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| Securities-Based-Lending Legal Disclosure |
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A decrease in the market value of the pledged securities and other investment assets may require the deposit of additional funds or the liquidation of some or all of the pledged securities and assets. A complete description of the loan terms can be found within your loan agreement.
Please note the following risks associated with margin accounts, margin loans and securities-based loans: |
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Borrowing on margin, securities-based loans and using stock as collateral involve a high degree of risk and the investor should read the loan agreement carefully so he or she understands his or her obligations. |
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Market conditions can magnify any potential for loss. If the market turns against the investor, he or she will be required to deposit additional securities and/or cash in the account. |
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The securities in the account may be sold to meet the margin/maintenance call, and the firm can sell investors' securities without contacting him or her. |
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Some or all of the securities pledged as collateral may be sold at prices higher than what it initially cost the investor to acquire the securities. If that happens, the investor may suffer adverse tax consequences. The investor should consult a tax advisor in order to understand fully the tax implications associated with pledging securities as loan collateral. |
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Merrill Lynch Private Finance Inc.—California Department of Corporations Finance Lenders License.
For fixed-rate loans, principal payments made in advance of their due date will be subject to a breakage fee based on any loss or expense incurred by the lender.
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