A User s Guide to Self-directed Brokerage Accounts (SDAs) From Retirement Brokerage Services

Transcription

1 A User s Guide to Self-directed Brokerage Accounts (SDAs) From Retirement Brokerage Services

2 Table of Contents Introduction Managing Your Self-directed Brokerage Account (SDA) Funding Your SDA pg. 3 Transferring or Withdrawing Funds From Your SDA pg. 3 Trading, Settlement And Available Funds pg. 4 Chase Online pg. 5 Brokerage By Phone pg. 6 Statements And Confirmations pg. 7 Granting Access To Your SDA pg. 7 Obtaining Forms And Information pg. 7 Introduction Thank you for opening a self-directed brokerage account (SDA). Your SDA complements your plan choices by offering you a broader array of investment options. Within your SDA, the investment options available to you are determined by your employer. They may include: Mutual funds. Select from more than 14,000 mutual funds, including over 5,000 no load and no transaction fee (NTF) 1 funds. Stocks. Invest directly in publicly traded companies. Fixed-income securities 2. Choose from a broad range of Treasuries, agency and corporate bonds. Options 3. If permitted, you may apply to trade exchange-listed equity options. The specific provisions of your SDA, including your investment options, can be found in your Self-directed Brokerage Account Plan Profile (SDA Profile), located on your retirement plan s website. We re Here To Help Your SDA is part of Retirement Brokerage Services, an offering of J.P. Morgan Securities (JPMS). We hope you ll read this User s Guide carefully, and we encourage you to contact the SDA Service Center at with any questions. Our Retirement Brokerage Specialists are available to assist you from 8 a.m. to 7 p.m. Eastern Time, Monday through Friday. You may also use secure , available through a link on Chase Online, to write to us. We are always ready to help you. Please call the SDA Service Center for assistance at Retirement Brokerage Specialists are available between 8 a.m. to 7 p.m. Eastern Time, Monday through Friday. Recordkeeping and administrative services for the retirement plan provided by J.P. Morgan Retirement Plan Services LLC ( (J.P. Morgan); securities transactions for the retirement plan may be introduced by J.P. Morgan Institutional Investments Inc. (JPMII), member FINRA/SIPC. Retirement brokerage services are offered by J.P. Morgan Securities, LLC (JPMS), member FINRA/NYSE/SIPC. J.P. Morgan, JPMII and JPMS are affiliates of J.P. Morgan Chase & Co. INVESTMENT PRODUCTS: NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE

3 3 Managing Your SDA This Guide provides you with the information, resources and tools you need to manage your SDA. Funding Your SDA 4 Once your SDA has been established, you will need to fund it by transferring monies from your plan s core investments or, if allowed by your plan, by directing a percentage of your plan contributions to your SDA. Your SDA Profile sets forth the specific provisions for your plan, including funding options and transfer requirements. Transfers To Your SDA You can transfer money from your core investments to your SDA, by either selecting a dollar amount to transfer from an investment or selecting100% of a core investment to transfer. This transfer can be made through your retirement plan s website or by calling the SDA Service Center. Transfers initiated before 4:00 p.m. Eastern Time will be processed the same day. Those initiated after 4:00 p.m. Eastern Time will be processed the next business day. The maximum amount you can transfer into your SDA is determined by your plan. Direct Payroll Contributions Once you have established your SDA, if permitted, you may direct a percentage of your plan contributions into the SDA. Simply indicate the percentage that you would like to allocate by designating it on your enrollment form (if applicable), through the future allocations section of your retirement plan s website or by calling the SDA Service Center. Funds deposited into your SDA will be invested in a money market sweep fund 5 until you select an investment. You may call the SDA Service Center to place trades using those funds, starting on the day you place the transfer request. The next business day after you initiate the transfer, you can view your transferred balances on Chase Online and place online trades. Transferring or Withdrawing Funds From Your SDA Transfers To Your Core Investments To transfer funds from your SDA back to your plan s core investments, please follow these steps: 1. Check that you have enough money in your SDA money market sweep fund to cover the amount of your transfer, leaving sufficient funds to settle any open trade orders. You can review your SDA balances online or by phone. 2. Transfer from the sweep fund to your plan s core investments 6 by visiting your retirement plan s website or by calling the SDA Service Center. There is no minimum transfer amount. Withdrawals If you are eligible for a withdrawal from the plan, you have two options: Cash Although you cannot directly withdraw funds from your SDA, you may transfer monies from the SDA to your core investments to take a withdrawal, subject to your plan s provisions and/or other qualifying events. In-kind Transfer To A Rollover IRA Subject to your plan s provisions, you may transfer the assets in your SDA in-kind (i.e., no buy/sell is required) to a Rollover IRA upon a qualifying event. Please call a J. P. Morgan Retirement Plan Services representative at for assistance. Loans The funds in your SDA are included in your overall vested balance in determining the maximum amount available for a loan. However, the monies cannot be withdrawn directly from your SDA to fund the loan. If enough money exists in your core investments, the loan will be disbursed using these funds. If not, it will be necessary to transfer money from your SDA back into your plan s core investments. (See Transfers To Your Core Investments.)

4 :00 a.m. to 7:00 p.m. Eastern Time, Monday through Friday Trading, Settlement And Available Funds When you re ready to buy or sell, you may place trades online, call the SDA Service Center or use Brokerage by Phone. You can execute trades in your SDA as you would in any other brokerage account. All trades are subject to review against your plan s provisions. Settlement Date = Execution (Trade) Date + 1 Treasury Securities Options Mutual Fund * *Mutual fund settlement dates may vary Settlement Date = Execution (Trade) Date + 3 Stocks Corporate Bonds Municipal bonds Funds for your purchases are taken from the available cash in your money market sweep fund on settlement date. When you sell, proceeds from the sale are deposited into your money market sweep fund on the settlement date. Trade settlement timeframes vary by security type. Your SDA money market sweep fund must have sufficient funds available to cover the cost of your purchase, including commission. Commissions and fees for your SDA can be found on your retirement plan s website in the Retirement Brokerage Services section, or by calling the SDA Service Center at If you are trading online, check the commission charges carefully before you trade; they will not appear on your online trade ticket but will be noted on your trade confirmation. If you have more than one open trade order, you must have enough funds in your SDA money market sweep fund to cover the potential execution of all your open trade orders. If you have insufficient funds, money may be transferred from your plan s core investments to your SDA to execute trades or cover outstanding debit balances. JPMS may also liquidate your most recent purchase in order to cover any outstanding debit balances in the SDA s money market sweep fund. Broker-assisted commissions will apply, and you will be responsible for any losses incurred. You are responsible for all trades placed in your SDA. For more details, please refer to your Account Agreement. For a copy of the Account Agreement, please call the SDA service Center. When you are ready to place your trade, please have the following information available: SDA number Type of transaction Security or fund name, symbol or CUSIP number Order quantity Trade Control Policy If you exchange any amount out of certain investment options, such as mutual funds, you will not be permitted to purchase shares of the same investment option through investment transfer activity for 30 calendar days. This restriction does not apply to investments made through your payroll contributions, loan repayments, employer contributions or rollover purchases. If you have questions regarding this policy call J.P. Morgan Retirement Plan Services or visit your retirement plan website. Mutual Fund Share Class When investing in a mutual fund, you may have the opportunity to choose among several share classes, most commonly Class A, Class B, and Class C. The differences among these share classes typically revolve around how much you will be charged for buying the fund, when you will pay any sales charges that apply, and the amount you will pay in annual fees and expenses. You can research funds with no transaction fees with the SDA Fund Screener. When viewing your brokerage account, click the SDA Fund Screener. This multi-class structure offers you the opportunity to select a share class that is best suited to your investment goals. If you have any questions about a mutual fund s share class, please contact the SDA Service Center at or your retirement plan s website. Representatives are available weekdays from 8 a.m. to 7 p.m. Eastern Time. Market Timing Mutual funds are designed for long-term investors, not active traders who attempt to time the market. Most mutual funds implement practices and procedures to protect shareholders from investors who are active traders and seek to practice a market-timing strategy. Market timing involves the rapid buying and selling of mutual fund shares in an attempt to realize short-term profits. This excessive trading of mutual fund shares may disrupt a fund s investment strategy. It may also negatively influence a mutual fund s performance results. Mutual funds use a variety of techniques to discourage investors from using mutual funds to practice market timing, including imposing redemption fees, implementing trading restrictions, and identifying and isolating market timers. CISC does not condone frequent or excessive trading, including of mutual fund shares, and monitors its accounts to detect such activity. CISC reserves the right, in its sole discretion, to restrict or terminate Accounts in which frequent or excessive mutual fund trading occurs. Good Faith Violation (GFV) We are required to monitor your trading activity to make sure that it complies with the Federal Reserve Board s (FRB) Regulation T (Reg. T). In other words, purchased trades are paid for (or securities sold), are received in a manner consistent with, and according to, the timeframes established by Reg T and SEC 15C3-3. Reg T, Section 220.8, defines the following requirement in cash accounts:

5 5 A creditor may buy for a client any security, assuming the existence of sufficient funds in the account. The creditor may also accept in good faith the client s agreement to promptly make full cash payment for the security before selling it, and not contemplate selling it prior to making such payment. Selling a security before it is fully paid for is termed a Good Faith Violation. A purchase is not considered paid for if unsettled proceeds from a sale are being used. The purchase will only be considered paid for if the proceeds from the sale have settled. If a client makes a practice (three times in a 12 month period) of selling securities in a cash account prior to paying for the purchase with settled funds, the account will be restricted to cash and securities on hand, also known as a 90 Day Restriction. The account will be restricted for 90 days from purchasing securities, unless necessary funds are in the account prior to order entry. A letter will be sent to you in the event a restriction is placed on your account. Freeriding Violation A freeriding violation occurs when a client directly or indirectly makes a transaction in a cash account so that the cost of the securities purchased is met by the sale of the same securities. A client must make full payment for purchases made in a cash account independent of the sale of the same security. If a client makes one freeriding violation, the penalty is the same as that described above for a Good Faith Violation. Chase Online To manage your SDA online, log on to Chase Online 8. You can place trades between 6 a.m. to 11 p.m. Eastern Time. All other brokerage information is available 24 hours a day, 7 days a week. You can use a link on your retirement plan s website, or log on directly at If you need help in accessing your account online for the first time, call the SDA Service Center. Please allow 2 days from the time you request your account to be opened before calling the SDA Service Center. Once your account access has been established, you will be asked to read and agree to online customer agreements, including the Chase Online End User Agreement, before you can proceed. Once you ve logged in, you ll have access to market data and information on investments. Tracking Tools and Services Chase Online has tools available to help you monitor your current investments and make informed investment decisions. Mutual fund screeners: identify mutual fund investments from Lipper s database of funds using criteria such as fund type, total return performance, Lipper Leader ratings and other attributes; research exchange traded funds (ETFs) by viewing performance vs. peers or against Lipper s proprietary scorecard ; research no transaction fee funds through the SDA Fund Screener and obtain fund information, portfolio allocations and total return performance. Market news: stay current with market events by accessing market commentary, most active stocks, market indices and headlines for a comprehensive overview of daily market activity and key drivers. Market data and news are provided by Dow Jones. Charts: monitor investments by tracking daily and intraday activity with advanced interactive charts and comparing performance vs. available indices. Charts can be customized and overlaid with technical indicators. Watchlists: create up to three watchlists composed of 10 securities each, and update preferences at any time. A daily, weekly or monthly delivers stock closing prices, volumes and 52-week highs and lows. The watchlist can be viewed as a slide show or can be detached as a ticker or separate window. Quotes: get real-time quotes on the trade ticket screens. Quotes are delayed by 20 minutes on the summary account pages and watchlist. Trades placed via Chase Online qualify for lower, web-based commissions. To initiate your trade, click on your account to get to the Portfolio Holdings page. Click on the Trade link, then select Order Summary, Equity Order Entry, Option Order Entry, or Mutual Fund Order Entry. (Please note: You will need to disable Pop-Up Blockers when you access chase Online.) Trading choices include Price Type (Market, Limit, Stop Loss, Stop Limit) and Time in Force (Day, Good Till Cancelled). Quotes shown on the trade ticket screen are real-time during market hours. After trades are placed, their status can be monitored on the Order Summary Screen. Executed trades are reflected on your Account Activity screen the same day they execute.

6 :00 a.m. to 7:00 p.m. Eastern Time, Monday through Friday Brokerage by Phone You may use any touch-tone phone to obtain information about your SDA balance and holdings, access market information, obtain real-time quotes and even place orders. 9 Before accessing Brokerage by Phone for the first time, you must obtain your User ID and PIN from the SDA Service Center. Once you have your User ID and PIN, you can call , choose Brokerage by Phone from the main menu and enter or speak your User ID and PIN. Brokerage by Phone allows you to access the information you need by speaking a command or pressing a touch-tone key. Common Brokerage By Phone Commands Global Commands To... Using Phone Keypad Using Voice Commands Go Back Press 8 Say Go Back Repeat a Menu or Message Press 7 Say Repeat Speak to a Representative Press 0 Say Representative (at any time) Get Help Press * Say Help End Call Say Goodbye Return to Main Menu Say Main Menu Skip Menus or Move Ahead Quickly Press the menu option you want at any time Say the menu option you want at any time Get Information To... Using Phone Keypad Using Voice Commands Go to Main Menu Say Main Menu at any time Get Account Details Press 1 Say Account Details Get Positions Press 1, then 1 Say Positions Review Recent Transactions Press 2 Say Transactions Get Quotes Press 4 Say Quotes Get Stock Quotes or ETFs A Press 4, then 1 Say Quotes then Stocks Get Mutual Fund Quotes A Press 4, then 2 Say Quotes, then Mutual Funds Get Index Quotes A Press 4, then 3 Say Quotes, then Index Hear your Watchlist Press 3 Say Watchlist Get Options Quotes B Press 4, then 4 Say Options Quotes Place a Trade Press 5 Say Trading Get Additional Quote Information (press Press 1 Say Details or say Menu Option at any time during quote) Change to a Different Account Say Change Account at any time A All quotes are real-time. Trades placed when the markets are closed will be submitted on the next business day when the markets are open. B Options are not suitable for all investors.

7 7 Statements And Confirmations You can efficiently manage your SDA with comprehensive reporting available online and in print. Integrated quarterly statements from J.P. Morgan Retirement Plan Services reflect both retirement plan activity and SDA balances and positions. Brokerage statements and confirmations are available online and can also be delivered by mail. Brokerage statements and confirmations can be viewed online for 36 months. To sign up for paperless statements and/or confirmations, log on to Chase Online and select the Go paperless icon. Follow the prompts to elect to receive either How To Enter Security Symbols Voice Recognition Simply say the name of the company or security. confirmations or statements or both electronically. SDA balances show available cash. Online, you ll see cash balances, money market value and how much cash you have available to purchase securities.your statement will include summary information about money market funds and available cash for the current and prior period. Portfolio information such as the percentage of your portfolio held in cash and cash equivalents, and estimated annual income is also provided. Cost basis information is shown on statements for securities purchased in your SDA. Transaction history is available online for 18 months. Keypad Entry: Each letter is comprised of two keystrokes. The first is the numerical key that the letter is located on, the second indicates the letter s position on the key (1,2,3,4). For example, A = 21, Z = 94. Say Instructions to hear step-by-step instructions and additional examples. For the Letter Enter For the Letter Enter For the Letter Enter For the Letter A 21 H 42 O 63 V 83 B 22 I 43 P 71 W 91 C 23 J 51 Q 77 X 92 D 31 K 52 R 72 Y 93 E 32 L 53 S 73 Z 99 F 33 M 61 T 81 G 41 N 62 U 82 Enter Granting Access To Your SDA If permitted by your retirement plan, you may wish to authorize someone else, such as a family member, third party advisor or tax planner, to view your SDA and place trades on your behalf. You will need to complete the Trading Authorization Form for SDAs to establish these privileges. Check your Summary Plan Description (SPD) to see if this allowed. Obtaining Forms And Information Chase Online s Customer Center gives you access to the forms and information you need to manage your SDA. These include a Mutual Fund Systematic Request and a Cost Basis Input sheet, to name a few. You may also call the SDA Service Center for assistance. We hope that this User s Guide has given you the information you need to get the most from your new SDA. Please call if you have questions. We are always ready to help you. Added Benefits For Current Chase Customers If you already have accounts with Chase, you can view the accounts to which you are entitled on the aggregated accounts page. This may include checking, savings and other investment accounts; credit cards; mortgages and other loan products. You may also choose to receive an integrated statement that reflects your SDA along with other Chase accounts. SDA balances also count toward minimum balance requirements in a Chase checking account.

8 Disclosures 1 Please be aware that certain NTF funds may be subject to separate and additional redemption fees imposed by the particular fund. Refer to that fund s current prospectus for details. 2 Any fixed-income security sold prior to maturity may be subject to a substantial gain or loss. Treasury securities are backed by the full faith and credit of the U.S. government for the prompt payment of interest and principal at maturity. 3 Option trading entails greater risk and is not suitable for all investors. Check your Self-directed Brokerage Account Plan Profile to see if option trading is permitted in your SDA. All options applications are subject to review and approval by JPMS. The Characteristics and Risks of Standardized Options document may be obtained in the Forms Gallery at or by calling the SDA Service Center. 4 Please refer to your Self-directed Brokerage Account Plan Profile on your retirement plan s website for your plan s specific provisions. Some funds in your retirement account may impose a short-term trading fee that you may incur as a result of transferring money between your retirement plan and self-directed account. Please see your plan documents and fund prospectus for additional details. 5 An investment in a Money Market Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund. 6 Money transferred after 4:00 p.m. Eastern Time will be invested the next business day into the retirement plan based on your existing elections. 7 Except during site maintenance. 8 System availability and response times may vary due to market volatility, system performance or other factors. 9 Real-time quotes are available when the markets are open. Trades placed when the markets are closed will be submitted during the next trading session when the markets are open. Research and other investment tools are available from Dow Jones, Lipper and other third party sources, which are unaffiliated with JPMorgan Chase & Co. and its affiliates. SDAs are subject to the review and approval of J.P. Morgan Securities, LLC. Please note that fees and other information are subject to change without notice. DC-RBS J.P. Morgan Retirement Plan Services LLC. All rights reserved.