Securities Services

Securities ServicesA partner for every stage of your issuer’s lifespan.

Give your firm an edge.At Xerox, one of our core competencies is managing business processes and information technology. In the Investment Products industry, we provide investor and transfer solutions to non-traded REITs and limited partnerships. We offer expertise in operations and investor relations along with the flexibility to provide custom solutions tailored to your firm’s specific needs.

Investor Relations

The backbone of our Investor Relations activities is our Securities Services business. It’s organized in a team structure, with each team led by an experienced account manager. Teams typically include a processing representative and two telephone representatives. The size of a team depends on the amount of investors in an issue.

Our team approach allows us greater flexibility than a traditional departmental structure because it enables us to customize our procedures to fit your unique business rules and varying requirements.

In general, our Investor Relations services include:

• Subscription document input• Commission processing, investor

relations call center• Investor distribution management• Transfers• Tax reporting• Use of our multi-million dollar IR20/20

investor relations software and support.

Service Package Options

We offer three levels of service. Our Basic package allows an issuer to be added to a shared team, which may handle three or four different issuers. Experience has shown that our teams can effectively specialize in this number of clients without sacrificing service quality.

For clients who require a dedicated level of service, we offer Gold and Platinum packages. Gold-level clients share a team with only one other issuer. Platinum clients have a dedicated account manager and

team entirely focused on the business of their company.

While our Basic package works very well for most clients, we encourage the Gold or Platinum packages for clients who require a high degree of urgency and personal interaction several times per day.

Proxy Consulting Services

We offer turnkey Information and Tabulation Agent services in connection with proxy solicitations.

These include:

• Project Management• Form creation assistance• Overall strategy• Coordination of vendors for

solicitation mailing• Vote tabulation planning• Phone line set-up for inbound investor calls• Responsive reporting (as frequently

as needed) to ensure up-to-date information in connection with proxy solicitations

• An Inspector of Elections who will travel to your shareholder meeting to assist with the proxy process

• Consent mailing • Coordination of bidding from local

vendors to ensure the best possible price for our printing/mailing projects

• Handling of all communication to and from vendors

• Tabulation and Information Agent • Tabulation services• Telephone number research • Web voting services • Automated telephone voting services • Outbound telephone solicitations to

encourage proxy response

Web PortalInvestor PortalThis interface allows investors to:• View account holdings• Change certain information• View and print related documents

such as transfer requests, fund communications, and tax documents.

Broker PortalThis interface allows brokers to:• View account holdings for the investors

they support• Change broker address, phone, and

email information• View and print related documents

such as transfer requests, fund communications, and tax documents.

Subscription ProcessingOur services include:• Receiving and documenting investment

checks• Depositing checks into escrow accounts• Balancing and reconciling• Documenting approval and tracking

following broker/dealer approval• Communicating and reporting to issuers

approved and rejected subscription documents on a daily, weekly, or other basis depending on the service package

• Creating and mailing Confirmation of Receipt of Funds letters to investors

• Tracking and reporting sales by territory and representative

• Monitoring Blue Sky for compliance purposes

• Screening investors in compliance with Office of Foreign Asset Control (OFAC) regulations

• Leveraging established banking relationships to help you obtain services.

Escheatment ServicesWhat is escheatment?Escheatment is the process whereby unclaimed or abandoned property is turned over to a state authority. The purposes of abandoned property statutes are to: • Reunite lost owners with their property• Prevent subsequent claims by the owner

against a company after it transfers property to the state

• Ensure that, if the owner cannot be found, the economic windfall inures to the citizens of the state and not to the company.

Why do you need escheatment?• It’s mandated by state law.• If you’re audited and found not to be

in compliance, you can be penalized up to 25% of the unreported amount, and over $1,000 per day in some states for the amount of time out of compliance.

Is your company a target for state audit?• Do you issue a large number of checks

and/or drafts?• Are you unsure of your reporting

responsibilities?• Do your books reflect overpayments,

credit balances, or numerous voided checks?

• Do you have unrecorded liabilities such as outstanding checks you’ve written off as income in previous years? Escheatment laws don’t permit you to take this as income.

If you answered “yes” to any of these questions, you stand a high probability of being audited by the state.

As part of our escheatment services, we will:• Identify shareholders with outstanding

checks.• Send a file of the shareholders to our

national database search vendor. • Process results into our contact

management system. • Perform due diligence according to

state guidelines, including mailing notifications to investors.

• Process shareholder responses and reissue checks to shareholders who responded.

• Send the file of shareholders who didn’t respond and the outstanding check amounts to our escheatment vendor for reporting to each state. Funds are then transferred to each investor‘s last known state of residence.

• Maintain records to complete the process each year.

Transfer Agent ServicesAs part of our full-service transfer agent services, we:• Issue the certificate and/or confirmation

statement for the exchange.• Confirm successful delivery of request

and process the transfer within the required legal time frame as established by stock transfer government agencies.

• Perform transfers and allocations as of effective dates.

• Update investor and investment files on our server.

• Reject any transfer request not in good delivery form, with clear communication specifying the requirements for completion. Any forms or written materials used in this communication are subject to your approval.

• Cooperate with your independent public accountants and take all reasonable action to make any information available to them as they or you request.

• Send confirmation of transfers to both transferer and transferee.

• Handle phone and written inquiries about issues and items, including but not limited to transfers, address changes, subscription inputs, and distribution checks.

• Scan all documents received to facilitate accurate tracking of processes.

• Maintain appropriate records to monitor response time, including date-time stamping of all written correspondence received.

• Provide SEC auditors access to all transfer documentation and assist them in any efforts to verify compliance with their rules and regulations.

• File necessary reports with regulators.• Provide reports to your firm on a

periodic basis with current transfer information, including transfer logs.

• File Lost Certificate Reports for all lost certificates as required by the Securities and Exchange Act of 1934 Rule 17f-1.

• Maintain the investor database and periodically search for investors whose mail has been returned to our office, as required by SEC Rule 17-Ad17.

Document HostingOn top of our multi-million dollar investor relations system, we also have state-of-the-art document hosting capability which further enhances our sophisticated platform.

As a user of IR20/20 (including remote users), you have the ability to view, print, or email images of subscription

documents, transfer documents, or any other document from any of your investors’ records. You also have the power to access documents by date or document type. Imagine how many phone calls, emails, and hours of searching this will save you.

What does this mean to you?

With a few clicks, you can print every transfer for the last quarter. This will greatly enhance your ability to keep appropriate documentation for compliance and provide quick reference for your operations and sales staff.

Our document-viewing ability will also be made available to your remote wholesalers who may need critical information from a subscription document while in the field.

Sometimes having the right information at your fingertips can make the difference between a successful sale and a near miss. We’ve added all the bells and whistles to ensure your sales and operations processes are as seamless as possible.

To that end, our system works both ways. You also have the ability to upload files into our document-hosting module within the investor relations system.

Our solutions increase processing speeds, ensure proxy and business rules enforcement, provide call center and transfer agent functions, and enable firms to spend more time growing their business.

In today’s economy, that can mean all the difference.

Securities Services

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Tax Processing – K-1s and 1099sWe are one of the largest K-1 filers in the United States. Our experienced tax preparation team is ready to meet your tax needs with the following services:• Obtaining and creating current-year

Schedule K-1 and 1099 tax forms (PDFs).• Creating and e-filing tax forms with the IRS • Printing and mailing tax forms for investors• Faxing and emailing tax forms, if requested • Setting up a pre-recorded message and

telephone service for investors inquiring about tax forms

• Responding to investors with reprints of tax documents, if requested

• Providing document storage of tax forms within the IR20/20 system and on the Web.

If you file Schedule K-1s, our proprietary tax processing software interfaces with IR20/20 and enables us to input your information from the master 1065. Using this software, we can easily calculate Schedule K-1s for your investors. We can also combine your 1065 file with the investors’ K-1s to meet your filing requirements with the IRS.

For those that file Form 1099s, we can create reports from our databases, generate 1099s for the investors and electronically file them with the IRS.

Wholesaler System – Sales TrackingOur wholesaler module was designed with your sales force in mind. You can choose from a variety of standard sales reports or customize your own. Since the sales, investor and broker data are entered in the same system, the options are limitless.• A single screen provides sales, contact and

fulfillment information at the representative, branch, or broker/dealer level.

• Information is available to your internal sales staff as well as your external sales force via the Internet.

• Contact information can be entered quickly and categorized in your custom categories.

• Detail regarding brokers can be entered on the Broker Profile screen with your customized labels so your staff can personalize each conversation.

• Order entry and fulfillment of your marketing materials is quick and easy,

allowing materials to be shipped to alternate addresses for brokers or wholesalers on the road.

• A Mass Order Entry feature allows for quick distribution of launch materials to brokers selected by your staff or those meeting certain sales criteria in the last fund.

• Sales information at the investment detail level as well as summarized by product type, fund, and year is available from system screens or in reports.

• A separate Key Accounts screen allows users with separate security level to enter private contact information regarding the various key contacts for each broker/dealer.

• Our system also interfaces with DST Fan Mail and/or the DTCC AIP system for those broker/dealers who receive consolidated statements through those services. Your company’s sales can be included.

Distribution and Commission ManagementLet us manage your distribution and commission processes from start to finish.

We have received overwhelmingly positive feedback for our flexible and accommodating distribution system.

Our distribution model was written with the investor and the issuer in mind, and designed to be both convenient and cutting-edge. Distribution services are included in the base monthly fee.

Our commission services allow you to take a step back from the operational worries of running an investment company. We already have established relationships and methods dealing with several leading broker/dealers.

We work directly with broker/dealers to set up a seamless commission payment plan and report back to you with the total and balancing figures when the payment is ready to go.

Our commission calculation process can calculate broker/dealer allowance fees as well as commissions on sales that are based on a straight percentage, deferred over time, or tiered based on the amount of the sale.

We can pay distributions and commissions by ACH, wire, check or any combination of these methods.

Management of the distribution process includes payments to a dividend reinvestment plan (DRP) by check to secondary addresses, IRA custodians, and even special requests to split the distribution check to multiple addresses or payment methods.

Our proprietary software also allows setup of seasonal addresses, greatly reducing the hassle investors face when making redundant changes to their payment mailing address every six months.

Schedule a Demo or Learn More Schedule a free demo to see first-hand what we can do for you. We welcome the opportunity to discuss how we can improve your company.

If there’s anything we haven’t covered here that’s of interest to you, please let us know. We love to hear about what we can do to make our systems even more empowering and convenient for our clients and have the ability to customize our software to your unique needs. Some customizations may require a programming fee to complete.

Contact Us214.887.7398investorservices@xerox.com