SECURITY AND CUSTODY

Schwab

Every aspect of Reshape was built around safety and security. We partnered with TD Ameritrade, one of the largest custodians in the world, to provide leading security, protection, and asset insurance. TD Ameritrade’s next-generation open architecture technology manages the custody of our client portfolios, including the execution, clearance and settlement of securities transactions, as well as the custody of funds and securities, preparing and sending monthly statements and transaction confirmations. The platform utilizes advanced firewalls, 128-bit encryption and anomaly detection and intrusion detection technology to identify any unusual account behavior. Reshape clients also benefit from the TD Ameritrade Asset Protection Guarantee that reimburse losses of cash or securities from an account due to any unauthorized activity.

How are my securities at Schwab protected?

The first thing to remember is your securities—like stocks, bonds, mutual funds, exchange traded funds, or money market funds—held at Schwab are yours. The SEC’s Customer Protection Rule safeguards customer assets at brokerage firms by preventing firms from using customer assets to finance their own proprietary businesses.

At Schwab, clients’ fully paid securities are segregated from other firm assets and held at third party depository institutions and custodians such as the Depository Trust Company and Bank of New York. There are reporting and auditing requirements in place by government regulators to help ensure all broker-dealers comply with this rule. In the very unlikely event that Schwab should become insolvent, these segregated securities are not available to general creditors and are protected against creditors’ claims.

If you have a margin account with a current loan balance, Schwab may borrow a portion of the securities pursuant to the loan consent provision of your account agreement. If there is not a current margin loan balance, or it is not a margin account, securities will not be borrowed out of your account. Per regulation, any securities that are borrowed are fully collateralized with cash that is held in reserve for clients.

What part of my assets are protected by FDIC?

The Federal Deposit Insurance Corporation (FDIC) is an independent agency that maintains the Deposit Insurance Fund which is backed by the full faith and credit of the United States government. Its purpose is to protect depositors’ funds placed in banks and savings associations.

The FDIC insures accounts held at member banks up to $250,000 per depositor, per insured bank, based on ownership category. However, all deposits held at the same FDIC-insured bank in the same ownership capacity are added together to determine your total amount of FDIC insurance coverage at that bank. This rule applies whether you open an account directly at the bank (such as a Schwab Bank Investor Checking™ or Schwab Bank Investor Savings account™), or whether Schwab brokerage holds the accounts on your behalf (such as through Schwab’s Bank Sweep feature). Bank Sweep deposits may be swept into more than one Program Bank to extend the total FDIC coverage available to you.

You can find more detailed information on the amount you have in each bank by account on the Balances page or by going to schwab.com/login > Accounts > Balances.

It is also available on your statement. CDs in Schwab’s CD marketplace, Schwab CD OneSource ® , are also protected by the FDIC. CDs you purchase through Schwab are aggregated with other deposits you hold at each issuing institution and are FDIC-insured up to $250,000 per bank.

To learn more, visit our FDIC insurance page.

Charles Schwab & Co., Inc. is not an FDIC-insured bank and deposit insurance covers the failure of an insured bank. Charles Schwab & Co., Inc. is a brokerage firm and a member of SIPC, which provides protection for brokerage account assets. Certain conditions must be satisfied for FDIC insurance coverage to apply. Bank Sweep deposits are held at one or more FDIC-insurance Program Banks. Please review the Cash Features Program Disclosure Statement for a list of the Program Banks. For CDs, please visit the Schwab CD OneSource ®  page for a list of insured institutions that offer CDs through Schwab. Non-deposit products are not insured by the FDIC; are not deposits,; and may lose value.

What is SIPC coverage and when does it become activated?

Schwab is a member of Securities Investor Protection Corporation (SIPC), which provides protection for securities and cash in client brokerage accounts, including those held by clients of investment advisors with Schwab Advisor Services. SIPC protections are activated in the rare event that the broker-dealer fails (bankruptcy) and client assets are missing due to fraud or other causes.

According to SIPC, most broker-dealer failures happen with no securities missing. Since their inception over 50 years ago, 99% of eligible investors got their investments back in the failed brokerage firms cases that it has handled. The SIPC liquidation process generally assures that customers of a failed broker-dealer receive their securities and cash with reasonable promptness after filing a claim.