This document provides an overview of wealth structuring solutions for entrepreneurs, including grantor retained annuity trusts (GRATs) and other estate planning strategies. GRATs allow individuals to transfer appreciating assets to beneficiaries with little or no gift tax by retaining an annuity for a term of years. They are a viable estate tax strategy to transfer assets that are expected to significantly appreciate. The document also discusses other options like lifetime gifts and charitable transfers that can help reduce estate and gift taxes.
Swan(sea) Song – personal research during my six years at Swansea ... and bey...
Wealth Structuring Solutions for Entrepreneurs
1. Wealth S tructuring for E ntrepreneurs
E O 2012 NE RVE C onference
A tlanta, GA
Chr opherJ
ist ohnson
Direct , W lh A isor
or eat dv y
W lh a Inv mentM na
eat nd est a gement
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2. Barclays : A Leading Global Financ ial S ervices Organization*
The G ateway to B arclays for Private C lients : Wealth and Inves tment
W l a InvestmentM na
eath nd a gement
Management
Sel gr ofexper
ect oup ienced inv mentr esent t es
est epr aiv Dedicaed t supporingpr ae inv or needs:
t o t iv t est s’
M r ta $ 5
o e hn 2 0 E ch inv mentr esent t e del er ourca bil ies in a
a est epr aiv iv s pa it
b l nin
il io Inv mentma gement
est na Banking
cust
omized w yt ea cl
a o ch ient
c ie t s e s
l n a st1 Tustser ices
Br a
oker ge r v
Op r t n inm r
e a io s oe Cr &L
edit ending
ta
hn
2 c u t ie
0 o nr s
Bacl ys l cyoftust st bil ya effect e r ma gement
r a ega r , a it nd iv isk na Gobal r
l ly ecognized Cor ae a Inv mentBa
por t nd est nking
• 3 - rol UKba
20yea d nk T r nked equitya fixed income inst ut lr r 3
op a nd it iona eseach
• A l der in IPOs, debtunder r ing, M , der aiv a
mong ea s wit &A iv t es nd
• A / a cr r t 2
+ A3 edit aing 5
t a a oss a cl sses
r ding cr sset a
• E r ed w h $2.4tr l in cl a s4
nt ust it ilion ient sset
• Did notneed governmentba -
ilout
Ref ences t “Bacla r t Bacla PL a it subsidiaies.
er o r ys” efer o r ys C nd s r
1. A s a of12/ 1/ 11. USD figur der ed using excha r t on 12/ 1/ 11 of£1 G = $1.54 0 . 2. Sour Bl
sset s 3 20 es iv nge ae 3 20 BP 48 ce: oomber S&P/ oody's r t a of0 1012. Raings ae ofBacl ys Ba PL beca it t l lent yfr w debtis issued. Bacl ys Pl is t paent
g. M aing s 2/ / t r r a nk C use ’s he ega it om hich r a c he r
compa fr w debtis notcur ent issued. 3 Ba on Institutional Inve stor’s 20 “AlA icaReseach T m” (E y)a “AlA icaF
ny om hich r ly . sed 11 l- mer r ea quit nd l- mer ixed-Income Reseach T m” sur eys, w pol indust yr esent t es (See sl on Impora Discl es: A ads a
r ea v hich l r epr aiv ide t nt osur w r nd
Ra nkings formor det il A ads a r nkings r enced do notr t t inv menta isor pr s orser ices of ed byW lh a Inv mentM na
e a s.) w r nd a efer elae o est dv y oduct v fer eat nd est a gement 4 Bacl ys Pl a s a of12/ 1/ 11. USD f es der ed a in f not 1 a e . 5. Pl se see t A
. . r a c sset s 3 20 igur iv s oot e bov ea he ppendix for
specif Ra
ic nkings. * Ba on Bacla PL r t t a a s of$2.4t ill in a of12/ 1/ 11. See A
sed r ys C epored ot l sset r ion s 3 20 ppendix fordet il
a s.
S ee important dis clos ures pag e at the back of this pres entation.
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3. Wealth A dvis ory Offers Tailored A dvice
Ta ct Pl nning: Pr IPOorPr Sae ofaBusiness
r nsa ion a e- e- l
E iv Opt a Compensaion Staegies
xecut e ion nd t rt
Business Succession Pl nning
a
W lh Ta (E ae a G Pl nning)
eat r nsfer st t nd ift a
Phil nt opya Phil nt opy-el t T x Issues
a hr nd a hr r aed a
Insur nce
a
T Per lSide ofW lh
he sona eat
Neit Bacl ys norit empl
her r a s oyees r s t x orl la ice. Pl se consultw h youra
ender a ega dv ea it ccount nt t x a isor a orat neyf a concer yourpat a cir a T documentis forinf maion pur onl a it
a , a dv , nd/ tor or dvice ning ricul r cumst nces. his or t poses y nd
shoul notbe r r a a offert sellora asolicit t ofa offert buyinsur nce ort secur ies orot inst ument ment in it Neit Bacl ys norit a il t compa sel orsol insur nce. Y shoul consul w h
d egaded s n o s aion n o a he it her r s ioned . her r a s ff iaed nies l icit a ou d t it
yourlicensed insur nce a forfurherinfor t on insur nce pr s orser ices.
a gent t maion a oduct v
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4. Why Wealth S tructuring S olutions A re Relevant Now
Onl 3 ofbusiness ow s ha asuccession pl n in pl ce a a
y% ner d a a s Business succession pl nning is afunda a r son t
a ment l ea o
patoft br derest t pl n
r heir oa ae a ** considertuststuct ing
r r ur
G en t curentl aion in pl ce, neal ¼ofindiv l
iv he r egisl t a ry iduas T shoul ha e adiscussion w h aTustSpeciaist
hey d v it r l
ha incr sed gift pr ct t kids
d ea ing a ices o ** r r funding atustw h t exempt a
egading r it he ion mount
50 did notha e a irev bl tustin pl ce (70 wouta
% v ny r oca e r a % / n Insur nce tust &chait bl tust ae effect e stuct es t
a r s ra e r s r iv r ur o
insur nce tust 90 woutachait bl tust**
a r , % / ra e r ) minimize t impa oft x w e a
he ct a hil ccompl ishing goas
l
A a “l t discussion shoul compl
n sset ocaion” d ementan
27% ofindiv l ha nev discussed int gener t l
iduas d er er aiona inv mental t discussion
est locaion
w lh ta w h t inv mentr esent t e**
eat r nsfer it heir est epr aiv
*
Da at k nf o L d u y e e r hs u y o B r l y ( e l hIs h sB o h r V l m 1 )– Da aa o F b u r 2 1 b s du o a
t a e r m e b r R s a c t d f r a c a s W a t n ig t r c u e o u e 4 t s f er ay 0 1 ae p n
s r e o h n r d o U . HNW in iv u l w h$ .5 m inin e t b ea s t .
u v y f u d e s f .S d id a s it 1 m + v sa l s es
**
Da at k nf o aP o n M r e in It r a io a s u y o U T u t Da aa o F b u r 2 1 b s du o as r e o 4 0U . HNW
t a e r m h e ix a k t g n e n t n l t d f r S r s – t s f e r a y 0 1 a e p n u v y f 5 .S
in iv u l w h$ m + inin e t l a s t . S r e r s o d n sw r 5 % r t o m n: w m n a e a ea eo 6 , 8 % m r ie , 8 % w h
d id a s it 3 m v s ib e s e s u v y e p n e t e e 0 a io f e o e , vr g g f 1 6 ar d 1 it
c il r n
h de.
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5. Planning B efore the S ale or IPO of Your B us ines s
Ta ct ca mov quickl so setl t ba a d oft
r nsa ions n e y te he sics hea ime
Seize discount now
s
E ae pl nning = T x minimizaion
st t a a t
Cr t a Inv menta T x Pl n, incl postl up seling staegies a l
eae n est nd a a uding ock- l r t nd iquidit pl ns
y a
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6. Gift A s s ets at Today’s Lower Value (“ Life Planning” )
Non-taxable Trans fers
How It Works
Any transfe r of asse ts is taxab l unl ss it
e e Marital Deduc tion
fals within one of the se e xcl
l usions Unl ed t x-fr t a s to U.S. cit spouse
imit a ee r nsfer izen
C haritable Deduc tion
Unl
imited t x- ee t a s to quaified chait
a fr r nsfer l r ies;
income t x deduct ma be l ed in cera situaions
a ions y imit t in t
YOUR Direct Payments for E duc ation / Healthc are
A S S E TS Payments ma dir l to the pr iderforschool
de ecty ov
t ion orheat cae expenses ae notconsider ta bl gifts
uit lh r r ed xa e
A nnual E xclus ion for G ifts
$13 0 perr
,0 0 ecipientperyea ($26,0 0w h spouse)
r 0 it
E s tate and G ift Tax E xc lus ions
Per t a s dur l of$5 mill giftt x- ee a a deah of$5milion, r
mits r nsfer ing ife ion a fr nd t t l educed byl
ifetime gifts, est te ta fr
a x- ee
A ll Other Trans fers
S ub j ct to fe d e ral transfe r tax (and
e
G eneration-S kipping Tax E xc lus ion
whe re ap p l icab l , fe d e ral G S T tax.
e
C e rtain state s al asse ss a transfe r
so Ta s t gr ndchil en a beyond ae subj t asecond, sepaa l eloft a t x. T e is a
r nsfer o a dr nd r ect o r te ev r nsfer a her
$5 milion excl fr this t x, at
l usion om a lhough t gift he
tax) oresta t x w lcontinue t a
te a il o pply
Neit Bacla int U.S. norit W lt a Inv mentM na
her r ys he s ea h nd est a gementemployees in t U.S. r
he endert x orlega a ice. Plea consultw h youra
a l dv se it ccount nt t x a isor a orator fora ice
a , a dv , nd/ t ney dv
concer yourpat rcir a
ning ricula cumst nces.
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7. What You C an Do: Grantor Retained A nnuity Trus ts
(G RA Ts )
V bl ta t x staegyfora a expect t significa l a
ia e r nsfer a r t n sset ed o nty ppreciae
t
Litl orno giftt x w lbe due upon creaion ofG A
te a il t RT
- Betert per ma greaert v l t a red, forl te orno giftt x
t he for nce, t he aue r nsfer itl a
- Ifa fa s t a
sset il o ppreciae, a giftt x pa w lbe w st
t ny a id il a ed
A ypa t gr nt “in kind” bya distibut from G A w h no income t x
nnuit id o a or sset r ion R T it a
T lyfunded w h asingl st posit oraporfol ofsecur ies
ypical it e ock ion t io it
Usual stuct forat m of2 t 5 yeas
ly r ured er o r
S tep 1: C ontribute asse ts t are
hat
e xpe ct d t app re ciat
e o e
Ga or
r nt Beneficiaies
r
GA
RT
S tep 2: G R AT p ays an annuit b ack to
y
S tep 3: At t rm inat of G R AT, re m aind e r of asse ts pass t
e ion o
grant for t rm of trust
or e
be ne ficiarie s wit no ad d itional gift or e stat tax
h e
Neit Bacla int U.S. norit W lt a Inv mentM na
her r ys he s ea h nd est a gementemployees in t U.S. r
he endert x orlega a ice. Plea consultw h youra
a l dv se it ccount nt t x a isor a orator fora ice
a , a dv , nd/ t ney dv
concer yourpat rcir a
ning ricula cumst nces.
8. How a G RA T C an Prove B eneficial - S ample
2- ea or5- ea GR T funded w h 1,0 0,0 0sha a $10persha ($10,0 0,0 0
Y r Y r A, it 0 0 res t re 0 0)
IR r t ofret n (7520r t of1.4 (forGR T cur l est bl
S ae ur ae) % As renty a ished)
M xima possibl a ypa outt gr nt (“zeroing out
a l e nnuit id o a or ”)
Pa s t t gr nt inv ed in porfol w h sa r t ofret n a G A a s
yment o he a or est t io it me ae ur s R T sset
5-Year GRA T 2-Year GRA T
S cenario 1 S cenario 2 S cenario 3 S cenario 4
Grantor: 10% Growth 12% Growth 10% Growth 12% Growth
NumberofShaes R ur
r et ned 790,291 751,512 8 6,0
8 21 862,799
Scenaio Dola V l Y r2
r l r aue ea $10 ,8 9
,720 4 $10 22,953
,8
Scenaio Dola V l Y r5
r l r aue ea $12,727,709 $13 4 4
,24 ,20
B eneficiaries :
NumberofShaes R ed
r eceiv 20 9
9,70 24 ,4 8
88 113,979 13 1
7,20
Scenaio Dola V l Y r2
r l r aue ea $1,379,151 $1,721,047
Scenaio Dola V l Y r5
r l r aue ea $3,377,391 $4,379,213
N ote : P aym e nts to the grantor are inve ste d in a portfol that has the sam e rate of re turn as asse ts in the G R AT.
io
Scenaios ae forill r t e pur onl a do notr a ua per ma
r r ust aiv poses y nd eflect ct l for nce.
9. Trus ts C an Help to Pres erve Wealth for Generations
Asepaae l lent y, cr t byawiten a eementin w ow ship ofpr t is ta r fr one per (t gr nt )t
r t ega it eaed r t gr hich ner opery r nsfered om son he a or o
a her(t tust t hol on behafofat d per (t beneficiay)
not he r ee) o d l hir son he r
Ga ordefines tustgoas, a s tust funds t tust a pa a giftt x
r nt r l ppoint r ee, he r , nd ys ny a
Atust in a da w h t t ms oft tusta eement contol t inv menta distibut ofa s
r ee, ccor nce it he er he r gr , r s he est nd r ion sset
Fexibl in Obj iv a Distibut Inv ment
l e ect es nd r ions/ est s
E a ished dur yourl ime (atusta eement orupon deah (aw l
st bl ing ifet r gr ) t il)
A icaions ofaTustSt uct e
ppl t r r ur Benefit ofaCor ae Tust
s por t r ee
E ae a int gener t lw lh t a pla
st t nd er aiona eat r nsfer nning Offer aper ua &pr
s pet l ofessiona solut fort ust
l ion r eeship
Phil nt opic pl nning
a hr a E bles cont yofinv mentma gement
na inuit est na
R ir
et ementorlega pla
cy nning Pr ides obj iv ya apr forfa ymember
ov ect it s oxy mil s
In a icipaion ofal
nt t ife-cha ev (e.g. birh ofachild)
nging ent t Ca ma ge hea ya
n na v dminist aiv bur
r t e dens
W funct
hen ioning a abusiness ow
s ner Offer asea coor t a execut ofser ices
s mless dinaion nd ion v
Neit Bacla int U.S. norit W lt a Inv mentM na
her r ys he s ea h nd est a gementemployees in t U.S. r
he endert x orlega a ice. Plea consultw h youra
a l dv se it ccount nt t x a isor a orator fora ice
a , a dv , nd/ t ney dv
concer yourpat rcir a
ning ricula cumst nces.
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10. Philanthropic Planning Options
Vehicles for G ranting
Potential G ifting
M ximum cont olov chait ble gr nt
a r er r a a s
S trategy
Private Long-t m fa yinv ement
er mil olv
Foundation
F actors to C ons ider C haritable M na
a gementresponsibilit
y
in Donating L ead
Trus t
Desir t pr ide curentchait ble benefit
e o ov r ra
M ximum t x deduct
a a ion
Ret inlong-er economic
a tm
benefitforfamily Ir ev ble t a
r oca r nsfer
E se ofa
a dministaion
rt
T x-efficientw lt ta
a ea h r nsfer Immediae giftt chait
t o ry Public
L contolov disbur
ess r er sement
s
C harity
Outright Geaert x deduct it
r t a ibil y
Donor G ift
Geaert x deduct it
r t a ibil y
Ret in curentincome int est
a r er Donor
Geaerdegr ofcontol(compaed t publ
r t ee r r o ic
L er economic benefitt chait
ong-t m o ry A dvis ed Fund
chait ov disbur
r y) er sement
s
T x defera onincome a ga
a rl nd ins
Pat lt x deduct
ria a ion C haritable
Remainder
Trus t Geaert x deduct it
r t a ibil y
S upporting
Organization Dedicaiont aspecific chait
t o ry
Neit Bacla int U.S. norit W lt a Inv mentM na
her r ys he s ea h nd est a gementemployees in t U.S. r
he endert x orlega a ice. Plea consultw h youra
a l dv se it ccount nt t x a isor a orat neyfora ice
a , a dv , nd/ tor dv
concer yourpat rcir a
ning ricula cumst nces.
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11. Important Dis clos ures – Products /S ervices A cces s ed Through
Wealth and Inves tment Management
“ B arc lays ” refers to any company in the B arclays PLC group of companies .
Bacla offer w lh ma gementpr s a ser ices t it client t ough Bacla Ba PLC("BBPLC")a funct in t Unit St t t ough Bacla Ca a Inc. ("BCI"), a a t ofBBPL BCI is ar er br dea a inv ment
r ys s eat na oduct nd v o s s hr r ys nk nd ions he ed aes hr r ys pit l n ffiliae C. egist ed oker ler nd est
a iser r t byt U.S. Secur a E nge Commission, w offices a 20 Pak Aenue, NewY k, NewY k 10 M
dv , egulaed he ities nd xcha ith t 0 r v or or 166. emberFINRAa SIPC. BBPLC, r er inE nd a Wles (no. 10
nd egist ed ngla nd a 26167), ha ar er office a 1 Chur l
s egist ed t chil
Pla London, E 5HP, Unit Kingdom, a is r aed byt F ncia Ser ices A hor y
ce, 14 ed nd egul t he ina l v ut it .
Bacla undera it U.S. secur ies a inv mentba business int na ofit w -ow subsidiayBacla s Ca a Inc. Bacl ys offer cor ae ba pr s a ser ices, a inv mentba pr s a ser ices out t
r ys t kes s it nd est nking he me s holly ned r r y pit l ra s por t nking oduct nd v nd est nking oduct nd v side he
U.S., t it client t ough Bacl ys Ba PLC. Bacla Ba PL is a hor a r aed byt UKF ncia Ser ices A hor a amemberoft L
o s s hr r a nk r ys nk C ut ized nd egul t he ina l v ut ity nd he ondonSt E nge. Bacla Ba PL is r er inE a No. 10
ock xcha r ys nk C egist ed ngl nd 26167. Regist ed Office:
er
1 Chur Pla London E 5HP.
chill ce, 14
M t ge loa int U.S. ae offer byBacla Ba Dela ae (NM SID: 50 3 M
orga ns he r ed r ys nk w r L 73 1), emberFDIC. E lHousingL . A morga loa ae subj t cr a pr t a ov l. Notalpr s ae a a ble ina st t orforalloa a s.
qua ender ll t ge ns r ect o edit nd opery ppr a l oduct r v ila ll aes l n mount
Ot r r ions a limit t a Bacl ys Ba Dela ae onlyor t morga loa w hint Unit St t ofA ica Bacla s Ba Dela ae a t or t morga loa forpr t a oa Ar t
her est ict nd aions pply. r a nk w r iginaes t ge ns it he ed aes mer . r y nk w r ffiliaes iginae t ge ns operies br d. elaionship w h t W lt a
it he ea h nd
Inv mentM na
est a gementdiv ofBacla does notha e t be est bl orma a t obt in t pr s orpr offer byBacl ys Ba Dela ae.
ision r ys v o a ished int ined o a he oduct icing ed r a nk w r
Cust Cr L ns ae ma byBacla Ba PLC, NewY k Br nch. Ba r tions r e tha t loa r iewa a ov lpr es t be independentof, a ca be impa ed by br a inv ment elaed mater orot business
om edit oa r de r ys nk, or a nk egula equir t he n ev nd ppr a ov o nd nnot ct , oker ge/ est -r t t s her
dealings.
F on deposita Pr a Ba t ough the CDA Spr a ae eligible fordepositinsur nce byt FDIC, butae notcov ed byt Secur ies Inv orPr ect Cor aion(“SIPC”). Int ev t ta FDIC-insur inst ut fa fina lly,
unds t ogr m nks hr R ogr m r a he r er he it est ot ion por t he ent ha n ed it ion ils ncia
deposit a tha ba ae eligible forFDICinsur nce pr ect up t alimitof$250 0 (forindiv l, IRAa cera sel dir ed r ir
s t t nk r a ot ion o ,0 0 idua nd t in f- ect et ementa ccount a up t alimitof$250 0 perj ow fora s hel j ybyt oormor indiv ls.
s) nd o ,0 0 oint ner ccount d ointl w e idua
Asignifica loss ofpr lcould r ifyourCDs ae sold pr tomaur y. T e is no secondaymaketforyourCDs issued t ough CDA
nt incipa esult r ior t it her r r hr RS.
W lt a Inv mentM na
ea h nd est ioningt ough Bacla Ca a Inc. in t U.S), ha ar nged w h PNCBa NA(“PNC”)fort issua ofCheck wit pr ileges a V ®cads t it client W you use yourChecks orCads, you w l
a gement(funct hr r ys pit l he s ra it nk, he nce r ing iv nd isa r o s s. hen r il
be accessingt Aa a Ba nce in y a
he v il ble la our ccountw h us. Y br a a
it our oker ge ccountw h W lh a Inv mentM na
it eat nd est a gementis notF insur
DIC- ed.
Inthe U.S., W lt a Inv mentM na
ea h nd est a gementdeposit a a ble ca forpat t br a a
s v ila sh ricipaing oker ge ccount int deposita
s o ccount a ba int IND Net or E ch ba w r e up t $24 0forindiv l, IR a cera self- ect r ir
s t nks he w k. a nk ill eceiv o 6,50 idua A nd t in dir ed et ement
account a $4 ,0 0forj a
s nd 93 0 oint ccount W a t ba int IND net or ha e been filled in t a ble a , W lt a Inv mentM na
s. hen ll he nks he wk v he pplica mount ea h nd est a gementw pla excess funds inBacla Ba Dela ae, t excess ba w houtlimit T
ill ce r ys nk w r he nk, it . hese
excess funds w lnotbe F insur
il DIC- ed.
Bacla W lt Tust (U.S.), N.A (“BW”)is anaiona ba limit t fiduciaya iv ies, subj t r t a exa t byt Office oft Comptolleroft Curency(t “OCC”). BW is a indir w ow subsidiayofBacla
r ys ea h r ees . T t l nk ed o r ct it ect o egulaion nd minaion he he r he r he T n ect, holly- ned r r ys
Ba PL ("BBPL a a a iae ofBacl ys Ca a Inc. (“BCI”)a v r ot subsidiaies of, a ent a t w h, BBPLC. Bacl ys offer w lt ma gementpr s a ser ices t it client t ough BBPLCa funct in t Unit
nk C. C”) nd n ffil t r a pit l nd aious her r nd ities ffiliaed it ra s ea h na oduct nd v o s s hr nd ions he ed
St tes t ough BCI, a a t ofBBPL BCI is ar er br dea a inv menta isor r t byt U.S. Secur ies a E nge Commission, w h offices a 20 Pak Aenue, NewY k, NewY k 10 M
a hr n ffiliae C. egist ed oker ler nd est dv , egulaed he it nd xcha it t 0 r v or or 166. emberF a SIPC.
INRA nd
Secur ies, mut lfunds a ot non-depositinv
it ua nd her estment inyoura
s ccountae subj t inv mentr includingpossibl loss ofpr la s inv ed, ae notsa ings a
r ect o est isk, e incipa mount est r v ccount deposit orot obl t of, orguaa eed byBW, a ae not
s, s her igaions r nt T nd r
insur byt Feder lDepositInsur nce Cor aion, t Secur ies Inv orPr ect Cor aion, ora ot gov nmenta
ed he a a por t he it est ot ion por t ny her er gency.
[T v lue ofinv ment ma foryoura
he a est s de ccountma go dow a w a up a is notguaa
y n s ell s nd r nteed. BW ha notma a is notma a guaa ees, includingw houtlimit t aguaa a t a specific lev ofper ma ofyoura
T s de nd king ny r nt it aion r ntee s o ny el for nce ccount.
Inv mentdecisions ma on beha ofyoura
est de lf ccountbyBW ae subj t v r maket curency economic, a business r a w a t r t tt inv mentdecisions w nota a be pr a Pa per ma a ed bya
T r ect o aious r , r , nd isks s ell s he isk ha hose est ill lw ys ofit ble. st for nce chiev ccounts
super ised orma ged byBW ma notbe indica e oft fut e per ma ofy a
v na T y tiv he ur for nce our ccount .]
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12. Important Dis clos ures – A wards & Rankings
A wards below are as s ociated with the C orporate and Inves tment B anking bus ines s es of B arclays .
1. Institutional Inve stor’s (20 “Al-A icaReseach Tea (Equity)a “A mericaFixed-Income Reseach T m” surveys, which pollindustrygroup representaives. Ra
11), l mer r m” nd ll-A r ea t nkings ae ba ont t a numberofindiv ls select for
r sed he ot l idua ed
ea t m. Sur eyr s r t opinions ofmor t n 3 0buy-side a lyst a porfolio ma ger a mor t n1,0 0inst ut Sur eyr t r t opinions ofmor t n1,60 moneyma ger a buy-side a l s a some 520
ch ea v esult eflect he e ha ,50 na s nd t na s t e ha 0 it ions. v esuls eflect he e ha 0 na s nd nayst t
inst ut (4 t ms).
it ions. 4 ea
2. ThomsonReut s, 4 20 M na Under r er -G lDebt E y&E y-r aed, Pr
er Q 11. a ging wit s loba , quit quit el t oceeds perBookr . Daa se cov a includes a USpublic, E o public a Rul 14 afee-el e globa debtta ct (incl G lbonds,
unner t ba er ge ll ur nd e 4 igibl l r nsa ions uding loba
E o/ 4 t a ct Y nkee Bonds, E obonds, For Bonds a pr r st a w a M A &T xa M A F a Cr A Debt Pr
ur 14 a r nsa ions, a ur eign nd efered ock) s ell s BS, BS a ble unis. ll eder l edit gency , oceeds perBookr , (USD). A lea t bles ae ba on dea pr
unner ll gue a r sed l oceeds (t a issue
ot l
amountmult
iplied byt issue pr unl ot w st t a curentdaaa pr ious yea’s daais a of9:0 a E on December3 20
he ice) ess her ise aed; nd r t nd ev r t s 0 m DT 1, 11.
3. ThomsonReut s, 4 20 USM
er Q 11. unicipa Pr
l, oceeds perBookr (USD). Ra
unner nkings a v
nd olume tot ls include a municipa newissues under r t dur t per fr Jnuay1, 20 t December3 20 a fr Jnuay1, 20 t
a ll l witen ing he iod om a r 10 o 1, 10 nd om a r 11 o
December3 20 ofw T
1, 11, hich homsonReut s w s ma a ae. E w e indicaed, t r nkings quot a e do notinclude shor-t m, pr iminay pr ae pla
er a de w r xcept her t he a ed bov t er el r , iv t cementorr nk-ineligibl issues.
a e
4. ThomsonReut s, 4 20 (F Y r20 M , F ncia A isor Pr
er Q 11 ull ea 11), &A ina l dv s, oceeds perbookr (USD). A lea t bles ae ba on dea pr
unner ll gue a r sed l oceeds (t a issue a
ot l mountornumberofshaes mult ied byt issue pr unless ot w st t
r ipl he ice) her ise aed.
5. Geenw A t Geenw Shae L der M r 20 -F ms na a Geenw Lea s ha e dist
r ich ssociaes, r ich r ea , ach 11 ir med s r ich der v inguished t hemselv fr t compet or byr ingG scor t texceed t oft compet or byast t ica significa magin.
es om heir it s eceiv QI es ha hose heir it s aist lly nt r
Geenw Qua yIndex (G T G is ast t icalymea
r ich lit QI): he QI aist l ningfulmea ementoft qua yofser ice pr ided byseller ofinst ut lfina lser ices. Itsummaizes the qua aiv ev luaions pr ided bythe user offina lpr s a
sur he lit v ov s it iona ncia v r lit t e a t ov s ncia oduct nd
ser ices a t fina lser ices pr ider int asingle scor T scor is nor lized a t a med t ascae fr 0t 1,0 0 w h amea scor of50 a ast ndad dev t of166.7. Fir eaningdist iona aGeenw Qua y
v bout heir ncia v ov s o e. his e ma nd r nsfor o l om o 0 , it n e 0 nd a r iaion ms r inct s r ich lit
L derha e beenr
ea v ecognized byt client a pr idingt industr bestqua yser ice inar nge offina lser ices businesses includinginv mentba
heir s s ov he y's lit v a ncia v est nking, commer lba
cia nking, fixed-income saes a t a equit sa a tr ding,
l nd r ding, ies les nd a
for excha r a st uct ed pr s, commodit conv t bonds, a inv mentma gementin t Unit St t Ca da U.K. E ope, a A (ex-Jpa
eign nge, et il r ur oduct ies, erible nd est na he ed aes, na , ur nd sia a n).
6. Int estRae Der aiv House oft Y r R A ads, Jnuay20 &7. Commodit House oft Y r Risk A ads, Jnuay20 -T R edit ia t m r ied hea ilyonclientfeedba alotoft t lkingw h r ma ger a for
er t iv t es he ea, isk w r a r 11 y he ea, w r a r 11. he isk or l ea el v ck, ime a it isk na s, sking
demonstaions ofr sy ems a v ingr r t T j
rt isk st nd iew isk epors. he udgingper la ed t ee mont bet eenOct a December20 9. Ba w e a tosubmitinfor t ont business inea oft pr caegor in t 12 mont t
iod st hr hs w ober nd 0 nks er sked maion heir ch he oduct t ies he hs o
October20 9, a t fir orindiv l ont shorlistt under entaser ofint v s. Inma ca R a t see t m sheet r syst a int na pr a loss figur forindiv ldesks. Risk t per med al hydue
0 nd hose ms iduas he t hen w ies er iew ny ses, isk sked o er s, isk ems nd er l ofit nd es idua hen for engt
diligence process, cont ct ba client t confir t a t pla a t tcust s w e ha w h t end r ts. In ma t fina decisions, anumberoffa or w e consider including(butnotr r ed t r ma gement
a ing nks’ so m r des ook ce nd ha omer er ppy it he esul king he l ct s er ed, est ict o) isk na ,
cust ser ice (in pat r helpingclient r ce hedges, r r ur under aerposit a pr ide r ma gementa ice), liquidit pr isiona qua yofpostsa ser ice.
omer v ricula, s epla est uct e wt ions nd ov isk na dv y ov nd lit - les v
* Thom son R e ute rs rankings are in the ord e r of the vol e of activity and m arke t share of in 201 1 .
um
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13. Important Dis clos ures – A bout Ratings
Moody's r t r esentt opinion ofM
aings epr he oody's Inv or Ser ice a t t r t e cr orhiness ofsecur ies. A such, t shoul be used inconj ionw h t descr ions a st t ics a r inM
est s v s o he elaiv editw t it s hey d unct it he ipt nd aist ppeaing oody's publicaions.
t
Refer shoul be ma t t st t s forinfor t r r t issuer M
ence d de o hese aement maion egading he . oody's r t ae notcommer lcr r t Inno ca is defa orr er t be imput unless expr yst t
aings r cia edit aings. se ult eceiv ship o ed essl aed.
Sta r &Poor cr r t expr for ad-lookingopinions a t cr w t
ndad 's edit aings ess w r bout he edit orhiness ofissuer a obligaions. M e specifica y, St ndad &Poor cr r t expr ar t e r nkingofcr w t
s nd t or ll a r 's edit aings ess elaiv a edit orhiness. Issuer a
s nd
obligaions w h higherr t ae j
t it aings r udged byus t be mor cr w t t nissuer a obligaions w h low cr r t Cr w t
o e edit orhy ha s nd t it er edit aings. edit orhiness is amult fa ed phenomenon. At
i- cet lhough t e is no"for " forcombiningt v r
her mula he aious
fa s, ourcr r t at t condense t combined effect int r t symbols a asimple, one-dimensiona sca Indeed, a discussed below t r t e impor nce oft v r fa or ma cha in differ sit t
cet edit aings tempt o heir s o aing long l le. s , he elaiv ta he aious ct s y nge ent uaions.
T ter cr w t
he m edit orhiness r s t t quest ofw herabond orot fina linst umentw lbe pa a dingt it cont a ua t ms. A fir blush, t ideaofcr w t
efer o he ion het her ncia r il id ccor o s r ct l er t st he edit orhiness seems ent el sta for ad.
ir y r ight w r
Ar t is notar
aing ecommendaiont pur se, hold orsella inv mentina
t o cha n est smuch a ar t does notcommenta t inv mentr ur orsuit bil yforapat a inv or T r t a
s aing s o est et n a it ricul r est . he aings ssigned t t Ba a ess t likel oft
o he nk ddr he ihood he
pa ymentofpr la int eston t DepositA s a dingt t t ms butae solelyt v oft a
incipa nd er he ccount ccor o heir er r he iew he ssigningr t a
aing gencya ae subj t a limit t t tt a
nd r ect o ny aions ha he ssigningr t a aing gencyma impose. Simila r t on
y r aings
differ t ofinv ment donotnecessail mea t sa t T t ext t Ba is r t bya r t a
ent ypes est s r y n he me hing. o he ent he nk aed ny aing gency, t tr t a ha aing gencyma cha it r t oft Ba ift tr t a
y nge s aing he nk ha aing gencybeliev t tcir a ha e
es ha cumst nces v
cha t e w e er or in a lysis orot w
nged, her er r s na her ise.
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