director or executive officer, including the spouse and minor child of such a person. Please note that you are a Section 16 affiliate if you are required to file Forms 3 and 4 ownership reports with the U.S. Securities and Exchange Commission (SEC) with respect to your share holdings in a U.S. public company. As a Section 16 Officer or Director, you can also enroll for our Officer and Director Equity Service, a complimentary service which provides pre-trade clearance and post-trade e-mail confirmation for open market purchase and sale transactions done through Merrill Lynch. Speak with your Private Wealth Advisor about this service to assist you with making timely SEC reporting of your transactions. L-09-09 Visa is a registered trademark of Visa International Service Association and is used by the issuers pursuant to license from Visa U.S.A. Inc. Merrill Lynch, Pierce, Fenner & Smith Incorporated offers a broad range of brokerage, investment advisory (including financial planning), banking, trust, mortgage and other financial services and products. The nature and degree of advice and assistance provided, the fees charged, and client rights and Merrill Lynch’s obligations will differ among these services. Bank of America Corporation (“Bank of America”) is a financial holding company that, through its subsidiaries and affiliated companies, provides banking and nonbanking financial services. Merrill Lynch Wealth Management makes available products and services offered by Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S) and other subsidiaries of Bank of America Corporation. Bank products are provided by Bank of America, N.A., FIA Card Services, N.A., Bank of America Rhode Island, N.A., and Merrill Lynch Bank & Trust Co., FSB, Members FDIC. Investment products: Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value MLPF&S is a registered broker-dealer, member SIPC and a wholly owned subsidiary of Bank of America Corporation. © 2009 Bank of America Corporation. All rights reserved. 157906 Code 324300PM-0909

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