EFTA01378945.pdf

Understanding Your Brokerage and Investment Advisory Relationships with Deutsche Bank Securities Inc. Deutsche Bank Securities Inc. ("DBSI") is registered with the Securities and Exchange Commission as both a broker-dealer and an investment adviser, and provides both brokerage and investment advisory services to clients. There are certain important differences between the brokerage services DBSI provides to clients and the investment advisory services DBSI provides to clients. Brokerage services primarily involve assisting clients with the purchase and sale of securities, whereas investment advisory services primarily involve offering clients advice with respect to what they may buy and sell, or assisting clients to retain a third party adviser to provide this service. The provision of investment advisory services by DBSI will only take place pursuant to a specific written agreement between DBSI and the client that describes the investment advisory services DBSI will provide to the client and DBSI's obligations to the client. In addition, advisory clients will receive a disclosure document (called a Form ADV Part 2A) that describes, among other things, DBSI's advisory services. There are differences in terms of how clients are charged for brokerage services and investment advisory services provided by DBSI. In general, DBSI brokerage clients pay DBSI a commission, mark-up or mark-down for each transaction, whereas ()BSI investment advisory clients pay DBSI a fee, typically payable quarterly, that is based on the value of the assets in the client's advisory account and covers both the investment advisory and transaction execution services provided to the client. When providing investment advisory services, DBSI has a fiduciary duty to the client and thereby is required to put the client's interest ahead of DBSI's own interest, to treat all of its advisory clients fairly and equitably and to disclose all material conflicts between DBSI's interests and the interests of its advisory clients. Brokerage activities are regulated under different laws and rules than advisory activities and generally do not give rise to the fiduciary duties that an investment adviser has to its advisory clients. When acting as a broker- dealer, DBSI has obligations to clients to make "suitable" recommendations (based on each client's specific investment objectives, risk tolerances and other financial information that the client has disclosed), to "know our customer" and to seek the best execution of customer orders in light of prevailing market conditions, as well as obligations under rules imposed by self-regulatory organizations that are generally related to DBSI's conduct and sales practices. DBSI also has a duty to deal fairly with brokerage clients, meaning that DBSI will not unfairly advantage one client to the disadvantage of another. However, DBSI's interests may not always be the same as those of brokerage clients, as DBSI may be paid both by clients and by other parties who compensate DBSI based upon the securities that are purchased by the brokerage client, and DBSI generally is not obligated to disclose such a conflict to its brokerage clients. DBSI may provide both investment advisory services as well as broker-dealer services to the same client. The fact that DBSI may do so, however, does not mean that DBSI's brokerage arrangement with a client is subject to the same obligations that apply to DBSI's investment advisory arrangement with the same client. Any client who is unsure of the capacity in which DBSI or its brokerage or investment advisory representative is acting with respect to a particular recommendation or transaction is urged to request clarification from the representative or his or her DBSI supervisor. There may be certain securities or other financial instruments that are eligible to be purchased and held by DBSI brokerage accounts but not by DBSI investment advisory accounts, or vice versa. WM189'778 015684.080218 Page 2 of 16 CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0076226 CONFIDENTIAL SDNY_GM_00222410 EFTA01378945