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 1983 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 custodied assets of $3.1 trillion, including managed assets of $1.4 trillion as of June 30,2010.
The Financial Strength of National Financial Services, LLC.
As of June 30, 2010, National Financial Services LLC, serviced 18.9 million accounts representing $1.7 trillion in assets. NFS is staffed by dedicated professionals who have experience in both positive and negative market environments. The financial strength of NFS is derived from its system of internal controls, cash flow and strong capital position.
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)
National Financial Services, LLC 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. A non-profit membership corporation, SIPC is funded by broker/dealers and protects its membership by law.
To cover assets such as yours, the SIPC fund is supported by:
- $1 billion line of credit with a bank consortium
- Borrowing power of up to $1 billion from the U.S. Treasury through SEC
Because the Securities Investor Protection Act of 1970 affords special benefits to SIPC-covered firms such as National Financial Services LLC, WRP Investments, Inc's agreement with National Financial Services LLC provides your assets a high level of coverage.
Securities in accounts carried by National Financial Services LLC are protected in accordance with the SPIC up to $500,000 (including cash claims limited to $250,000).
For details, please visit www.sipc.org
Unlimited Protection for Your Assets In addition to the SIPC coverage National Financial Services LLC provides for brokerage accounts additional "excess of SIPC coverage from Lloyds of London, together with other insurers.*
The "excess of SIPC" coverage would only be used when SIPC coverage is exhausted. Like SIPC protection, "excess of SIPC" protection does not cover investment losses in customer accounts due to market fluctuation. It also does not cover other claims for losses incurred while broker-dealers remain in business.Total aggregate "excess of SIPC" coverage available through National Financial Services LLC's "excess of SIPC" policy is $1billion.
Within National Financial Services LLC's "excess of SIPC" coverage there is no per account dollar limit on coverage of securities, but there is a per account limit of 1.9 million on coverage of cash. This is the maximum "excess of SIPC" protection currently available in the brokerage industry. Lloyd's of London currently has an A (Excellent) rating with "Stable Outlook" from ratings firm A.M. Best and an A+ (Strong) rating with "Stable Outlook" from Fitch Ratings and Standard & Poor's**.
*Fidelity's "excess of SIPC" insurance is provided by Lloyd's of London, together with Axis Specialty Europe Ltd. and Munich Reinsurance Co.
**As of November 2009 and subject to change. For ratings explanations, please go to http://www.lloyds.com/Lloyds/Investor-Relations/Ratings.
Safekeeping of Your Assets at National Financial Services, LLC.
As a registered broker/dealer, National Financial Services LLC (NFS) is subject to the rules and regulations of the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), and 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:
- Keeping accurate records of your assets
held at NFS
- Maintaining net capital at required levels
In compliance with SEC rules, National Financial Services LLC (NFS) has its financial information auditied every year by an independent public accounting firm. Further, as a member of NYSE and FINRA and registered with the SEC, National Financial Services LLC is subject to their regulatory oversight and examination. Fully Paid Securities and Cash As your 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 not be removed from possession or control unless there is a margin debit balance. Further Safeguards National Financial Services LLC 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:
- Statement of financial condition
- Income statement and statement of changes in stockholders' equity
- Regulatory schedules, including a computation of net capital, a reserve formula computation, and other key financial operational data
As a broker-dealer, National Financial Services LLC cannot use your fully paid securities for its business. These securities must be held for your own exclusive benefit, and are subject to the instructions that we provide to National Financial Services LLC.
National Financial Services LLC 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.
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