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Safety of Funds

The safety of your funds is very important to us. You can be assured that TradeStation does not engage in any proprietary trading. TradeStation Securities operates as a subsidiary of our parent company, TradeStation Group, Inc., which in turn is owned by Monex Group, Inc. Monex Group is among Japan's leading financial services companies. Both Monex Group and Monex Securities, its main subsidiary, are subject to stringent oversight by Japanese regulatory authorities. TradeStation is subject to stringent U.S. industry regulations and account-protection requirements and has continuous reporting requirements that are subject to regulatory review and regular audits. These regulatory requirements include reserve and segregation requirements for your equities and futures accounts.

Following are our ways of protecting your funds within the TradeStation family of companies:


TradeStation Equity accounts - Held at TradeStation Securities, Inc.
Brokerage firms are required to follow certain rules that are designed to minimize the chances of financial failure and, more important, to protect customer assets if they do fail. For example, the SEC's Rule 15c3-1 — the "Net Capital Rule" — requires brokerage firms to maintain certain levels of their own liquid assets. The minimum net capital a firm must have on hand depends on its size and business. As of September 30, 2016, TradeStation Securities, Inc. had net capital of approximately $73.4 million, which was approximately $70.5 million in excess of its required net capital of approximately $2.9 million.

In addition, the SEC's Rule 15c3-3 — the "Customer Protection Rule" — requires brokerage firms that have custody of customer assets to keep those assets separate from their own accounts. In other words, customers' cash must be placed in a special, separate "reserve" account, and fully paid customer securities must be kept separate from firm and customer margin securities. As of September 30, 2016, TradeStation Securities, Inc. had approximately $1.28 billion of customer funds reserved and segregated in bank accounts clearly identified as customer funds in accordance with Rule 15c3-3. The amount required to be segregated is computed every week and any shortage needs to be deposited before 10:00 a.m. of the following business day. As an additional safety precaution, TradeStation maintains funds in excess of the required amount to be segregated from its own proprietary funds.

Your TradeStation equities accounts are further protected with SIPC insurance. SIPC insures your equities accounts up to $500,000, including $250,000 for cash. Beyond this, TradeStation has arranged for additional protection through Lloyd's of London, insuring each account up to $24.5 million, subject to a $900,000 per account maximum for cash, with an aggregate firm limit of $300 million. For more information on SIPC coverage, we encourage you to visit the SIPC website.


 

Very truly yours,



John Bartleman 
President
TradeStation Securities, Inc.