Sweep Account Disclosure

Lombard Securities’ (“Lombard”) money fund options are provided exclusively by its correspondent, Hilltop Securities, Inc (“SWST”). Hilltop offers a number of alternatives which you can discuss with your Lombard broker. We currently recommend, however, for all Lombard client accounts to employ the FDIC Insured Deposit Program. This is an FDIC-insured account administered by Total Bank Solutions that sweeps funds to a number of separate participant banks in increments of $250,000 (per bank), to achieve FDIC insurance coverage of up to $1.25 million spread over the (current) twenty participant banks in the program. Deposits in these participant banks are generally insured up to $250,000 per depositor, while your IRA and other qualifying self-directed retirement funds on deposit are separately insured up to $250,000. Prior or additional bank accounts at any participant bank may affect insurance coverage. If your funds on deposit at the participant bank exceed the applicable FDIC insurance limit of $250,000 per depositor ($250,000 for qualifying retirement accounts), the FDIC will not insure your funds at that participant bank which are in excess of your limit. If you have a deposit with one of the participant banks that is separate from a balance in the Bank Insured Deposit, please notify your broker if the combined deposits are in the excess of $250,000.

For a list of Bank Insured Deposit participant banks, please click here: Participant Banks. For the BID Terms and Conditions document, please click here: BID Terms and Conditions.

It is important that you understand the unique nature, insurance coverage and risk associated with each type of account. SIPC coverage does not protect cash balances created and maintained solely for the purpose of earning interest, so funds in money market or CIP accounts must be intended for future reinvest.

SWST may temporarily suspend or discontinue the sweep arrangement, or change the timing or frequency of the sweep, or change the specific banks, or number thereof, anytime without advance notice to you. SWST may change your sweep account terms by giving you written notice. If SWST fails to sweep your uninvested funds in the manner described in the Customer Account Agreement, SWST’s liability is limited to the actual amount of the dividends or interest you would have earned had the sweep been performed. SWST may automatically sweep funds from your sweep account to your brokerage account anytime without advance notice to you to pay for securities transactions and withdrawal requests, satisfy a debit balance, settle any other obligation you owe SWST, pay your margin loan, provide necessary collateral in your margin account, or for any other permissible purposes. Should you wish to access these funds or information regarding the funds or information regarding the fund rates, contact you broker or registered representative. With ongoing changes to the rates of return for the available sweep options, your personal financial circumstances and market conditions, you should always consider all of your investment options.

Bank Insured Deposit

Hilltop anticipates receiving fees, including fees for administrative services, and other financial benefits for providing sweep funds on deposit with the Bank Insured Deposit. A portion of fees received may be paid to Lombard. The FDIC insures bank deposit accounts such as checking, interest-bearing checking and savings accounts, money market deposit accounts, and certificates of deposit (CDs) if an insured bank or savings association fails. Your bank deposits are generally insured up to $250,000 per depositor, while your IRA and other qualifying self-directed retirement funds on deposit are separately insured up to $250,000. The FDIC does not insure the money you invest in stocks, bonds, mutual funds, life insurance policies, annuities, or municipal securities, even if you purchased those products from an insured bank. Prior or additional bank accounts at the Bank may affect insurance coverage. If your funds on deposit exceed the applicable FDIC insurance limit of $250,000 per depositor ($250,000 for qualifying retirement accounts), the FDIC will not insure your funds in excess of the limit. Additional information regarding FDIC coverage is available at www.fdic.gov. Please consult your broker, as certain types of accounts may not be eligible in the Bank Insured Deposit.

Interest on funds in a bank deposit account is accrued daily, compounded monthly and credited to your account monthly. Interest begins to accrue on the date of a deposit in the Bank up to, but not including, the date of withdrawal. The daily balance method is used to calculate the interest on these accounts. The daily rate is 1/365 (or 1/366 in a leap year) of the interest rate. Account rates are set in occurrence with other Bank products and may be changed at any time. The rate of return paid on Bank Insured Deposit funds may vary from rates of return available to depositors making deposits with the Bank directly, through other types of accounts at your brokerage, or with other depository institutions in comparable accounts. The bank deposit account may be more profitable to SWST and its affiliates, than other available sweep options. You should compare the terms, rates of return, required minimum amounts, charges and other features with other accounts and alternative investments.

Money Market Funds

Money market mutual funds, which may also be available as customer selected sweep options, are treated as securities and are registered with the Securities and Exchange Commission (SEC), pursuant to the Investment Company Act of 1940. The Securities Investor Protection Corporation (SIPC) covers most customers of failed brokerage firms when assets are missing from customer accounts. If sufficient funds are not available to compensate customers fully, the reserve funds of SIPC are used to supplement the distribution. There is a limit of $500,000 per customer, including a maximum of $250,000 paid for cash claims. Additional funds may be available to satisfy the remainder of customer claims after the cost of liquidating the brokerage firm is taken into account. More comprehensive information regarding SIPC coverage is available at www.sipc.org. Supplemental coverage by SWST through an Excess Securities Bond additionally protects your securities, up to an aggregate $20 million, against physical loss or misplacement. Certain types of accounts, including corporations, partnerships and employee benefit plans, are not eligible to invest in the funds, please contact your broker for additional information. We may receive fees or other financial benefits based on your sweep account balance. For money market funds, those benefits can include payments based on the amount you invest in the sweep account. A portion of fees received may be paid to your broker/dealer. Please note that shares in a money market fund are not FDIC-insured, not guaranteed by the Federal government, and are not deposits or obligations of any bank or guaranteed by any bank. There can be no assurance that a money market fund will be able to maintain a stable net asset value of $1 per share. Tax-exempt money market funds may be subject to the alternative minimum tax. See the money market fund prospectus for more complete information, including terms, management fees, prevailing rates and expenses. You can obtain a protectus by contacting your registered representative. You should consider the fund’s investment objectives, risks and expenses before investing.