Disclosures & Privacy


Product Specific Disclosures

Corporate Bonds

Corporate bonds are debt obligations issued by corporations to raise capital. The corporation promises to repay the loan at a specified future date and makes scheduled interest payments to the investor at a specified rate. Because bonds are senior to stock, interest and principal are paid to bondholders before dividends are paid to stockholders.  

Active secondary markets exist for most, but not all, bonds.  Many factors may affect performance and liquidity of bonds, and you may receive more or less than your original investment if you decide to sell.  Of course, if you hold your corporate bond until maturity, the issuer promises to pay back the full face value.

Virtually all investments have some degree of risk. The return on most investments is linked to the risk of that investment.  Investments with more risk generally offer the potential for higher returns. Conversely, relatively safe instruments such as insured CDs and U.S. Treasuries offer relatively lower returns.

Some risks common to most all bonds include:  

Credit Risk – financial risk that the issuer will not be able to repay the principal upon maturity as promised.  Call Risk – longer-term bonds are usually callable.  The bonds may be called before the maturity date if interest rates decrease, and an investor may not be able to reinvest the funds for an equal or greater return.  

Market Risk – if the bond must be sold before the maturity date, the bond may be worth more or less than the face value.  

Inflation Risk – recognizes the value of assets or of income will be eroded as inflation shrinks the value of a country’s currency. 

Liquidity Risk – some securities may be difficult to sell in the absence of an active secondary market. 

Interest Rate Risk – as interest rates rise, generally bond prices will fall. 

The information provided herein is obtained from sources deemed reliable; however, we cannot guarantee its accuracy, completeness or suitability for any purpose and make no warranties with regard to the results to be obtained from its use.  Under no circumstances should the information provided herein be construed as an offer to sell or a solicitation of an offer to buy a particular security.  Prices, yields and availability are subject to change.  Many factors exist which could impact yield.  Please call for more information.


Municipal Bonds

Municipal bonds are debt obligations issued by states, cities, counties and other governmental entities to raise money to build schools, highways, hospitals and sewer systems, as well as many other projects for the public good.  When you purchase a municipal bond, you are lending money to an issuer who promises to pay you a specified amount of interest (usually paid semiannually) and return the principal to you on a specific maturity date.  *Under present federal income tax law, the interest income you receive from investing in municipal bonds is free from federal income taxes.  In most states, interest income received from securities issued by governmental units within the state is also exempt from state and local taxes.  In addition, interest income from securities issued by U.S. territories and possessions is exempt from federal, state and local income taxes in all 50 states.  If you are subject to the alternative minimum tax (AMT), you must include interest income from certain municipal securities in calculating the tax.  

When you invest in any bond, your primary concern should be the issuer’s ability to meet its financial obligations.  Bond ratings are important benchmarks because they reflect a professional assessment of the issuer’s ability to repay the bond’s face value at maturity.  Generally, bonds rated BBB or Baa, or better, by Standard & Poor’s and Fitch, or Moody’s, respectively, are considered “Investment Grade,” suitable for preservation of investment capital.  In general, as with any fixed-income investment, the higher the yield, the higher the risk.  If you sell your municipal bonds prior to maturity, you will receive the current market price, which may be more or less than their original price.  Many bond issues allow the issuer to call- or retire- all or a portion of the bonds at a premium, or at par, before maturity.  Special rules apply to a tax-exempt bond purchased at a premium or a discount and called or sold before maturity. (Since tax laws frequently change, consult with your tax lawyer or accountant for up-to-date advice).  

More information about municipal offerings is available in the issuer’s official statement and should be read carefully before investing.  Contact your investment specialist at the telephone number to receive an official statement.

Reverse Convertible Securities

A Reverse Convertible Note is a short-term coupon-bearing note providing enhanced yield relative to the common stock, while participating in certain equity-like risks.

In addition to offering current income, Reverse Convertible Notes offer limited downside protection. This feature allows for the underlying stock price to decrease by up to a predetermined percentage while still providing a return of principal at maturity.

In effect, the investor in the reverse convertible is selling the issuer a put option on the reference asset in exchange for an above-market coupon during the life of the note. Generally speaking, the higher the coupon rate, the higher the expected volatility of the reference asset, which in turn means greater likelihood that the knock-in price will be breached and the investor will receive less than a full return of principal at maturity.

Reverse convertibles can have complex pay-out structures involving multiple variables that can make it difficult for registered representatives and their customers to accurately assess their risks, costs and potential benefits.

Upside Auto Callable Single Observation Reverse Exchangeable Notes

Annual Percentage Yield (APY): Interest is quoted at an annualized rate, you may receive less than the stated annual rate depending on the amount of time until maturity. At maturity, holders receive either 100% of the original investment or a predetermined number of shares of the underlying stock.  If you receive shares, their value will be substantially less than the amount originally invested. Earning potential is limited to rate of interest.  Interest is guaranteed by the A+ rated issuer, principal is not.  These notes carry the risk of the underlying stock.  Either the performance of the underlying equity or the creditworthiness of the issuer may affect the value of the investment. May not be suitable for all investors.  This is not an offer to buy or sell securities. Is not listed on any securities exchange.  The price of the reference stock is subject to market volatility. and your protection may terminate on observation date. Please request and read a prospectus prior to investing.  Consult your financial representative and tax consultant for tax considerations.

Downside protection is the percentage amount that leads to the price below which the stock is not allowed to drop. If the stock price is above the single observed price on the single observation date, your principal is returned on maturity. If the underlying stock price is below the stated downside protection on single observation date, you receive shares of the underlying stock in lieu of principle, with a value less than your original investment. This instrument is designed to pay you interest each month until the note is called or comes due on the stated date.

Certificates of Deposit (CDs)

Certificates of Deposit (“CDs”) issued by banks, savings associations and other depository institutions whose deposits are insured by the Federal Deposit Insurance Corporation (“FDIC”).Brokered CDs are obligations of the bank, not the broker.  Brokered CDs generally have the features of CDs available directly from banks and are eligible for the same deposit insurance as CDs purchased directly from banks.  Unlike banks, securities brokers are required to provide you with an estimated market value of your CD on your periodic account statement.  This is an estimate of the amount you might receive if you were able to sell your CD prior to its maturity.  You may not be able to sell your CD for the amount listed on the statement.  Also, the amount on the statement does not affect your deposit insurance, which is based on the outstanding principal amount of your CD, not the estimated market value.  Though not obligated to do so, some securities brokers may be willing to purchase, or arrange for the purchase of, your CD prior to maturity.  The broker may refer to this activity as a secondary market.  This is not early withdrawal.  The price you receive for your CD will reflect a number of factors, including then-prevailing interest rates, the time remaining until the CD matures, the features of the CD and compensation to the broker for arranging the sale of the CD.  Depending on market conditions, you may receive more or less than you paid for your CD.  The broker is free to discontinue offering you this service at any time.  Banks generally permit early withdrawal of brokered CDs without penalty upon the death or adjudication of incompetence of the depositor.  Some CDs allow the bank to redeem or “call” the CD at its sole discretion.  These CDs are termed “callable CDs.”  On predetermined dates, the bank can choose to give you your money back, (including accrued interest) and cancel the CD.  A call provision does not give you the right to redeem the CD.  Call features are typically incorporated in CDs with longer terms and the call feature may be combined with other features, such as a step rate.  Interest rate is quoted on an annualized rate.

Mutual Funds (Managed Investment Companies)

Mutual Funds offer a wide array of valuable investment opportunities.  When considering investing in mutual funds, it is important to carefully consider the investment objectives, risks, and expenses of any fund before investing.  The prospectus contains this and other important information and should be read fully before investing.  You may obtain a prospectus directly from the fund, or by contacting us at 800-872-0444. 

Among other considerations, understanding sales charges and breakpoint discounts will assist you in identifying the best investment for your particular needs and may help you reduce the costs of your investment. 

Sales Charges: When you purchase mutual funds, you must make choices, including which funds to purchase and which class share is most advantageous. Each mutual fund has a specified investment strategy. You need to evaluate whether a fund’s investment strategy is compatible with your investment objectives. Also, most mutual funds offer different share classes. Each share class represents a similar interest in the mutual fund’s portfolio, but the mutual fund will charge you different fees and expenses depending on your choice of share class. Generally, Class A shares carry a “front-end” sales charge or “load” that is deducted from your investment at the time you buy. This sales charge is a percentage of your total purchase. Many mutual funds offer volume discounts to the front-end sales charge assessed on Class A shares at predetermined levels of investment, called “breakpoint discounts.” In contrast, Class B and C shares usually do not carry any front-end sales charges, but investors who purchase Class B or C shares pay asset-based sales charges, which may be higher than the charges associated with Class A shares. Investors who purchase Class B and C shares may also be required to pay a sales charge known as a “contingent deferred sales charge” when they sell their shares, depending upon the rules of the particular mutual fund. 

Breakpoint Discounts: Most mutual funds offer investors a variety of ways to qualify for breakpoint discounts on the sales charge associated with the purchase of Class A shares, commonly to investors who make large purchases at one time. The extent of the discount depends upon the size of the purchase. Generally, as the amount of the purchase increases, the percentage used to determine the sales load decreases. The entire sales charge may be waived for investors making very large purchases of Class A shares. Mutual fund prospectuses contain tables that illustrate the available breakpoint discounts and the investment levels at which breakpoint discounts apply. Also, most mutual funds allow investors to qualify for breakpoint discounts based upon current holdings from prior purchases through “Rights of Accumulation,” and future purchases, based upon “Letters of Intent.” Mutual funds each have different rules regarding the availability of Rights of Accumulation and Letters of Intent. Talk with us and review the mutual fund prospectus to determine the specific terms on which a mutual fund offers Rights of Accumulation or Letters of Intent

1. Rights of Accumulation– Many mutual funds allow you to count the value of previous purchases of the same fund, or another fund within the same fund family, along with the value of your current purchase, to qualify for breakpoint discounts. Mutual funds allow you to count existing holdings in multiple accounts, such as IRAs or accounts at other broker-dealers, to qualify for breakpoint discounts. If you have accounts at other broker-dealers and wish to take advantage of the balances in these accounts to qualify for a breakpoint discount, you must advise your Siebert representative about those positions. You may need to provide documentation establishing the holdings in those other accounts if you wish to rely upon balances in accounts at another firm. Further, many mutual funds allow you to count the value of holdings in accounts of certain related parties, such as your spouse or children, to qualify for breakpoint discounts. Each mutual fund has different rules that govern which relationships allow you to qualify for breakpoint discounts. You’ll wish to discuss this with your Siebert representative or review the mutual fund’s prospectus and statement of additional information to determine what these rules are for the fund family in which you are investing. If you wish to rely upon the holdings of related parties to qualify for a breakpoint discount, be sure to tell your representative about these accounts. Mutual funds also follow different rules to determine the value of existing holdings.  Most funds use the current net asset value (NAV) of existing investments in determining whether you qualify for a breakpoint discount. A small number of funds use the historical cost, which is the cost of the initial purchase, to determine eligibility for breakpoint discounts. If the mutual fund uses historical costs, you may need to provide account records, such as confirmations or statements, to qualify for a breakpoint discount based upon previous purchases. Talk with your representative and review the fund’s prospectus to determine whether the mutual fund uses NAV or historical costs to determine breakpoint eligibility. 

2. Letters of Intent – Most mutual funds allow you to qualify for breakpoint discounts by signing a Letter of Intent, which commits you to purchasing a specified amount of Class A shares within a defined period of time, usually 13 months. For example, when you plan to purchase a total of $50,000 worth of Class A shares over a period of 13 months, but each individual purchase would not qualify for a breakpoint discount, you could sign an LOI at the time of the first purchase and receive the breakpoint discount associated with $50,000 investments on your first and all subsequent purchases. Some funds offer retroactive Letters of Intent that allow you to rely upon purchases in the recent past to qualify for a breakpoint discount. If an investor fails to invest the amount required by the Letter of Intent, the fund is entitled to retroactively deduct the correct sales charges based upon the amount that the investor actually invested. If you intend to make several purchases within a 13 month period, you should consult your StockCross representative and the mutual fund prospectus to determine if it would be beneficial for you to sign a Letter of Intent. 

As you can see, understanding the availability of breakpoint discounts is important because it may allow you to purchase Class A shares at a lower cost. The availability of breakpoint discounts may save you money and may also affect your decision regarding the appropriate share class in which to invest. Discuss the availability of breakpoint discounts with your Siebert representative, along with your other considerations in selecting a fund. 

To learn more about mutual fund share classes or mutual fund breakpoints, you may wish to review the investor alerts available on the FINRA Web site. See Understanding Mutual Fund Classes here and Mutual Fund Breakpoints: A Break Worth Taking here. Visit the many mutual fund Web sites available to the public.

  • 50
    Years delivering excellent customer service.
  • 1 on 1
    Work one-on-one with our Investment Advisors.
  • 11
    Siebert branch offices nationwide.
  • $11 Billion
    Worth of assets firm-wide  

Siebert 800-872-0444      

Electronic trading poses risk to investors due to system response, trade executions and account access availability that may vary due to a variety of factors, including trading volumes, market conditions, system performance, market data delays and other factors. All investments involve risk, and the past performance of a security, industry, sector, market, or financial product does not guarantee future results or returns. Rates, commissions and fees listed here are subject to change at any time. Testimonials may not be representative of the experience of other clients and are no
guarantee of future performance or success. 

Muriel Siebert & Co., Inc.

Member NYSE, FINRA and SIPC. Est. 1967. Nasdaq symbol SIEB.
Check the background of this firm on FINRA's BrokerCheck

Market Data powered by QuoteMedia. Terms of Use.
QuoteMedia logo

Copyright 2019 Siebert All rights reserved.