Account protection you can count on UBS deeply values the trust you place in us and our ability Commission (SEC), whose “Net Capital” rule is designed to help you grow and protect your assets. You can feel to protect you against the risk of a broker-dealer’s failure. confident that your UBS Financial Services Inc. account is The Net Capital rule specifies levels of positive net worth one of the safest places to hold your assets. Your account the firm must maintain. UBS Financial Services Inc. must is protected in a variety of ways that all work together meet capital requirements at all times, and regulators to give you greater peace of mind, including the: carefully monitor these levels. If a firm’s net capital were – Financial strength of the parent company, to fall below the required minimum level, that firm would UBS Group AG. be immediately forced to obtain additional capital, merge – Security and stability of UBS Financial Services Inc.1 with a financially stronger firm or cease all operations as – Control policies and procedures employed across all a broker-dealer and return all client property. our organizations to segregate customer assets. – Protection provided by the Securities Investor UBS Financial Services Inc. has an established history of Protection Corporation (SIPC®) and our supplemental operating in compliance with the SEC’s net capital insurance policy. requirements and maintaining net capital at levels – Eligibility of Federal Deposit Insurance Corporation substantially exceeding those required under the (FDIC) insurance for UBS Bank USA deposit accounts. Net Capital rule. – Capital strength of UBS Bank USA, where most UBS Financial Services Inc. clients’ bank deposits As of March 31, 2021, UBS Financial Services Inc.’s net are held. capital was $1.143 billion, which exceeds the minimum net capital requirement by $1.004 billion. We’re strong and secure. So you can feel the same way. Rigorous controls that keep your securities safe For over 150 years, UBS clients have benefited from the A number of rigorous control and segregation firm’s ability to demonstrate financial strength through requirements help ensure that the securities you hold ever-changing economic climates. UBS AG remains one with us are as safe as those held at other regulated of the world’s best-capitalized banks in its peer group as financial institutions. witnessed by BIS Basel III Common Equity Tier 1 (CET1) capital ratio of 13.6% as of March 31, 2021. – Your securities are legally your property, not part of a broker-dealer’s assets or capital. The SEC UBS Group AG, our parent company, owns UBS Financial imposes a stringent “Customer Protection” rule that Services Inc. and UBS Bank USA as well as a number of governs the custody and use of clients’ securities and businesses that offer specialized services for the needs of cash. As a UBS Financial Services Inc. client, your its clients, while also contributing to the consolidated securities are not exposed to the claims of its general firm’s diversification and growth globally. In the US, creditors because, similar to custody accounts with wealth management services are provided primarily banks and trust companies, client securities are not through UBS Financial Services Inc., a registered broker- assets of the financial institution. dealer and an indirect wholly owned subsidiary of UBS – UBS Financial Services Inc. may not use your Group AG. This means that the parent company, UBS securities without your written consent. A broker- Group AG, and its subsidiaries are separate corporate dealer may not lend (rehypothecate) client securities entities. The separation helps to ensure that assets held at unless they are held in a margin account, and a one entity will not be at risk due to the failure of lack of margin debit balance exists in that account. Strict capital at a related entity. regulatory limits and protections govern the use of client securities. Exceeding net capital requirements set by the SEC – You benefit from the safety of rigorous security As a registered broker-dealer, UBS Financial Services Inc. holding practices. Under the “Customer Protection” is subject to oversight by the US Securities and Exchange rule, clients’ fully paid and excess margin securities 1 of 3 must be in the broker-dealer’s possession or control $1.9 million in protection for cash held in all of the client’s and must be segregated for the exclusive benefit of the accounts. The aggregate policy limit applies to all of the clients. Broker-dealers are also obligated to establish UBS broker-dealers covered by this policy (primary broker- a “Special Reserve Bank Account” for the exclusive dealers: UBS Financial Services Inc., UBS Securities LLC benefit of their clients. They must account for and and UBS Financial Services Incorporated of Puerto Rico) physically inspect or otherwise verify every security as a group, not to each individually. A full copy of the owned by them or by clients or due from broker- policy wording is available upon request. UBS Financial dealers, at least once every calendar quarter. The firm Services Inc. also carries a Stockbrokers Blanket Bond regularly balances and reconciles the records of its covering customers’ securities in our possession (which securities holdings at its depositories. covers losses due to employee dishonesty, theft, destruction, or other perils) and Excess Vault Insurance Your accounts are protected by SIPC2 (which provides all-risk coverage for the physical loss or UBS Financial Services Inc. is a broker-dealer, so your damage to securities held by UBS Financial Services Inc.). securities, including money market mutual funds and cash held in your securities accounts with us, are further UBS Bank USA protected by the Securities Investor Protection Corporation For many clients, available “cash” in their UBS Financial (SIPC) and by supplemental insurance we maintain with Services Inc. securities account(s) is “swept” daily to bank London Insurers. deposit accounts held at UBS Bank USA (member FDIC), an indirect wholly owned subsidiary of UBS Group AG. SIPC provides customer protection in the event that one of UBS Bank USA is capitalized separately from UBS Financial its member firms fails. SIPC insurance does not come into Services Inc. and is considered “well-capitalized.” play unless two conditions are met: 1. A broker-dealer fails; and FDIC insurance 2. At the time of the failure, client securities held in Deposits at UBS Bank USA are not protected by SIPC but custody cannot be accounted for. In these unlikely are instead eligible for insurance by the Federal Deposit events, SIPC would step in as quickly as possible and Insurance Corporation (FDIC) up to $250,000 for each work to return clients’ cash, stock and other securities. insurable capacity in which you hold your deposits account (e.g., individual, joint, corporate, retirement). Funds held If no client securities are missing, clients will receive all under any form of joint ownership valid under applicable their securities back. If sufficient assets are not available in state law are eligible for deposit insurance up to $250,000 the broker-dealer’s client accounts (including the Special per owner, in accordance with FDIC rules. Reserve Bank Account) to satisfy claims for the net equity value of client accounts, SIPC’s reserve funds are used to Your funds become eligible for deposit insurance supplement the distribution, up to a ceiling of $500,000 immediately upon placement in your deposit accounts. per client, including a maximum of $250,000 for cash Generally, any accounts or deposits (including certificates claims. These limits apply to each “separate” client. A of deposit issued by UBS Bank USA) that you maintain client who holds accounts in separate capacities (single directly with UBS Bank USA, or through an intermediary name, joint tenant, trust accounts) may be entitled to (such as UBS Financial Services Inc.) in the same insurable separate protection for those accounts if SIPC capacity in which the deposits in the deposit accounts are requirements are met. Additional funds may be available maintained, will be aggregated with the deposits in your to satisfy the remainder of client claims after the cost of deposit accounts for purposes of calculating the maximum liquidating the brokerage firm is taken into account. insurance amount. For more information, you may visit sipc.org. Note that if you hold multiple securities accounts with Supplemental protection for greater peace of mind UBS Financial Services Inc. in the same insurable capacity UBS Financial Services Inc. and certain affiliates have that sweep available cash balances through the bank purchased supplemental insurance from London Insurers sweep programs, once cash in those securities accounts to augment the SIPC protection. The supplemental policy exceeds $250,000 in the aggregate (per insurable is subject to policy conditions and limitations and has an capacity), then your funds on deposit with UBS Bank USA aggregate policy limit of $500 million. Within this will exceed FDIC insurance coverage limits. aggregate policy limit, each separate client has up to 2 of 3 You are responsible for monitoring the total amount parent company of the UBS Group. Its subsidiary, UBS AG, of deposits that you have with UBS Bank USA in is authorized to engage in banking activity pursuant to the order to determine the extent of deposit insurance Federal Banking Law of Switzerland, and through its US coverage available to you. branches as a foreign banking organization under federal US banking law. The FDIC, in turn, is backed by the full faith and credit of the US government. UBS Bank USA’s most recent The UBS AG Stamford branch (the “Stamford Branch”) is regulatory call report may be found on the FDIC website not a separate legal or capitalized entity from UBS AG.