Good Faith Violation (“GFV”)

Regal Securities through its clearing agent Penson Financial Services, Inc. is required to implement a new policy concerning unsettled funds. Effective immediately, your account will be charged with a Good Faith Violation if you purchase a security in a cash account and sell that security to purchase another using unsettled funds. Three (3) GFVs in any twelve (12) month rolling period will result in your account being restricted to “Funds in Advance” of trading for a period of 90 days. If an account trades through a 90-day restriction, any resulting loss in the account will be the responsibility of the client and your account may be coded for "no more business."

Example:

• On Monday customer sells “A” for $5,000, but holds no cash in his account
• On Monday customer buys “B for $5,000
• On Monday, Tuesday or Wednesday customer sells “B”, prior to the settlement date of “A”

In this example, the account would have been charged with a Good Faith Violation (“GFV”). The settlement date of security “A” is Thursday. If the customer had sold security “B” on settlement of the sale of “A”, then the purchase of security “B” would have been “fully paid” and no violations would have occurred.

For questions contact Regal at 1-800-92-REGAL.