Becoming A Customer

SICOR Securities, Inc.

How?

• In order to establish the client (customer) relationship between yourself, as a registered representative of the firm, and a person, you must have the prospective customer complete the firm’s Personal Profile form; and, then, submit it for supervisory review and acceptance.

Why?

• The firm must provide the prospective customer with certain disclosures, agreements and privacy policy choices.

• The prospective customer must agree to abide by the regulations of the securities industry in our relationship with them.

• We need to know certain details about them in order to provide them with appropriate (suitable) services.

Customer Identification Program

• Each customer must be identified by a unique federal identification number, that is a Social Security Number if an individual; a Taxpayer Identification Number if a legal entity without employees; or an Employee Identification Number if a corporate entity.

• A Permanent Resident Alien must have a SSN number.

Customer Identification Program

• Each customer must provide verifiable proof of identity. The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism ("USA PATRIOT Act"), a.k.a. Anti-Money Laundering and Anti-Terrorism Act of 2001, enacted on October 26, 2001 requires the establishment of a customer identification program (CIP), which includes enhanced customer identification and verification.

• The firm’s CIP requires that an individual provide for representative’s inspection a valid driver’s license issued by any state of the United States of America or, if unavailable, state issued identification or passport, which must be noted on the Personal Profile SUPP1 page when requesting acceptance.

The Personal Profile

What Is It?

• The Personal Profile is this firm’s customer information gathering tool used in order to comply with SEC Rule 405.

• The Personal Profile is detailed and contains a significant amount of the necessary disclosure information and a pre-dispute arbitration agreement.

• The Securities and Exchange Commission Rules (SEC) defines the “client profile” as the information necessary in order to adequately identify and provide services to a customer.

Used For?

• The Personal Profile is utilized by this firm’s designated supervisory persons in reviewing for acceptance a prospective client of the firm, reviewing activity in a client’s account(s), reviewing any recommendation made / to be made, etc.

• The Personal Profile is used in lieu of a “new account form” or “account application” as the firm does NOT hold client assets.

• The “customer” or “client” relationship is established ONLY upon the acceptance, by a Registered Principal designated as a supervisor of the firm, of a complete and properly signed Personal Profile form.

Used How?

• The Personal Profile data gathering form is to be completed and signed by the prospective customer.

• The representative is to complete the SUPP1 page.

• The representative may assist the customer in providing answers to questions.

• The representative may “pre-fill” information as long as it is subsequently reviewed and signed by the customer.

Used When?

• The Personal Profile must be completed prior to the transaction of any new business in an existing account, prior to opening a new account or prior to making any recommendation.

• “New Business” is the investment of any funds into a new or existing account, other than by automatic periodic deposit.

Federal Identification Number

• It is one of the following:– The client's Social Security Number (SSN) if

an individual– The client's Employer Identification Number

(EIN) if a corporation– The client's Taxpayer Identification Number

(TIN) for all other legal entities

Nationality?

• Since the firm may conduct business with Permanent Resident Aliens this information (citizenship aka nationality) is necessary pursuant to FinCEN’s Customer Identification Program requirements.

Driver’s License Number

• Again, pursuant to FinCEN’s Customer Identification Program compliance we need to document that the prospective customer was properly identified to our agents (representatives).

• Alternately, you may accept for review a prospective customer’s Passport as identification.

• This is recorded on the SUPP1 page of the Personal Profile.

Assets & Liabilities?

• In order that supervisory personnel can be adequately cognizant of the financial circumstances of the customer, it is necessary that the supervisor have such information available in evaluating the suitability of recommended investments.

• SEC Rule 405

“Target” Asset Allocation?

• Part of the “risk” assessment relating to each customer is the concept of investment “time horizon”.

• Dependent upon the customer’s indicated “time horizon” and your planned, recommended investment strategy; where do you project the customer will be at the end of the time period indicated?

• Is what you have planned really of benefit to the customer? And how beneficial?

• This is recorded on the SUPP1 page of the Personal Profile.

SAL1 Page?

• It can be used instead of SAL’s “New Account Form” when opening a brokerage account for a new customer.

• The SAL “Client Agreement” document still needs to be completed in addition.

SUPP1 Page?

• It is to be used by the representative to indicate the “Target” Asset Allocation.

• It is to be used by the representative to indicate the proposed asset distribution in the customer’s brokerage account(s) (if opening a brokerage account(s) for the customer).

• It is to be used by the representative to indicate their review of the information provided by the prospective customer on the Personal Profile.

Privacy Policy

• The Personal Profile provides for the customer’s selection of privacy options in compliance with the Graham-Bliley-Leach Act.

Arbitration Agreement

• The Personal Profile contains a pre-dispute arbitration agreement clause in its service agreement between the customer and this firm.

Disclosures

• The Personal Profile contains required disclosures regarding “day trading”, registration and the PATRIOT Act verification of identity requirements.

The Customer Declines…

• The NASD and SEC have ruled that, due to the complex nature of financial advise, financial services and investments cannot be appropriately recommended to clients without adequate knowledge of this information; effectively, preventing registered representatives from providing services to clients who decline to provide this information as the responsible broker-dealer firm’s designated supervisory personnel cannot perform their regulatory imposed duties without this knowledge of the financial circumstances of the client in relation to investment suitability.

• The representative may not provide any services, in any manner, to a potential client who has not been accepted by a designated supervisor of the firm.

Requesting Acceptance

How?

• Supervisory acceptance can be requested by:– Faxing the completed Personal Profile to the

corporate office.– Uploading the completed Personal Profile to

the customer’s CONTACT record via the firm’s web site. Then, requesting customer acceptance.

Using Facsimile

• The firm accepts business conduct documentation its fax system:

• 937-890-1335• 937-890-8616

• The most common problem with the system is that it fails to answer if someone’s fax “hangs” the phone line open.

Using The Web

• The firm’s web site HELP section, at http://www.tisholdings.com/help.aspx, provides a document titled “Its All About The Contact” that explains how to establish a (prospective) customer CONTACT record via the firm’s secure web site.

• A CONTACT record is the equivalent of a digital Personal Profile.

Upload Documents

• Once the customer’s CONTACT record has been created, you can attach (upload) the Personal Profile.

Attaching A Document

Using Web Request

• After the Personal Profile is attached, use the SPECIAL menu of the CONTACT, choose “Request Customer Acceptance”.

What Happens Next?

Accept, Reject or Remedy

• An ALERT will be sent to your supervisor that the prospective customer needs to be reviewed for acceptance.

• The supervisor will either:– Accept the potential customer– Reject the potential customer– Enter a REMEDIAL NOTICE for incomplete or

required additional information

Acceptance

• You will receive an ALERT, via the firm’s secure web site, informing you of the customer’s acceptance.

Rejection

• You will receive an ALERT notifying you of irreparable deficiencies precluding the firm from offering services to the prospective customer.

• You will be precluded from working with this party.

Remedy Required

• You will receive the following ALERT:

How Long Does It Take?

• For submissions via fax, it takes about 24 hours for the clerical staff to enter the information and a supervisor to review.

• For submissions via the firm’s web site, where all the information is entered into the CONTACT record, with the completed Personal Profile attached, we will attempt to respond within 20 minutes to 1 hour.