Good Faith Violation ("GFV")

Investrade Discount Securities through its clearing agent FirstSouthwest Company is required to implement policies concerning trading with unsettled funds. Your account can be charged with a Good Faith Violation (GFV) if you sell a security that was purchased with unsettled funds and then sold prior to the settlement of the first sell (see example below). Four (4) GFV's in any twelve (12) month rolling period will result in your account being restricted to “Funds in Advance” of trading for a period of 90 days. If an account trades through a 90-day restriction, any resulting loss in the account will be the responsibility of the client and your account may be coded for "no more business." Five (5) GFV’s in any twelve (12) month rolling period will result in your account being restricted to liquidating only for 90 days.

Example:

• On Monday customer sells “A” for $5,000, of a long, settled and fully paid for position.
• On Monday customer buys “B” for $5,000.
• On Monday, Tuesday or Wednesday customer sells “B”, the sale would result in a good faith violation.

For questions contact Investrade at 1-800-498-7120.

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