Investors are entitled to have complete confidence in the
safety and security of their accounts. That is why we have provided you with this
description of the various ways your securities and cash are protected while
held at National Financial Services, LLC (NFS) through WRP Investments, Inc.
Supported by an Industry Leader
WRP Investments, Inc. has entered into a securities
clearing relationship with National Financial Services, LLC, one of the
industry’s leading clearing firms. Established in 1982 to process securities
transactions and hold securities for brokerage customer accounts, NFS is a
Fidelity Investments company. Fidelity is one of the country’s leading
providers of financial services, with managed assets totaling over $900
billion.
The Financial Strength of National Financial
Services, LLC.
NFS currently services more than 5.8 million investor
accounts across the
Compliance with various industry rule and regulations is
monitored internally each day. In addition, compliance is strictly enforced by
the regulatory agencies and reviewed each year during the annual audit,
performed by an independent public accounting firm.
Asset protection from Securities Investor Protection Corporation (SIPC)
NFS and WRP Investments, inc. are members of the Securities
Investor Protection Corporation, which was created by Congress in 1970 to
protect customers of member broker/dealer firms. SIPC is a noon-profit
membership corporation funded by broker/dealers who are required by law to be
members. The SIPC fund has a $1 billion line of credit with a bank consortium,
and can borrow up to $1 billion more from the U.S. Treasury, through the
Securities and Exchange Commission (SEC).
Customers of an SIPC-covered firm are afforded special
benefits under the Securities Investor Protection Act of 1970. Since NFS is a
member of SIPC, assets in your brokerage account are protected by SIPC. Within
certain limits, SIPC protection covers both investor securities held by NFS and
cash on deposit for the purpose of purchasing securities or as a result of the
sale of securities. SIPC coverage protects your assets in the unlikely event
that a member firm should fail to meet its obligations. Keep in mind, however,
that SIPC coverage does not protect against a decline in the market value of
securities.
The maximum SIPC protection is $500,000 for covered
accounts. Cash balances awaiting re-investment are protected up to $100,000,
which is included in the $500,000. These limits are on a per-customer basis as
defined in the Securities Investor Protection Act. Most types of securities
help in a brokerage account at NFS are protected, including stocks, bonds,
notes, debentures, certificates of deposit (CDs) and mutual funds held with the
SIPC member.
Unlimited Protection for Your Assets
In addition to the SIPC coverage of $500,000 (cash claims
limited to $100,000), your assets held at NFS enjoy unlimited coverage from
supplemental account protection through Asset Guaranty Insurance Company.
Asset Guaranty Insurance Company has an AAA rating (the
highest) from Duff & Phelps and an AA rating from Standard & Poor’s.
Asset Guaranty was chosen to provide coverage in excess of SIPC protection
because NFS believes it offers the best combination of service and value.
Remember, this account protection does not cover declines in the market value
of securities.
Insurance Coverage
NFS maintain Financial Institution Bond Coverage in the
amount of $100 million. The Bond covers losses resulting from employee
dishonesty, robbery and mysterious disappearance of securities. NFS also
maintains Electronic and Computer Crime Insurance coverage to protect against
losses resulting from certain fraudulent acts committed by a third party.
NFS is required by the SEC to file monthly and quarterly
financial and operational reports (FOCUS reports) within 17 business days of
the month’s end. The quarterly report contains financial statements, including
a statement of financial condition, and income statement and a statement of
changes in stockholder’s equity. Regulatory schedules, including a computation
of net capital, a reserve formula computation and other key financial and
operation data, also are filed.
NFS’s policy is to maintain net
capital significantly in excess of the amount required by regulators.
Safekeeping of Your Assets at National Financial Services, LLC
As a registered broker/dealer, NFS is subject to the rules
and regulations of the SEC, the New York Stock Exchange (NYSE), the National
Association of Securities Dealers, Inc. (NASD), other exchanges of which NFS is
a member, and the Municipal Securities Rulemaking Board (MSRB). These
regulatory organizations each have certain rules and regulations that NFS must
follow to safeguard your assets:
- Segregating
your assets form those of the firm
- Keeping
accurate records of your assets
- Maintaining
net capital at certain required levels
NFS conducts internal audits and is audited by an
independent public accounting firm on an annual basis. The firm is also subject
to examinations by the SEC, NYSE and other organizations to ensure that their
regulations are met.
Fully Paid Securities and Cash
As you broker/dealer, WRP Investments, Inc. cannot use your
fully paid customer securities for our own business. These securities must be
held for your exclusive benefit and subject to your exclusive instructions. NFS
must account for, and inspect, every physical security owned by an investor at
least once every calendar quarter. Any differences must be recorded and
corrected within specific time frames.
Net customer cash balances not required for customer
transactions must be maintained in a cash account segregated for the exclusive
benefit of customers.
Margin Accounts and Short Selling
In a margin account, individual securities with a market
value up to 140% of the margin loan can be removed from a control location and
used for lending. Securities deposited or held as collateral for short selling
or options may jot be removed from possession or control unless there is a
margin debit balance.
Further Safeguards
NFS has an extensive and sophisticated Emergency Contingency
Plan in place to safeguard your assets and protect vital account information in
the event of business disruption. Duplicate records and backup systems are
maintained at its primary data processing facility in