Legal Notices

Union Capital Company has developed a Business Continuity Plan on how we will respond to events that significantly disrupt our business. Since the timing and impact of disasters and disruptions is unpredictable, we will have to be flexible in responding to actual events as they occur. With that in mind, we are providing you with this information on our business continuity plan.

Contacting Us

If after a significant business disruption you cannot contact us as you usually do at 520-664-2001 or webmaster@unioncapital.com, you should call our alternative number 520-240-3582 or go to our web site at www.unioncapital.com. If you cannot access us through either of those means, you should contact our clearing firm, RBC Dain Correspondent Services, at 866-861-3454 or www.rbcdaincscs.com for instructions on how it may provide prompt access to funds and securities, enter orders, and process other trade-related, cash, and security transfer transactions for our customers.

Our Business Continuity Plan

We plan to quickly recover and resume business operations after a significant business disruption and respond by safeguarding our employees and property, making a financial and operational assessment, protecting the firm’s books and records, and allowing our customers to transact business. In short, our business continuity plan is designed to permit our firm to resume operations as quickly as possible, given the scope and severity of the significant business disruption.

Our business continuity plan addresses:

• Data back up and recovery
• All mission critical systems
• Financial and operational assessments
• Alternative communications with customers, employees, and regulators
• Alternate physical location of employees
• Critical supplier, contractor, bank and counter-party impact
• Regulatory reporting
• Assuring our customers prompt access to their funds and securities if we are unable to continue our business

Our clearing firm, RBC Dain Correspondent Services, backs up our important records in a geographically separate area. While every emergency situation poses unique problems based on external factors such as time of day and the severity of the disruption, we have been advised by our clearing firm that its objective is to restore its own operations and be able to complete existing transactions and accept new transactions and payments within approximately 4 to 12 hours. Your orders and requests for funds and securities could be delayed during this period.

Varying Disruptions

Significant business disruptions can vary in their scope, such as only our firm, a single building housing our firm, the business district where our firm is located, the city where we are located, or the whole region. Within each of these areas, the severity of the disruption can also vary from minimal to severe. In a disruption to only our firm or a building housing our firm, we will transfer our operations to a local site when needed and expect to recover and resume business within a minimal amount of time. In a disruption affecting our business district, city, or region, we will transfer our operations to a site outside of the affected area and recover and resume business within a minimal amount of time. In either situation, we plan to continue in business, transfer operations to our clearing firm if necessary, and notify you through our website www.unioncapital.com or our customer emergency number, 520-240-3582. If the significant business disruption is so severe that it prevents us from remaining in business, we will assure our customers' prompt access to their funds and securities.

For more information

If you have questions about our business continuity planning, you can contact us at 520-664-2001 or webmaster@unioncapital.com.

We are committed to keeping the personal information collected from our potential, current, and former customers confidential and secure. The proper handling of personal information is one of our highest priorities. We want to be sure that you know why we need to collect personal information from you. We also want to explain to you our commitment to protect the information you provide to us. We never sell your information to any outside parties.

Customer Information

We collect and keep only information that is necessary for us to provide services requested by you and to administer your business with us. We may collect nonpublic personal information:

• From you when you complete an application, subscription documents, or other forms. This includes information such as name, address, social security number, assets, income, net worth, and other information deemed necessary to evaluate your financial needs.
• As a result of transactions with us, our affiliates, or others. This could include transactions completed with us, information received from outside vendors to complete transactions, or to effect financial goals.

Sharing Information

We only share your nonpublic personal information with non-affiliated companies or individuals as permitted by law, such as your representative within our firm, securities clearing firm, issuer, mutual funds, insurance companies, and other product vendors, or to comply with legal or regulatory requirements. In the normal course of our business we may disclose information we collect about you to companies or individuals that contract with us to perform servicing functions such as:

• Record keeping
• Computer-related services
• Good faith disclosure to regulators who have regulatory authority over the company

Companies we hire to provide support services are not allowed to use your personal information for their own purposes and are contractually obligated to maintain strict confidentiality. We limit their use of your personal information to the performance of the specific service we have requested.

We do not provide your personally-identifiable information to mailing list vendors or solicitors for any purpose.

When we provide personal information to a service provider, we require these providers to agree to safeguard your information, to use the information only for the intended purpose, and to abide by applicable law.

Employee Access to Information

Only employees with a valid business reason have access to your personal information. These employees are educated on the importance of maintaining the confidentiality and security of this information. They are required to abide by our information-handling practices.

Protection of Information

We maintain security standards to protect your information, whether written, spoken, or electronic. We update and test our systems to ensure the protection and integrity of information.

Maintaining Accurate Information

Our goal is to maintain accurate, up-to-date customer records in accordance with industry standards. We have procedures in place to keep information current and complete, including timely correction of inaccurate information.

Disclosure of our Privacy Policy

We recognize and respect the privacy concerns of our potential, current, and former customers. We are committed to safeguarding this information. As a member of the financial services industry, we are sending you this Notice of Privacy Policy for informational purposes and will update and distribute it as required by law. It is also available upon request.

Internet Access

We provide a web site on the internet for our company. We do not utilize Cookies, Graphics Interchange Format (GIF's), or any other web tools. You should check the privacy policy for any links provided upon leaving our web site.

Use of Links and Third Party Information

The use of links and third party information when the visitor leaves this site using a link herein contained, the visitor does this at his/her own risk. Union Capital is not responsible for damages or losses caused for any delay, defect, or omissions that may exist in other services, information, or any content of that other site, be it actual, contestable, and with consequences. Union Capital does not guarantee or represent, and has no responsibility for any electronic content provided by third parties including quotes, which are 20 minutes delayed and without limit to exactness, content, quality of any electronic content.

Risks

With the opportunity to make investment decisions comes the responsibility to take the time to understand the implications of those decisions. Although online trading saves the investor time and money, it does not remove the need to do homework before making investment decisions. Investing in the stock market, however you choose to do it and however easy it may be, will always entail risks. Those risks include, but are not limited to, the following

1. Personal computers are not a direct link to the stock market.
   Although the internet makes it seem as if you have a direct connection to the securities market, you do not. By placing an order online, the investor opens the door to a host of new, potential problems. These potential problems can consist of clogged lines, system failure(s) anywhere between the investor's PC and the actual exchange or electronic marketplace, and the fact that in fast markets orders can, and often will, back up.
2. Limit Orders v. Market Orders
   Price quotes are only for a limited number of shares, so only the first few investors will receive the current quoted price. By the time your order reaches the front of the line, the price of the stock could be very different. To avoid buying/selling a stock at a price higher/lower than you wanted, you need to place a limit order rather than a market order. A limit order is an order to buy/sell a security at a specific price. When you place a market order, you cannot control the price at which your order will be executed.
3. Delayed Trade/Cancellation Confirmations
   With the large volume of securities being traded online, you may occasionally experience trouble getting initial trade/cancellation confirmations after execution/cancellation. The fact that you did not immediately receive a trade report does not mean your order was not executed. Avoid the temptation to re-enter the order, otherwise you may end up entering multiple orders for the same security that cannot be cancelled. Another misconception is that an order is cancelled when you hit cancel on your computer. In fact, the order is cancelled only when the market receives the cancellation. You may receive electronic confirmation of cancellation, but that only means your cancellation request was received - not that your order was actually cancelled.
4. Buying on Margin (Disclosure Statement)
   A margin account cannot be opened unless the customer signs a margin agreement. Under the agreement, the customer pledges the securities that are purchased in the account to the brokerage firm. In return for the pledge of securities, the brokerage firm loans the customer a portion of the purchase price. If you plan to borrow money to buy stock, you also need to know the terms of the loan your broker gave you and the inherent risks involved. In volatile markets, an investor who puts up an initial margin payment for the purchase of stock may be required to deposit additional funds, (thus the term "margin call"), in his/her account if the price of the stock falls. If you do not respond in a timely manner, stocks in your account could be sold to cover the call and you would be held responsible for any losses. Your broker has the legal right to sell your securities, without consulting you first, if your account falls below the required minimum maintenance level.
   
   It is important that you fully understand the risks involved in trading securities on margin. These risks include the following:
   
   
   • You can lose more funds than you deposit in the margin account. A decline in the value of securities that are purchased on margin may require you to provide additional funds to the Firm that has made the loan to avoid the forced sale of those securities or other securities or assets in your account(s).
   • The Firm can force the sale of securities or other assets in your account(s). If the equity in your account falls below the maintenance margin requirements or the Firm's higher "house" requirements, the Firm can sell the securities or other assets in any of your accounts held at the Firm to cover the margin deficiency. You also will be responsible for any short fall in the account after such a sale.
   • The Firm can sell your securities or other assets without contacting you. Some investors mistakenly believe that the Firm must contact them for a margin call to be valid, and that the Firm cannot liquidate securities or other assets in their accounts to meet the call unless the Firm has contacted them first. This is not the case. Most firms will attempt to notify their customers of margin calls, but they are not required to do so. However, even if the Firm has contacted a customer and provided a specific date by which the customer can meet a margin call, the Firm can still take the necessary steps to protect its financial interests, including immediately selling the securities without notice to the customer.
   • You are not entitled to choose which securities or other assets in your account(s) are liquidated or sold to meet a margin call. Because the securities are collateral for the margin loan, the Firm has the right to decide which security to sell in order to protect its interests.
   • The Firm can increase its "house" maintenance margin requirements at any time and it is not required to provide you advance written notice. These changes in Firm policy often take effect immediately and may result in the issuance of a maintenance margin call. Your failure to satisfy the call may cause the member to liquidate or sell securities in your account(s).
   • You are not entitled to an extension of time on a margin call. While an extension of time to meet margin requirements may be available to customers under certain conditions, a customer does not have a right to the extension.
   
   
5. Day Trading Margin Requirement
   The minimum equity required for the accounts of customers deemed to be pattern day traders shall be $25,000. This minimum equity must be deposited in the account before such customer may continue day trading and must be maintained in the customer’s account at all times.

What is a pattern day trader?

You will be considered a pattern day trader if you trade 4 or more times in 5 business days and your day-trading activities are greater than 6 percent of your total trading activity for that same five-day period.

Union Capital Company also may designate you as a pattern day trader if it knows or has a reasonable basis to believe that you are a pattern day trader. For example, if Union Capital provided day trading training to you before opening your account, it could designate you as a pattern day trader.

Jurisdiction

The information in this internet website is directed exclusively to individuals who are permitted to access in its jurisdiction. The content of this site is not directed for distribution to any person in any state or country where such distribution is contrary to local laws or regulations.

All rights reserved

If you utilize or download any information or software from this site, you accept and agree that you will not copy, remove, or conceal any note regarding Copyright or any other note or legend in such information.

Summary of the Day-Trading Margin Requirements

The rules adopt a new term "pattern day trader", which includes any margin customer that day trades (buys then sells or sells short then buys the same security on the same day) four or more times in five business days, provided the number of day trades are more than six percent of the customer's total trading activity for that same five-day period. Under the rules, a pattern day trader must maintain minimum equity of $25,000 on any day that the customer day trades. The required minimum equity must be in the account prior to any day-trading activities. If the account falls below the $25,000 requirement, the pattern day trader will not be permitted to day trade until the account is restored to the $25,000 minimum equity level.

The rules permit a pattern day trader to trade up to four times the maintenance margin excess in the account as of the close of business of the previous day. If a pattern day trader exceeds the day-trading buying power limitation, the firm will issue a day-trading margin call to the pattern day trader. The pattern day trader will then have, at most, five business days to deposit funds to meet this day-trading margin call. Until the margin call is met, the day-trading account will be restricted to day-trading buying power of only two times maintenance margin excess based on the customer's daily total trading commitment. If the day-trading margin call is not met by the fifth business day, the account will be further restricted to trading only on a cash available basis for 90 days or until the call is met.

In addition, the rules require that any funds used to meet the day-trading minimum equity requirement or to meet any day-trading margin calls remain in the pattern day trader's account for two business days following the close of business on any day when the deposit is required. The rules also prohibit the use of cross-guarantees to meet any of the day-trading margin requirements.

Day Trading Minimum Equity Requirement and Frequently Asked Questions:

What is the minimum equity requirement for a pattern day trader?

The minimum equity requirements on any day in which you trade is $25,000. The required $25,000 must be deposited in the account prior to any day-trading activities and must be maintained at all times.

Why is the minimum equity requirement for pattern day traders higher than the current minimum equity requirement of $2,000?

The minimum equity requirement of $2,000 was established in 1974, before the technology existed to allow for electronic day trading by the retail investor. As a result, the $2,000 minimum equity requirement was not created to apply to day-trading activities. Rather, the $2,000 minimum equity requirement was developed for the buy-and-hold investor who retained securities collateral in his/her account, where the securities collateral was (and still is) subject to a 25% regulatory maintenance margin requirement for long equity securities. This collateral could be sold out if the securities declined substantially in value and were subject to a margin call. The typical day trader, however, is flat at the end of the day (i.e., he is neither long nor short securities). Therefore, there is no collateral for the brokerage firm to sell out to meet margin requirements and collateral must be obtained by other means. Accordingly, the higher minimum equity requirement for day trading provides the brokerage firm a cushion to meet any deficiencies in the account resulting from day trading.

How was the $25,000 requirement determined?

The credit arrangements for day trading margin accounts involve two parties - the brokerage firm processing the trades and the customer. The brokerage firm is the lender and the customer is the borrower. In determining whether the existing $2,000 minimum equity requirement was sufficient for the additional risks incurred with day trading, we obtained input from a number of brokerage firms, since these are the entities extending the credit. The majority of firms felt that, in order to take on the increased intra-day risk associated with day trading, they wanted a $25,000 "cushion" in each account in which day trading occurred. In fact, firms are free to impose a higher equity requirement than the minimum specified in the rules, and many of them already had imposed a $25,000 requirement on day trading accounts before the day trading margin rules were revised.

Does the $25,000 minimum equity requirement have to be 100% cash, or could it be a combination of cash and securities?

You can meet the $25,000 minimum equity requirement with a combination of cash and eligible securities.

Can I cross-guarantee my accounts to meet the minimum equity requirement?

No, you can't use a cross-guarantee to meet any of the day-trading margin requirements. Each day-trading account is required to meet to minimum equity requirement independently, using only the financial resources available in the account.

What happens if the equity in my account falls below the minimum equity requirement?

If the account falls below the $25,000 requirement, you will not be permitted to day trade until you deposit cash or securities in the account to restore the account to the $25,000 minimum equity level.

I'm always flat at the end of the day. Why do I have to fund my account at all? Why can't I just trade stocks, have the brokerage firm mail me a check for my profits or, if I lose money, I'll mail the firm a check for my losses?

This would in effect be a 100% loan to you to purchase equity securities. It is saying you should be able to trade solely on the firm's money without putting up any of your own funds. This type of activity is prohibited, as it would put your firm (and indeed the U.S. securities industry) at substantial risk.

Why can't I leave my $25,000 in my bank?

The money must be in the brokerage account because that is where the trading and risk is occurring. These funds are required to support the risks associated with day-trading activities. It is important to note that the Securities Investor Protection Corporation (SIPC) may protect up to $500,000 for each customer's securities account, with a limitation of $100,000 in claims for cash.

Day Trading Buying Power

What is my day-trading buying power under the rules?

You can trade up to four times your maintenance margin excess as of the close of business of the previous day.

It is important to note that your firm may impose a higher minimum equity requirement and/or may restrict your trading to less than four times the day trader's maintenance margin excess. You should contact your brokerage firm to obtain more information on whether it imposes more stringent margin requirements.

Day Trading Margin Calls

What if I exceed my day-trading buying power?

If you exceed your day-trading buying power limitations, your brokerage firm will issue a day-trading margin call to you. You will have, at most, 5 business days to deposit funds to meet this day-trading margin call. Until the margin call is met, your day-trading account will be restricted to day-trading buying power of only two times maintenance margin excess based on your daily total trading commitment. If the day-trading margin call is not met by the fifth business day, the account will be further restricted to trading only on a cash available basis for 90 days or until the call is met.

Accounts

Does this rule change apply to cash accounts?

Day trading in a cash account is generally prohibited. Day trades can occur in a cash account only to the extent the trades do not violate the free-riding prohibition of Federal Reserve Board's Regulation T. In general, failing to pay for a security before you sell the security in a cash account violates the free-riding prohibition. If you free-ride, your broker is required to place a 90-day freeze on the account.

Does this rule apply only if I use leverage?

No, the rule applies to all day trades, whether you use leverage (margin) or not. For example, many options contacts require that you pay for the option in full, that is at 100%. As such, there is no leverage used to purchase the options. Nonetheless, if you engage in numerous options transactions during the day you are still subject to intra-day risk. You may not be able to realize the profit on the transaction that you had hoped for and may indeed incur substantial loss due to a pattern of day-trading options. Again, the day trading margin rule is designed to require that funds be in the account where the trading and risk is occurring.

Can I withdraw funds that I use to meet the minimum equity requirement or day trading margin call immediately after they are deposited?

No, any funds used to meet the day-trading minimum equity requirement or to meet any day-trading margin calls must remain in your account for two business days following the close of business on any day when the deposit is required.