BCG SECURITIES, INC.

SUPERVISORY & PROCEDURES MANUAL

Amended and Restated August 2007

BCG Securities, Inc. 600 Delran Parkway, Suite B

Delran, NJ 08075

TABLE OF CONTENTS

1. OBJECTIVE...................................................................................................................... 2

2. OFFICE OF SUPERVISORY JURISDICTION.................................................................. 2

3. RESPONSIBILITY ............................................................................................................ 2

4. PERSONNEL.................................................................................................................... 5

5. REPORTING PERSONAL LITIGATIONS, CUSTOMER COMPLAINTS, LEGAL AND REGULATORY PROCEEDINGS ......................................................................................... 9

6. BCGS ADVERTISING .................................................................................................... 12

7. DAY-TIMER.................................................................................................................... 12

8. CORRESPONDENCE & COMMUNICATIONS .............................................................. 12

9. INVESTMENT COMPANY SECURITIES ....................................................................... 17

10. DIRECT PARTICIPATION PRORAMS......................................................................... 21

11. LOW PRICED SECURITIES......................................................................................... 22

12. MARK-UP POLICY AND FAIR PRICING..................................................................... 25

13. GIFTS AND GRATUITIES ............................................................................................ 25

14. PROHIBITION AGAINST GUARANTEES ................................................................... 24

15. ANNUAL REVIEW........................................................................................................ 24

16. CONTINUING EDUCATION......................................................................................... 26

17. NEW ACCOUNTS ........................................................................................................ 27

18. ANTI-MONEY LAUNDERING PROGRAM................................................................... 27

19. REGULATION T ........................................................................................................... 35

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TABLE OF CONTENTS

20. TRADE EXECUTION.................................................................................................... 35

21. GUIDELINES FOR BEST EXECUTION ....................................................................... 30

22. BCGS NET CAPITAL/HANDLING FUNDS AND SECURITIES................................... 35

23. TRANSACTION REVIEW............................................................................................. 36

24. CONFIRMATIONS........................................................................................................ 32

25. MONTHLY CUSTOMER STATEMENTS...................................................................... 38

26. RISKLESS TRADING ACCOUNT................................................................................ 38

27. CLIENT RECORDS ...................................................................................................... 38

28. MUNICIPAL SECURITIES............................................................................................ 35

SPECIAL PROCEDURES FOR BRANCH OFFICES AND CONTRATUAL PROGRAMS 37 - END

APPENDIX A. MUTUAL FUND CLASS DISCLOSURE FORM......................................END

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INTRODUCTION

BCG Securities, Inc. (BCGS) is a fully disclosed Broker-Dealer established in 1965. BCGS maintains a clearing agreement with Pershing, LLC (Pershing) in Jersey City, New Jersey. BCGS is a member of the NASD, SIPC, and a Registered Investment Advisory (RIA) firm with the SEC BCGS participates as a:

Broker-Dealer retailing corporate over the counter securities; Mutual Fund Retailer; U.S. Government and Municipal Securities Dealer; Broker-Dealer selling variable annuities or life insurance; and Investment Advisory Services.

BCGS’ principal customer base is qualified pension and profit sharing plans. BCGS offers brokerage services and financial planning through its network of Registered Representatives (RRs) and Registered Investment Advisors (RIA’s). Our product mix is conservative, principally mutual funds and government or government agency bonds. As a result of the long-term relationships established with our clients, we have experienced growth in the size of some of our more established customer accounts. We found our clients looking for professional management for a portion of their portfolios. Those clients enlisted the services of money managers who in turn effected their transactions through a Pershing account with BCGS as broker of record. BCGS realizes the revenue generated from the commission on those accounts. BCGS does not maintain a relationship with any money manager and clients may direct the accounts to their broker of choice.

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BCG SECURITIES, INC.’S

SUPERVISORY & PROCEDURES MANUAL

1. Objective The objective of the written Supervisory & Procedures Manual (SP's) is to assist management personnel who have supervision and control as to the primary rules established by the Securities and Exchange Commission (SEC), the National Association of Securities Dealers, Inc. (NASD) and the State Regulatory Commission (Blue Sky Laws). SP’s also provide guidance to registered representatives (RR’s) in connection with their engagement in the securities business. Section 3010 of the NASD Rules of Conduct (ROC) provides that each member firm establish, delegate, and maintain procedures with respect to the supervision of Registered Representatives and any associated person in order to comply with securities laws and regulations, as well as NASD Rules. It is not the objective of the SP's to set forth all rules and regulations and BCGS policies with which supervisory personnel must be concerned in carrying out. The SP's have been written in coordination with BCGS’ officers, and the Rules of Conduct. This manual is updated with regulatory changes as they occur. Updates or newly instituted procedures are followed with the date the update or addition occurred.

2. Office of Supervisory Jurisdiction "Office of Supervisory Jurisdiction" (OSJ) is defined as the office responsible for the direct supervision and review of the activities of associated persons and all officers. Except as provided below, BCG Securities, Inc., 600 Delran Parkway, Suite B, Delran, New Jersey 08075, is designated as the main OSJ. Pertinent Officers of BCGS are:

Robert Paglione, Chief Executive Officer. General Securities Principal. Manager of the firm’s branch offices. Adam J. Paglione, President and Chief Compliance Officer. Carol Paglione, Secretary and Treasurer.

3. Responsibility (amended January 1, 2005, January 1, 2006, and August 2007) In accordance with Rule 3010(a)(6), persons designated as responsible supervisory personnel shall have obtained the necessary license(s) for which they are supervising.

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Additionally all supervisors will receive firm element training in relation to their supervisory responsibility. Robert Paglione, GSP, is responsible for the overall supervision and operation of BCGS. Various GSP’s associated with BCGS are responsible for the day-to-day activities of the firm. Mr. Paglione is the President of BCG Securities, Inc. and holds a Series 24 license. He maintains an office in Delran, NJ. Adam Paglione, GSP, is designated as the Compliance Officer of BCGS and shall be responsible for the overall compliance with applicable securities laws and regulations. Mr. Paglione is the President of BCG Securities, Inc. and holds a Series 24 and 28 license. He maintains an office in Delran, NJ. On a periodic basis, Mr. Paglione will review, and if necessary revise, these supervisory procedures and control polices. Additionally, Mr. Paglione and/or his designated GSP will periodically test these procedures in accordance with NASD Rule 3012 by reviewing BCGS’ daily procedures and their accordance with these written policies. Finally, in accordance with Rule 3013(b), on an annual basis Mr. Paglione will be responsible for certifying BCGS’ overall compliance the applicable securities laws and regulations. A non-designated General Securities Principal (GSP) is responsible for the supervision of the daily branch operations, including but not limited to, Regulation T, handling of funds and securities, review of transactions, review of correspondence, proper registration and licensing, markups, review of accounts, suitability of recommendations, mutual fund breakpoints, advertising and sales literature, customer complaints, due diligence, insider trading, electronic filing of forms, and employee accounts. All registered representatives are supervised directly by a GSP associated with BCGS. Joseph Solimeo, a Series 28 Financial Operations Principal, is responsible for insuring BCGS files quarterly FOCUS reports accurately and timely. In accordance with Rule 3010(b)(4), any amendments to these procedures will be placed on the firm’s website, www.bcgsecurities.com. RR’s will be made aware of the amendments via e-mail distribution. 3.1. Periodic Reviews of Business and Supervisory System (amended January 1,

2006)

On a periodic basis, not less than annually, a General Securities Principal will review the overall BCGS supervisory system, procedures, and compliance inspection policy that is currently in place at BCGS. The review will further examine the general compliance and supervisory systems in place for all of the RRs associated with BCGS.

Additionally, Principal will visit all branch offices of BCGS on a periodic basis to

conduct an onsite compliance review and to meet with the branch RRs. This review shall include examination of random customer account files to detect and prevent irregularities or

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abuses, the office systems and procedures, the RRs’ day timers, the office’s check log, and meet with various RR’s who work in the branch.

Following these reviews, the reviewing Principal shall prepare a written

memorandum detailing the results of the review, along with recommendations to management that are designed to enhance and solidify BCGS’ compliance with all applicable rules and regulations. This certification will attest to the establishment, maintenance, review, testing, and monitoring of the firm’s polices and written supervisory procedures. The memorandums shall be kept by the firm’s compliance officer at the firm’s Delran, NJ OSJ office. 3.2. Review of Accounts A General Securities Principal or his designate shall undertake periodic reviews of client and RR accounts to look for red flags to detect unauthorized or excessive trading.

A review is carried out to monitor that products are sold by appropriately licensed RRs by product type, NASD Series license, and by State Blue Sky Laws. Review of client accounts shall be performed by reviewing the brokerage account trade blotter, mutual fund commission statements, and other available data. Reviews may include:

• Suitability

• Mutual fund switching and breakpoints

• Mutual fund share class

• Low-priced securities

• Mark-ups

• Large trades Documentation of this process will include initialing trade blotters, and various notes on the statements where goals and objectives have been verified to insure appropriate trades.

3.3. Rule 3012, Supervision of Producing Managers That Require Heightened Supervision

In accordance with NASD Rule 3012, producing managers whose production is

exceeds the Limited Size and Resources Exception shall be placed on heightened supervision by the firm. Such producing branch manager shall be supervised by directly by Adam Paglione.

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On a quarterly basis, all the gross revenue generated by all branch mangers shall be reviewed to determine the overall percentage that such branch manager is responsible for producing. If it is determined that a producing branch manger must be placed on heightened supervision, supplemental procedures will be initiated to supervisor the branch manager, including weekly review of transmittal of customer funds and securities, weekly review of branch check log, weekly review of the manager’s trade blotter, customer changes of address, customer changes of investment objective, and heightened GSP review of all account activity. This review will be conducted by Adam Paglione.

On an annual basis, Mr. Paglione will review and test the heightened supervisory procedures, if any have been enacted, and will report such results to the firm’s Executive Officer. 4. Personnel

4.1.1 Employment of New Personnel BCGS officers are required to determine through investigation of the character, qualifications and experience of any prospective associated person prior to employment. Each candidate shall file an application of employment and a U4 Form (with supporting required documents) with the appropriate officer. If the candidate has been associated with another firm, a GSP or appropriate licensing personnel shall contact such firm to inquire as to any adverse information concerning the candidate. All persons who hold a securities license, or held one in the past will be required to sign a BCGS pre-hire authorization form before reviewing the person’s NASD history. The pre-hire forms will be maintained in the candidate’s file. This will include RR’s and clerical candidates. Additionally, all employees of BCGS are required to have a background completed by the firm’s Human Resources department prior to their employment with the firm. This background check will review for a past criminal and credit history. A member of the firm’s staff will also conduct a due diligence to learn the nature of a prospective RR’s book of current business, including but not limited to the type of mutual funds and variable annuities held in client accounts. This due diligence will enable the firm and the prospective RR to know which securities can be transferred over without disruption, and which securities may need to remain at the sending firm. The results of this due diligence will be discussed with a GSP prior to registration of the RR. If there are any securities that cannot be transferred over without disruption, a suitability analysis will be conducted to determine, on a client by client basis, if the certain securities should be liquidated and transferred, or should remain at the sending firm. The firm’s compliance officer, Adam Paglione, will be responsible to ensure that proper registration and licensing procedures are in place and that the firm is staffed with personnel holding the appropriate license(s).

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4.1.2 Terminations Registrations of RRs shall be maintained for those persons engaged in the securities business transacting through BCGS. It is BCGS’ policy not to "Park" registrations.

When a RR terminates employment with BCGS, a NASD Form U-5 shall be prepared and filed with the NASD and the appropriate states within 30 days of the termination date. A copy of the U-5 shall be provided to the terminated RR and a copy shall be maintained in the terminated RR’s file.

The processed fingerprint card and records pertaining thereto shall be retained for a period of three years from the termination date of an individual with BCGS. 4.2 Employee And Employee Related Accounts Absent unusual circumstances, all employees should effect their personal securities transactions through accounts at BCGS. No employee may maintain an interest in accounts at any other financial institution unless prior written approval is obtained from their supervisor.

A. An Employee Account may not: 1. Enter into a cross transaction with any account without prior approval of the Branch Manager;

2. Meet the purchase price of a security by liquidation of the same

security or by sale of other securities prior to, or after settlement date; or

3. Obtain an extension without the approval of a GSP. All employees are

expected to pay for securities on or before the settlement date.

B. An Employee and Employee-Related Account may not:

1. Receive priority over the public in the execution of an order; 2. Purchase a premium offering ("Hot Issue") in contravention of the

Free/Riding and Withholding Interpretation of the NASD Rules of Conduct; 3. Enter into any purchase or sale of any security, option or commodity which

would be in violation of federal or state securities laws, the rules and regulations of any exchange or other regulatory agency, or BCGS;

4. Sell short securities which are the subject of an offering; or 5. Be improperly or under margined or otherwise in violation of margin

requirements. Prior Branch Manager approval is required before entering

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into a margin account as it is not customary for our representatives to participate in this type of activity.

C. Trades or Solicitations Related to BCGS Business

1. No employee may recommend or solicit a transaction in securities or buy or sell securities for his/her own account if the solicitation or transaction is based upon information that BCGS:

(a) Is preparing or working on a research report concerning that

security; or (b) Is considering becoming a market maker in the subject security

or is considering terminating its market maker status. BCGS’ current net capital requirements do not permit us to act as a market-marker. The reference to market-maker activity is for information purposes only should BCGS amend its business activity in the future.

D. Identifying Employee-Related Account

It is the responsibility of every employee to identify in writing to a GSP each account in which he/she maintains an interest as well as each employee-related account.

E. Investment Clubs

1. Client Investment Clubs

Absent prior approval of a GSP, employees may not be members of or participate in the formation, sponsorship, solicitation of interest or investment in investment clubs with any client.

2. Employee Investment Clubs

Employees who wish to form employee investment clubs must have the prior approval of a GSP. Clients of BCGS may not be participants in a BCGS employee investment club.

Note: In either instance, an employee must identify an investment club account in which he/she is a participant as an employee account.

F. Private Securities Transactions No employee shall participate, in any manner, in any private securities transaction with or without compensation, without submitting a written request and receiving the prior written

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approval of a GSP. "Participate, in any matter," means but is not limited to, soliciting, acting as finder, selling, promoting, facilitating the sale, underwriting, marketing, advertising. etc. 4.3 Inside Information The improper use of material, non-public information concerning any company or security is expressly prohibited by BCGS policy, and may lead to disciplinary action, including possible termination of employment. This may also subject the RR and BCGS to disciplinary action and possible fines by the SEC and NASD. A GSP conducts supervision of insider trading activity via the following procedures:

1. Tickets are reviewed daily for activity, including but not limited to, insuring client tickets are processed before those of a representative or any person associated with the representative. Activity outside the RR’s normal trading pattern and purchases are consistent with the objectives of the client.

2. A file is retained with all published information supplied to the OSJ by outside

sources. RR’s are permitted only to discuss the facts as they are reported in published articles. For purposes of this policy, it is expressly prohibited to improperly use, directly or indirectly, for one's own benefit or the benefit of any other person, nonpublic proprietary or market sensitive information:

1. Generated internally by BCGS; 2. Received by BCGS as a result of a business or investment banking relationship; or 3. Obtained from a client who is in possession of the material non-public information.

Employees who come into possession of such information are prohibited from engaging in any of the following activities with respect to the affected company or security:

1. Effecting transactions in the security in question for their own account, employee-related account, or accounts over which they exercise control, discretion, or similar power;

2. Solicit transactions in the securities of the subject company; 3. Disclosing such information to anyone in BCGS with the exception of the

authorized officer needing the information to carry out related functions; and 4. Disclosing the information to anyone who would use it unlawfully.

The following transactions by employees are not included within the meaning of the this rule:

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1. Transactions in employee accounts directly related with mutual funds or annuities;

2. Transactions in the employee's individual account opened at another firm; and

3. Transactions with the employee's immediate family members, if the employee

receives no compensation. 4.4 Outside Activities

A. Directors and Officers of Outside Corporations BCGS personnel are required to obtain the prior permission of a GSP before accepting a directorship or officer position in any corporation.

B. Outside Employment BCGS personnel must obtain prior approval from a GSP to engage in the following activities:

1. Employment of any nature; 2. Appointment to committees or organizations which require substantial time

commitments or provide remuneration, whether securities related or not;

3. Broadcasting or teaching activities; or

4. Accepting appointments as trustee, administrator or executor except where family related.

C. Use of the BCGS Name and Facilities

No employee engaged in any approved outside activity may represent to any person that he or she is acting as a representative of BCGS in connection with such activity.

D. Expert Witnesses Employees are not permitted to testify as "expert witnesses" without the prior approval of BCGS’ officers. In addition, employees may not offer to analyze, account or give investment advice in a legal proceeding. 4.5 Limitations On Employee Authority

A. Confidentiality

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No employee shall divulge confidential information concerning client affairs to any person. Additionally, no employee shall use information or records of BCGS that pertain to a client for such employee’s own benefit. A client’s account should never be discussed outside of BCGS absent written consent of the client. Employees are similarly prohibited from discussing a client’s account with other BCGS employees except when necessary to service the client. A GSP is to be notified immediately of any legal action concerning a client or their account.

B. Tax Advice A RR from time to time may be called upon by a client to explain the tax ramification of a particular product. No RR may assist in the practice of law or accounting, and the RR must take steps to ensure that he or she is not providing tax or legal services which may be viewed as violation of state or federal requirements relevant to the practice of law or accounting. An RR should refer the client to consult with a tax advisor or attorney regarding tax and financial consequences to their accounts.

C. Advice on Proxies

BCGS employees may not volunteer advice concerning the voting proxies for clients. A GSP must first review client requests for BCGS’ opinion. Upon review BCGS will prepare a clear and concise summary of the facts surrounding the proxy and relay those findings to the client. BCGS or the RR may not direct the client as to how to vote.

D. Class Actions Employees may not render opinions regarding the various aspects of a class action unless otherwise requested in writing by the client. In such event, the circumstances regarding the class action will be forwarded to a GSP for review. A GSP will then prepare a concise report regarding the facts of the class action and the officers of BCGS will render an opinion as to what is in the best interest of our clients. That opinion is the only authorized statement a RR may make to a client.

E. Facilitating Trades

The clearing firm of Pershing, LLC is expressly used for the trading of client accounts in addition to dealer agreements on file for mutual funds, limited partnerships, and unit investment trusts all of which have been approved by a GSP. Any additional outside sources of products must first be reviewed and accepted by a GSP and officers of BCGS prior to purchasing for client portfolios. Please refer to item 1.12 of the Supervisory Procedures regarding trade execution.

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G. Execution of Documents No employee may under any circumstances sign a client's name to any document, even pursuant to the client’s request. All paperwork stock powers, letters of instruction etc. must be prepared by the RR or an administrative assistant, approved by a GSP and a copy maintained with necessary documentation in the client’s investment department file. Any purchase requiring the completion of a new account application must be approved by a GSP. A copy of the application must be maintained in the client’s file. All documentation is prepared by the department administrator for approval by a GSP. 5. Reporting Personal Litigations, Customer Complaints, Legal & Regulatory

Proceedings 5.1 Customer Complaints Upon receipt, all written complaints will be forwarded to a GSP along with any documentation. The information will be retained in a specific "Complaints" file. A complaint shall mean a written statement from a customer or any person acting on behalf of a customer who is alleging a grievance involving the activities of those persons under the control of the member in connection with the solicitation and execution of any transaction or the disposition of securities or funds of that customer. Oral complaints shall be put in writing and filed with a GSP, and also must be recorded in the RR's Day-Timer which is reviewed by a GSP. All complaints, written or oral, require a written response to the client. In addition to the Complaint file copy, the client’s file also receives a copy of the written response. All complaints will be reported promptly as required pursuant to NASD rules. 5.2 Legal Proceedings Employees must notify a GSP immediately upon receipt of the following:

A. Oral or written contact from any government agency, regulatory body or other law enforcement agency concerning any investigation litigation or other inquiry. BCGS personnel may not discuss BCGS business or that of its clients with any outside party without prior approval of the appropriate officers of BCGS;

B. Complaints related to prior employment or disciplinary action; C. Any litigation or arbitration in which the employee is named as a party, required to

testify;

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D. Any bankruptcy or contempt proceeding, cease or desist order, injunction or civil judgment in which the employee is a named party;

5.3 Reporting of Complaints

A. Statistical and summary information regarding customer complaints shall be reported to the NASD by the 15th day of the month following the calendar quarter in which the customer complaints are received by BCGS.

B. The reporting of any of the conditions set forth in this section 5 shall be made to the NASD within 10 business days after BCGS knows or should have known of the existence of the condition.

C. All reporting under this section shall be conducted by a GSP or his designate.

6. BCGS Advertising Advertisements for seminars, services and products cannot be placed without the prior approval of a GSP. Notices of promotions, personnel changes, etc. may only be publicly disseminated with the prior approval of a GSP. Should published or radio advertising be utilized it must first be submitted to a GSP and sent to NASD for approval.

7. Day-Timer Every RR is required to maintain a "Day-Timer" or scheduling calendar, in either a paper or electronic format. The Day-Timer will include the contact names and nature of all contacts. Any contact with the customer is recorded in the Day-Timer. When sales are made the RR must disclose to whom he spoke and the nature of the conversation so as to disclose all pertinent information. Any contact that is problem related or extraordinary will be transferred to the customer complaint file. Day-Timers will be reviewed periodically and all RR’s will certify at least quarterly they are properly maintaining their Day-Timers.

8. Correspondence & Communications 8.1. Public Communications

A. Seminars and Other Speaking Activities

1. An employee or RR must obtain prior approval and must submit an outline of the presentation prior to the speaking engagements.

2. Speaking activities not sponsored by BCGS must be educational in nature.

(a) Only generic discussions are permitted.

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(b) Literature is to be distributed on a pick-up basis only. (c) A GSP will be supplied with a copy of the curriculum for any classes

amended by a representative. Copies of product information or agendas for product seminars will be supplied to a GSP prior to use and maintained in a file specifically designated for that purpose.

B. Contributions to newspaper or magazine articles:

1. The employee or RR must obtain prior written approval before submitting any article and a copy of NYSE Rule 472 "Communications with Public" and review it;

2. Appropriate disclaimers in accordance with Rule 472 must appear

and guidelines regarding suitability, diversification and risk must be adhered to;

3. Employees must provide a copy of the actual published article to a

GSP; 4. Written communications recommending Direct Investments, Mutual

Funds or any other security offered by a current prospectus are prohibited, except sales literature made available by the issuer. Refer specifically to the Section on investment company shares and correspondence; and

5. The above requirements also apply to facsimile transmissions and

e-mail.

C. Communications with the Press The interests of the investing public are best served by ensuring that public comment concerning BCGS and its personnel and business affairs are accurate and complete. To obtain this objective, no employee may communicate with the press or other media with matters relating to BCGS without prior approval of BCGS’ officers.

D. Use of Titles Personnel may not use titles other than those officially designated by BCGS. Approved titles include MBA, CFP, CFA and CLU, if qualified. The use of Attorney, C.P.A., Doctor. Esquire, M.D., or P.H.D. is prohibited unless prior approval is obtained.

Particular attention must be given to all letters and memos of solicitation initiated within BCGS to prevent statements that are unreasonable, unprofessional, exaggerated, based on a rumor, do not fully disclose sales charges or penalties for withdraw or are in violation of the NASD's Rules of Conduct. Careful observance must be given to correspondence

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concerning new issues that are subject to prospectus requirements. Statements may not be made that constitute the position rising to a certain price or guaranteeing no loss in the account.

8.2 Incoming and Outgoing Correspondence All business related incoming mail, including e-mail, addressed to BCGS or any RR will be reviewed by a GSP or his designate so that incoming funds and securities are properly processed and that complaints, inquiries and instructions from customers are handled promptly. Any correspondence containing any complaint must be reviewed personally by a GSP prior to distribution. All correspondence reviewed by BCGS will be initialed by a GSP or his designate, and maintained in a specified file. All checks contained in incoming correspondence will be logged in and processed in accordance with current procedures. All outgoing business related correspondence will be reviewed by a GSP prior to release. A copy of that correspondence and any attachments will be initialed by a GSP and maintained in a specified file for that reason, along with the client’s individual file. Registered Representatives are prohibited from typing their own forms, letters or other documents for disbursement to a client. All correspondence is to adhere to the guidelines as stated above. Incoming and outgoing communications includes facsimile transmissions and external e-mail communications. 8.3 Collateralized Mortgage Obligations (CMO's) In accordance with Rule 2210 and IM-2210-1 of the Rules of Conduct, the definition of a CMO must be included in all correspondence. The correct definition will read, "A CMO is a multi-class bond backed by a pool of pass-through securities or mortgage loans.” The proprietary name CMO must be clearly identified in any communication. All communications with clients regarding CMO's must contain the BCGS Prepared CMO Educational Brochure and alert the customer to the presence of that material in the communication. During a verbal conversation, the RR must offer the brochure. To prevent confusion, communications may not contain comparisons between CMO's and other products, including but not limited to Certificates of Deposit. The only sales literature authorized for use is our Educational Brochure. Any other communication requires NASD approval 10 days prior to use.

Only those CMO issues authorized for sale by a GSP on the Weekly Product List are available for sale to our clients. Under Section 2210 of the Rules of Conduct, we are required to be conversant in all aspects of CMO's and insure that we are offering our clients

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the product that best suits their needs. By offering products on our sales list, we insure we have adequate information to offer the products to our clients. The following additional rules apply:

1. The distinction between yield for the life of the security and yield to maturity are to be presented to the client based on the purchase price of the security and the time of purchase taking into consideration the life remaining in the investment.

2. Statements regarding average life of CMO’s or REMIC’s are to be

balanced with information regarding fluctuation in average life with changes in interest rates. Specifically, language as approved by the NASD for BCGS’ Fixed Income criteria must be present:

"Cash flows are based on prepayment assumptions as derived from the Public Securities Association benchmark. Anticipated yield and average life of the securities will fluctuate depending on the actual prepayment schedule and interest rate environment the bond experiences. The maturity of each class of bond is estimated dependent on the rate at which the underlying mortgages pay back principal. If the collateral prepays more quickly than anticipated the average life of the security may shorten, and if prepayments slow down, the average life may lengthen."

CMO purchases should be consistent with the cash flow needs of the client. Statements that the security is backed by the US Government are strictly prohibited, as are guarantees of performance. Full disclosure of the bond’s government agency issue status and average life based on PSA is an integral part of a balanced sales presentation for this type of product. Representatives are held accountable for the knowledge attained at the CMO training seminar and are expected to sell the security in accordance with guidelines established by BCGS’ Officers.

8.4 Variable Life Insurance and Variable Annuities In accordance with Rule 2210 and IM-2210-2 of the Rules of Conduct, all communications regarding any variable life or annuity product must describe the product as a variable life insurance policy or variable annuity as applicable. All communications discussing liquidity must describe the impact of early redemption, including deferred sales charges and tax penalties. The customer must be informed that the insurance company does not guarantee any funds in the separate account of the policy or annuity. The relative safety of any fixed investment account guaranteed by the insurance company should not be overemphasized as it depends on the claims-paying ability of the insurance company.

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Prior to the sale of any variable life or annuity product to a new customer, the representative shall obtain from the customer information similar to that required for New Accounts under section 11 of this Manual. A “New Account” form shall be available for this purpose. The information obtained shall be used by the representative in evaluating the suitability of the investment for the customer. 8.4.1 (Effective as of June 14, 2004). Additionally, the following steps should be followed or taken into consideration for suitability, disclosure, and principal review, each purchase or sale of a variable annuity contract: 1. RR’s should make a reasonable effort to obtain customer information including: occupation, marital status, age, number of dependants, investment objective risk tolerance, tax status, previous investment experience, net worth, annual income, and investment time-frame objective (long-term or short-term). Client information complied by the RR must be documented and signed or initialed by the RR. This information must be maintained in accordance with BCGS, NASD and SEC regulations as set forth in this Manual. 2. RR’s must discuss with the client pertinent issues such as liquidity and surrender charges, sales charges, fees and expenses, federal and state tax treatment, applicability of the “free-look” period, and market risk. 3. All applications and forms must be completed by the client in full and such information should be confirmed with the client as being accurate. All forms and applications must be forwarded to a GSP for review and approval. 4. The RR must review each variable annuity transaction as to its suitability, disclosure of all fees and charges, and other relevant information prior to approving the transaction. 5. Each RR must have sufficient knowledge of the variable annuity that is being recommended, including the death benefit, fees and expenses, sub-account choices, features, and tax treatment. 6. As practical, the RR should provide the client with a prospectus when each variable annuity is recommended. The prospectus should be discussed with the client. 7. Only approved sales literature may be used by a RR for the sale of a variable annuity. 8. All surrender charges and associated tax implications should be fully disclosed to the client prior to the transaction. RR’s should be sure that all clients who are 59 ½ or older are informed when surrender charges apply to withdrawals. 9. If the variable annuity is for a tax-qualified retirement plan, such as a 401(k) plan, the RR should disclose all applicable tax treatment and the effect of a variable annuity in a qualified plan.

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10. Within one business day following the date of execution of the annuity application, a GSP must review and approve each variable annuity transaction. Items to review shall include (1) client’s age or liquidity needs that may make a long-term investment inappropriate; (2) the amount of money being invested as compared to the client’s stated net worth; (3) if the transaction is an exchange or replacement of another variable annuity contract; (4) if the client’s account has a particularly high rate of annuity exchanges or replacements; (5) the RR has a particularly high rate of annuity exchanges or replacements; (6) the purchase of the variable annuity is fir a tax-qualified retirement account; and (7) the overall suitability of the annuity contract and the sub-account investment selections. 11. Within one business day following the date of execution of the annuity application, a GSP must review and approve a separate exchange or replacement document if the variable annuity is an exchange or replacement of another variable annuity. 12. On an ongoing as needed basis, and in accordance with BCGS’ firm element training program, BCGS shall provide RR’s and GSP’s with adequate training and resources to ensure compliance with BCGS’ and NASD regulations and annuity features and suitability. 8.5. Privacy Policy and Opt Out Notification The firm’s Privacy Policy and opt out notification statement is posted on the firm’s website, www.bcgsecurities.com and can be accessed freely by the public. Additionally, all new customer account holders will receive a printed copy of the statement within 30 days of their account being opened. The firm also mails each clients a copy of the statement on an annual basis.

9. Investment Company Securities

9.1. Suitability

I. Mutual Funds With Contingent Deferred Sales Charges

1. No RR shall offer or sell mutual funds if:

(A) The investment company has a deferred sales charge paid upon redemption that declines over the period of a shareholder's investment ("contingent deferred sales load"), unless the contingent deferred sales load is calculated as if the shares or amounts representing shares not subject to the load are redeemed first, and other shares or amounts representing shares are then redeemed in the order purchased, provided that another order of redemption may be used if such order would result in the redeeming shareholder paying a lower contingent deferred sales load; or (B) The investment company has a deferred sales charge imposed on shares, or amounts representing shares, that are purchased through the reinvestment of dividends, unless the registration statement registering the investment company's securities under the Securities Act of 1933 became effective prior to April 1, 2000.

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2. In addition to the requirements for disclosure on written confirmations of transactions, if the transaction involves the purchase of shares of a mutual fund that imposes a deferred sales charge on redemption, such written confirmation shall also include the following legend: "On selling your shares, you may pay a sales charge. For the charge and other fees, see the prospectus." The legend shall appear on the front of a confirmation and in, at least, 8-point type. 3. Sales of all mutual funds with contingent deferred sales charges shall be reviewed by a Principal of BCGS for compliance with these rules as well as the other rules in this section 8.5 pertaining to the sale of mutual funds. 3. No RR shall, either orally or in writing, describe a mutual fund as being "no load" or as having "no sales charge" if the mutual fund has a front-end or deferred sales charge or whose total charges against net assets to provide for sales related expenses and/or service fees exceed .25 of 1% of average net assets per annum. 9.2. All RR’s shall comply with the general requirements of Section 2210 of the Rules of Conduct in offering investment company shares for sale. In addition, customers shall be advised of all costs involved in switching fund shares, including any deferred sales charges. All confirmations shall contain the legend required by Section 2830(n) of the Rules of Conduct. No RR shall state or imply that the purchase of investment company shares shortly before an ex-dividend date is advantageous to the purchaser, unless there are specific, clearly described advantages to the purchaser. Further, no RR shall state that the distributions of long-term capital gains by an investment company are or should be viewed as part of the income yield from an investment in such company’s securities. No RR shall withhold placing customer orders for investment company shares so as to profit himself as a result of such withholding. Prior to the sale of any investment company shares to a new customer, the RR shall obtain from the customer information similar to that required for New Accounts as stated in this Manual. A “New Account” form shall be available for this purpose. The information obtained shall be used by the RR in evaluating the suitability of the investment for the customer. The following additional specific rules apply:

1. BCGS has a Mutual Fund Proposal approved by the NASD. This proposal is the only sales literature approved for distribution to clients. A PROSPECTUS MUST ACCOMPANY THE PROPOSAL OR ANY CORRESPONDENCE TO CLIENTS REGARDING MUTUAL FUND

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SALES. Language pertaining to the past performance of a fund must be included in all written and verbal communication to a client.

2. The investor will be advised of and receive full disclosure of any sales charge whether front or rear load. Clients will also be given the full benefit of any breakpoint.

3. Investors will be advised that past performance of a fund is not an indication of future results.

4. Funds will be chosen from the BCGS approved list of products in accordance with the investors Investment Objective and the suitability of the fund for the investor.

5. An investor who wishes to invest in funds not included in BCGS’ approved list of funds is permitted to do so, and such activity must be duly noted in the RR's day-timer and the client file.

9.3. No-load Investment Company Shares

1. In instances where a client requests the execution of no-load mutual fund trades in an account, and an administrative fee is due to BCG Securities. Inc., the following conditions must be met:

(a) The prospectus must disclose that a fee may be charged if

purchased through a brokerage firm or financial institution; (b) The prospectus must state that if the shares are purchased directly

through the fund and a broker’s assistance is not solicited, there will be no charge;

(c) Prior to executing the trade, the representative must supply the

client written notification that the shares can be purchased directly from the fund for no additional cost; and

(d) A copy of the prospectus page stating items (a) and (b) and a copy

of the approved written notification to the client noted in item (c) must be attached to the mutual fund application, initialed by the Branch Manger and retained in the client file. Prior to executing the trade, the trade tickets will be initialed and a notation made by the Branch Manager that all conditions have been met, and that the trade is in compliance with Section 2830 of the NASD Rules of Conduct.

2. Charges may be applied in accordance with the following schedule

when all of the above have been met:

Principal Amount of Transaction Allowable Fee

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Up to $3,000 $12.00 plus .8% of principal transaction amount

$3,001 to $7,000 $24.00 plus .4% of principal transaction

amount $7,001 to $56,000 and beyond $38.00 plus .2% of principal transaction

amount with a maximum fee of $150.00 for transactions of $56,000 or more

9.4. Mutual Fund Breakpoints IM-2830-1 of the NASD Rules of Conduct regarding Investment Company Securities requires that clients be given the full benefit of the breakpoint of mutual fund purchases. BCGS has become very active in the sales of mutual funds and has instituted the following procedures to ensure compliance:

A. Establishing Accounts:

1. New purchases through the fund require a completed application. Verify if client has existing account within the family. If so, note the existing account number to insure that accounts are linked for cumulative discount.

2. New purchases through Pershing. If client has an existing account, note the account number on the order ticket so the trader can be advised of the number for cumulative discount purchases.

B. Existing Accounts:

1. Subsequent purchases through the fund require the account number on

the face of the investment check. Upon receipt of the commission, the administrative assistant checks the commission statement to ensure the client received the appropriate breakpoint.

2. Subsequent purchases through Pershing require that BCGS advise

Pershing of the cumulative discount link account number and the commission percentage the client is entitled to under the cumulative discount program.

3. It is the responsibility of the RR to provide the correct mutual fund

cumulative discount information. BCGS' administrative assistant prepares a schedule of commission breakpoints per account and commission statements that are verified upon receipt.

C. Letters of Intent

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1. New accounts where a client anticipated purchasing amounts sufficient to reach a breakpoint require letters of intent. This permits the client to receive the breakpoint on all purchases during the initial 13-month accumulation period in anticipation of reaching the breakpoint during that time.

2. Clients that reach a breakpoint within 90 days of first purchase are entitled to an adjustment to their account to equal shares equivalent to that of a letter of intent from the time the first purchase was made. The representative and BCGS will return commission earned to the fund to adjust the account.

9.5. Morningstar Reviews

Information obtained from Morningstar or other ranking entities must only be used in accordance with IM-2210-3. In general, an investment company ranking must disclose the following information:

1. The name of the ranking entity. 2. The name of the category (e.g., growth) 3. The number of investment companies in the category. 4. The period for which the ranking applies. 5. The criteria on which the ranking is based. 6. If the investment company assesses a front-end sales charge, whether the

ranking takes the sales charges into account. 7. If the ranking is based on total return or current SEC standardized yield,

whether fees have been waived or expenses advanced during the ranking period. If so, whether the waiver or advancement had a material effect on the return or yield for that period.

8. If the ranking consists of a symbol, the meaning of the symbols. 9. That past performance is no guarantee of future results

9.6. Class A, B and C Mutual Fund Shares (amended January 1, 2005)

A customer who purchases investment company shares may be entitled to certain benefits and may incur certain sales charges depending on the class of shares purchased and the amount of the purchase. It is imperative that the customer be informed of the class of shares that may be most beneficial to the customer depending upon the individual customer’s investment objectives and anticipated holding period. Breakpoint purchases and letter of intent purchases must also be taken into consideration by the RR. To assist in this process, the following steps should be taken for each trade order, or series of trade orders of mutual fund shares.

1. The RR must inform the customer of the benefits and detriments associated with Class A, B, and C shares, as they relate to the customer, including breakpoints, contingent deferred sales charges (CDSC), and 12b-1 fees.

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2. The RR must only recommend the class or classes of shares that would be most beneficial to the customer. In making that determination, the commission costs and other share expenses are factors, but they are not the only factors.

3. The RR must complete and sign the firm’s mutual fund share class disclosure form. This form must be signed by the client or the client’s representative and submitted to BCGS along with the order ticket for the sale.

4. The Branch Manager shall review each order ticket and the disclosure form to assist in determining the appropriateness of the share class purchase.

Additionally, other compliance forms may be required by BCGS to be submitted with the account application and/or trade ticket to help show that proper disclosure and suitability analysis was discussed with the client.

9.7. Switching

Fund Switching. Except for the provisions pertaining to new account information, the rules of this section 8.5 apply when clients are redeeming one mutual fund and purchasing another. In addition to the suitability, prospectus delivery, and disclosure requirements governing such recommendations, no RR may exercise discretion in a customer's account without obtaining prior written authorization from the customer. Thus, the lack of an affirmative response to a recommendation to change mutual funds would preclude the automatic exchange of shares unless BCGS has on file prior written authorization from the customer permitting BCGS to exercise discretion in the account. The affirmative response or prior written authorization shall be kept in the customer’s file. Additionally, the client and the RR shall sign a letter authorizing the switch. A copy of this letter shall be kept in the client’s file. 9.8. Redemptions

Redemptions BCGS shall not redeem shares of any mutual fund for its own account unless it is a party to a sales agreement with a principal underwriter of the mutual fund or the redemption is compulsory pursuant to the terms of the security. BCGS may redeem shares of mutual funds to the issuer or underwriter for the account of their record owner at the bid price next quoted by or for the issuer and charging the customer a reasonable charge for handling the transaction, provided that the RR discloses to such record owner that direct redemption of the security can be accomplished by the record owner without incurring such charges. The RR shall verify to his supervising Principal in writing that this disclosure has been provided in any instance where a charge is imposed by BCGS for handling the transaction.

10. Direct Participation Programs

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In accordance with revisions to net capital requirements established January 1993, BCGS is not permitted to participate in Direct Participation Programs unless it is on a best efforts basis. BCGS does not presently use DPP in its product mix. Therefore, prior GSP approval would be required to offer this program. 10.1. Equities, Corporate Bonds, Limited Partnerships

A. As with all investments, a diverse mix of equities, corporate bonds and limited partnerships should be chosen for the portfolio based upon the prudent investment rule for our Retirement Plan investors. When transacting business on a personal basis be certain the investment fits well with the objectives of the investors. Also, all investments are to be made in conjunction with the signed Investment Objective on file in our office.

B. All equity transactions will be based upon firm quotes. Consider the past

performance, dividends, safety factor and price to earning ratio. C. Corporate Bonds will be investment grade or better.

D. Limited Partnerships are not currently an approved product of BCGS although

positions are held in client accounts due to past transactions. Partnerships may be submitted to the Branch Manager for review and consideration. For each new offering received in the office a fact sheet will be prepared considering safety, prudence, composition of investments within the partnership, past performances in other partnerships, rate of return and liquidity factors. At least all of the above considerations must be meet in any investments within BCGS.

It should be the objective of each RR within BCGS to uphold our high standards of quality and performance within our investors’ portfolios. All investments are to be made in the best interest of our investors and in conjunction with any Investment Objectives on file. All trades shall be executed in accordance with those rules set forth in the guidelines of the Municipal Security Rulemaking Board, where applicable, and National Association of Securities Dealers, Inc. All trades are to be reviewed by a GSP. 11. Low Priced Securities SEC Regulation 240. 15g-9 is designed to prevent fraudulent, deceptive or manipulative acts or practices with regard to low priced securities. Exempt transactions include:

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A. Securities in which the price of the security is two dollars ($2.00) or more. However, if the designated security is composed of one or more securities, the unit price divided by the number of components of the unit other than warrants, options, rights, or similar securities must be five dollars or more. In addition, any component of the unit that is a warrant, option, right, or similar security, or a convertible security must have an exercise price or conversion price of five dollars or more.

B. Transaction in which the purchase is an accredited investor or established

customer of BCGS. C. Transactions that are not recommended by BCGS. D. Transactions by a broker-dealer whose commission income from penny stocks is

five percent or less of its total commissions, in accordance with SEC Regulation, Section 240.15g-1(a).

Transactions in low priced securities not meeting any of the above exemptions are to be effected in accordance with the following regulations:

A. Prior to the transaction, BCGS has approved the investor’s account for transactions in designated securities by obtaining information regarding the investor’s financial situation, investment experience and investment objectives. It has been reasonably determined that the transactions are suitable, and the investor had sufficient knowledge and experience in financial matters and that the investor is reasonably capable of evaluating the risk of transactions in the designated securities.

B. A written statement must be delivered to the person, in highlighted format, to the

effect that it is unlawful for the broker or dealer to effect a transaction in a designated security subject to the provisions of paragraph 2(a) of Regulation section 240.15c2-6, unless the broker or dealer has received, prior to the transaction, a written agreement to the transaction from the investor. The content of the written agreement will include, in a highlighted format immediately preceding the signature line, a statement that the broker or dealer is required to provide the investor with the written statement and the investor should not sign and return the statement unless he agrees that his financial situation, investment experience, and objectives have been properly represented.

12. Mark-Up Policy & Fair Pricing Rules of the NASD and MSRB prohibit excessive mark-ups. BCGS does not act as a broker in equity securities. Commissions are charged in accordance with the Pershing commission schedule. Mark-ups on equities are not permitted to exceed 5% Mark-ups on fixed income products are expected to be lesser than that of equity securities.

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SEC release 243-68 dictates that the mark-ups on debt securities, including municipal securities, may not exceed 3 points. If mark-up exceeds 3 points, prior written approval must exist on file from a GSP. Such approval will be obtained by submitting in writing the reasons for the mark-up. All correspondence relating to the transaction will be maintained in the compliance file. Mark-up on bonds will be based on the dealer's cost for the bonds. Cost is defined as BCGS’ contemporaneous cost of acquiring the securities. All transactions made by RR’s shall be reviewed on a daily basis by a designated GSP of the firm by reviewing a daily trade ticket report, trade blotter report, and/or trade confirmations. Any transactions that appear to have an unusually high commission or fee rate shall be examined on an individual basis by a GSP. If further information is requested, the GSP shall contact the RR for additional information. 13. Gift, Gratuities & Non-Cash Compensation Neither BCGS nor any RR associated with BCGS shall, directly or indirectly, give or permit to be given anything of value, including gratuities, in excess of $100.00 per individual per year to any person, principal, proprietor, employee, agent or representative of another person where such payment or gratuity is in relation to the business of the employer of the recipient of the payment or gratuity. A gift of any kind is considered a gratuity.

Notwithstanding the forgoing, this rule shall not apply to contracts of employment with or to compensation for services rendered by persons enumerated in above provided that there is in existence prior to the time of employment or before the services are rendered, a written agreement between the member and the person who is to be employed to perform such services. Such agreement shall include the nature of the proposed employment, the amount of the proposed compensation, and the written consent of such person's employer or principal.

BCGS shall maintain a separate record of all payments or gratuities in any amount known to BCGS, the employment agreement, and any employment compensation paid as a result thereof shall be retained by BCGS for a three year period. This written record will be prepared by a General Securities Principal associated with BCGS and shall be updated upon each occurrence. If a RR receives a gift or gratuity in excess of over $100.00, such gift or gratuity must be immediately returned or declined.

This rule will be a component of the BCGS Quarterly Compliance Questionnaire that each RR is required to complete on a quarterly basis. A an answer indicating a violation of this rule will be investigated by a Principal 14. Prohibition Against Guarantees Neither BCGS nor any RR associated with BCGS shall make a guarantee, written or orally, to a customer against loss in connection with any securities transaction or in any

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securities account of such customer. Furthermore, no guarantee shall be made or offered to guarantee a customer against loss in an account carried or introduced by BCGS in which municipal securities are held or for which municipal securities are purchased, sold, or exchanged, or in a transaction in municipal securities with or for a customer. This rule will be a component of the BCGS Quarterly Compliance Questionnaire that each RR is required to complete on a quarterly basis. An answer indicating a violation of this rule will be investigated by a Principal.

15. Annual Review A General Securities Principal shall review each producing RR not less than once annually. If during the course of the year red flags or disciplinary problems arise, they will be addressed in writing and require a formal meeting. The results of the meeting and the written correspondence will then become part of the annual review. This review shall include but not be limited to:

Review of customer accounts for excessive trading; Excessive mark-ups; Investing in accordance with customer investment objectives; Timely completion of tickets; Adherence to in-house procedure, day-timers, products offered, attendance at sales meetings; Compliance with rules and regulations; and Providing representatives with a listing of their states or registration so they can at that time expand their registration area.

The review will ensure the RR’s compliance with all regulations particular to the RR’s activities. This review is in addition to daily supervision of the RR’s daily activities, compliance and questionnaires that must be completed by all RR’s. A memorandum or statement will be signed by each party attending the review and shall be kept by the firm’s compliance officer.

16. Continuing Education The Officers of BCGS shall be responsible for implementing and maintaining a continuing education program designed to satisfy the requirements of Section 1120(b) of the Rules of Conduct. This includes developing a written training plan after evaluating and prioritizing BCGS’ training needs, and administering the program in accordance with that program. All RR’s involved in the sale of securities shall be required to participate in the continuing

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education program. An RR who does not actively sell securities, such as back-office personnel, shall be exempt from the CE requirements. RR’s are responsible for satisfying the Regulatory Element of the continuing education rules contained in Section 1120(a) of the Rules of Conduct. Proof of attendance at any educational program intended to satisfy the Regulatory Element must be submitted to a GSP or a delegate on such form as required by a GSP. Any RR who fails to comply with the Regulatory Element is prohibited from conducting any activities requiring registration, and shall cease all duties and functions in any capacity requiring registration. A GSP or a delegate shall notify each RR of his continuing education status, and shall monitor the RR’s progress in satisfying the Regulatory Element.

17. New Accounts (amended August 23, 2004) Section 3110(c) of the NASD Rules of Conduct and BCGS’ Anti-Money Laundering (AML) program require the following information to be obtained at the time a new account is established:

1. Name, residence address (and mailing address if different) and date of birth. If not a natural person, principal place of business (and mailing address if different);

2. The signature of the account manager introducing the account and the signature

of a GSP;

3. Indication if the account is that of a person associated with another firm;

4. Tax Identification or Social Security Number;

5. Occupation;

6. A copy of an acceptable form if identification such as a driver’s license, passport or other government issued picture identification. If a copy of the identification is not provided, an electronic confirmation report must be generated from an acceptable financial services company. BCGS will submit the number to the financial services company (such as Equifax, Thompson, or Experion) for identification verification. The computer generated report will be kept in the client’s file along with BCGS’ AML Supplemental Customer Information Statement;

7. If the customer is a corporation, partnership, trust or other legal entity, the names

of any persons authorized to transact business on behalf of the entity, and for a trust the authorized activity. A copy of the certificate of incorporation, business license, partnership agreement or trust agreement may be required;

8. The customer’s net worth and annual income;

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9. The customer’s investment objectives and experience;

10. The names of all authorized persons on the account;

11. If the account owner is a non-resident alien, his current passport number or other valid government identification number and all necessary U.S. tax forms; and

12. Whether the customer is an associated person of another broker-dealer.

In accordance with BCGS’ AML procedures, all new customers must be checked by a designated member of the operations staff to assure the customer’s name does not appear on the list of terrorists or other “Specially Designated Nationals and Blocked Persons.” BCGS requires, in addition to the minimum information required by NASD, that the RR be registered in the state of sale. Also, if the account was transferred in, it must be determined where the account came from and the nature of the initial transaction. BCGS generally does not participate in discretionary account activity. Such activity is subject to specific guidelines as set forth in Section 3110(c)(3) of the Rules of Conduct. The management of BCGS must approve discretionary account activity prior to effecting transactions in the account, as well as establish guidelines for the activity. The following information will be required:

1. The signature of each person authorized to exercise discretion on the account; and

2. The date discretion was granted. A discretionary account is defined as any account in which an officer or account manager is vested with discretionary power. Each discretionary account must have a formal agreement on file. Accounts for foreign entities, offshore trusts or other types of relationships not specifically discussed above may not be opened or maintained without the express approval of a GSP. Such approval may be granted only if such additional account information is obtained to satisfy NASD rules and BCGS’ anti money laundering program. The foregoing information must be obtained for all new accounts, whether opened through BCGS clearing firm or directly with a mutual fund company. All new account information will be reflected on the appropriate new account forms. All new account forms will be reviewed by a GSP for customer suitability and for compliance with BCGS’ Anti-Money Laundering Program. This review will be made no later than 3 business days after the account is opened. A GSP will initial each New Account form to indicate it has been reviewed. 18. Anti- Money Laundering Program (amended March 30, 2005 and July 2006)

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18.1 Establishment of Program. BCGS hereby establishes an AML program that is intended to satisfy the requirements of Section 352 of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the Patriot Act). A GSP is the person responsible for administering the program and may delegate his responsibilities to a person or persons named by him. It is the policy of BCGS to take all reasonable steps to prevent clients from engaging in money laundering activities and any activity that funds terrorism. Adam Paglione is responsible for the firm’s AML compliance program. 18.2 Types of Deposits. Section 15 prohibits BCGS from accepting any cash or other assets. In addition, any employee or RR who becomes aware that a customer has deposited funds with Pershing using traveler’s checks, money orders, cashier’s checks or bear bonds, should report that information to a GSP immediately. It is illegal to structure deposits to attempt to avoid the cash reporting requirements of $10,000 or more by a client. If any customer spreads deposits of $10,000 or more over one or several days or over several accounts, that activity should be reported to a GSP. In addition, the customer should be asked to provide a written explanation of his or her reasons for dividing the deposits. 18. 3 Suspicious Activity. Employees and RR’s must be alert for suspicious activity that may signal possible money laundering activity. Suspicious activity can occur at the outset of the client relationship or long after the relationship is initiated. Suspicious activity must be reported promptly to a GSP to determine if a report needs to be filed with the appropriate authorities. A report must be filed if the activity involves at least $5,000. The following is a non-exhaustive list of potential indicators of suspicious activity: Indicators at the Account Opening Stage:

customer exhibits an unusual concern regarding BCGS’ compliance with government reporting requirements, particularly with respect to his or her identity, type of business and assets, or is reluctant or refuses to reveal any information concerning business activities, or furnishes unusual or suspect identification or business documents;

customer wishes to engage in transactions that lack business sense,

apparent investment strategy, or are inconsistent with the customer's stated business/strategy;

• the information provided by the customer that identifies a legitimate source

for funds is false, misleading, or substantially incorrect; upon request, the customer refuses to identify or fails to indicate any

legitimate source for his or her funds and other assets;

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customer (or a person publicly associated with the customer) has a questionable background or is the subject of news reports indicating possible criminal, civil or regulatory violations;

the customer is from or has accounts in, a country identified as a non-

cooperative country or territory by the Financial Action Task Force (FATF)

customer appears to be acting as the agent for another entity but declines, evades or is reluctant, without legitimate commercial reasons, to provide any information in response to questions about that entity; and

customer has difficulty describing the nature of his or her business or lacks

general knowledge of his or her industry.

Indicators Related to Account Activity:

• customer attempts to make frequent or large deposits of currency, insists on dealing only in cash equivalents or asks for exemptions to BCGS’ policies relating to the deposit of cash and cash equivalents;

• customer engages in transactions involving cash over $ 10,000 or cash

equivalents or other monetary instruments that appear to be structured to avoid government reporting requirements, especially if the monetary instruments are in an amount just below reporting or recording thresholds and/or are sequentially numbered;

• A customer engages in multiple transfers of funds or wire transfers to and

from countries that are considered bank secrecy or "tax havens" that have no apparent business purpose or are to or from countries listed as non-cooperative by FATF and FinCEN, or are otherwise considered by BCGS to be high-risk;

• A customer's account has unexplained or sudden extensive wire activity,

where previously there had been little or no wire activity without any apparent business purpose;

• A customer makes a funds deposit followed by an immediate request that

the money be wired out or transferred to a third party, or to another firm without any apparent business purpose;

• A customer uses multiple private banking accounts to facilitate securities

transactions;

• A customer makes a funds deposit, for the purpose of purchasing a long-term investment, followed shortly thereafter by a request to liquidate the position and a transfer of the proceeds out of the account;

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• For no apparent reason, a customer has multiple accounts under a single

name or multiple names, with a large number of inter-account or third-party transfers;

• A customer engages in excessive journal entries between unrelated

accounts without any apparent business purpose;

• A customer requests that a transaction be processed in such a manner so as to avoid BCGS’ normal documentation requirements;

• The customer’s account shows an unexplained high level of account

activity with very low levels of securities transactions

• A customer engages in transactions involving certain types of securities, such as penny stocks, Regulation "S" stocks and bearer bonds, which, although legitimate, have been utilized in connection with fraudulent schemes and money laundering activity;

• A customer deposits bearer bonds followed by immediate request for the

disbursement of funds; and

• A customer exhibits a total lack of concern regarding risks, commissions, or other transaction costs.

Adam Paglione shall direct a designate at BCGS to investigate all suspicious activity, and to determine if a report of the activity to the governing authorities is appropriate. If a report is required to be filed, it shall be filed on Form SAR-SF (or such other form as may be designated by the Treasury Department) within 30 days of the detection of the suspicious activity. BCGS will maintain copies of all documentation, records and communications regarding a suspicious transaction. In addition to filing the required report, the suspicious activity should be reported to the FinCen’s Financial Institution Hotline at 866-556-3974. Situations requiring immediate attention should be brought to the attention of an appropriate law enforcement authority. 18.4 Training. A GSP shall conduct such training as may be necessary so that all personnel are familiar with BCGS’ anti-money laundering policies and procedures. Both in-house operations staff and RR’s must participate in the firm’s AML training program. A GSP may designate specific employees to receive more intensive training in order that they may carry out their duties under this program. 18.5 Audit Program. BCGS shall periodically (but no less frequently than annually) audit this program to assure that its anti-money laundering procedures are being carried out effectively. Unless a GSP designates and retains an outside auditor, internal personnel who are not directly involved in carrying out the program shall conduct the audit. The

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results of the audit shall be memorialized in a written memoranda. Adam Paglione shall be responsible for ensuring the completion of the audit program and nominating an independent person to conduct such audit. On an annual basis, the results of the audit shall be placed in a written memorandum and submitted to the firm’s Executive Officer. 18.6 Customer Identification. All new accounts opened through BCGS must be properly identified in accordance NASD Rules 2110 (Standards of Commercial Honor and Principles of Trade), 2310 (Recommendations to Customers - Suitability), and 3110 (Books and Records), and SEC Rules 17a-3(a)(9) (Beneficial Ownership regarding Cash and Margin Accounts) and 17a-3(a)(17) (Customer Accounts). BCGS has established, documented, and maintained a written Customer Identification Program (or CIP). BCGS will collect certain minimum customer identification information from each customer who opens an account; utilize risk-based measures to verify the identity of each customer who opens an account; record customer identification information and the verification methods and results; provide notice to customers that we will seek identification information and compare customer identification information with government-provided lists of suspected terrorists. 18.6.1 Required Customer Information. Prior to opening an account, we will collect the following information for all accounts, if applicable, for any person, entity or organization who is opening a new account and whose name is on the account: the name; date of birth (for an individual); an address, which will be a residential or business street address (for an individual), an Army Post Office ("APO") or Fleet Post Office ("FPO") number, or residential or business street address of next of kin or another contact individual (for an individual who does not have a residential or business street address), or a principal place of business, local office or other physical location (for a person other than an individual); an identification number, which will be a taxpayer identification number (for U.S. persons) or one or more of the following: a taxpayer identification number, passport number and country of issuance, drivers license number, social security number, alien identification card number or number and country of issuance of any other government-issued document evidencing nationality or residence and bearing a photograph or other similar safeguard (for non-U.S. persons). In the event that a customer has applied for, but has not received, a taxpayer identification number, we will use alternative documentation to confirm that the application was filed before the customer opens the account and to obtain the taxpayer identification number within a reasonable period of time after the account is opened. When opening an account for a foreign business or enterprise that does not have an identification number, we will request alternative government-issued documentation certifying the existence of the business or enterprise. 18.6.2 Customers Who Refuse to Provide Information. If a potential or existing customer either refuses to provide the information described above when requested, or appears to have intentionally provided misleading information, our firm will not open a new account and, after considering the risks involved, consider closing any existing account. In either case, our AML Compliance Officer, Adam J. Paglione, will be notified so that we can determine whether we should report the situation to FinCEN (i.e., file a Form SAR-SF).

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18.6.3 Verifying Information. Based on the risk, and to the extent reasonable and practicable, we will ensure that we have a reasonable belief that we know the true identity of our customers by using risk-based procedures to verify and document the accuracy of the information we get about our customers. In verifying customer identity, we will analyze any logical inconsistencies in the information we obtain. We will verify customer identity through documentary evidence, non-documentary evidence, or both. We will use documents to verify customer identity when appropriate documents are available. In light of the increased instances of identity fraud, we will supplement the use of documentary evidence by using the non-documentary means described below whenever possible. We may also use such non-documentary means, after using documentary evidence, if we are still uncertain about whether we know the true identity of the customer. In analyzing the verification information, we will consider whether there is a logical consistency among the identifying information provided, such as the customer’s name, street address, zip code, telephone number (if provided), date of birth, and social security number. Appropriate documents for verifying the identity of customers include, but are not limited to, the following:

• For an individual, an unexpired government-issued identification evidencing nationality, residence, and bearing a photograph or similar safeguard, such as a driver’s license or passport or an electronic identity verification service. If an outside verification service is used, a printed report will be generated and placed in the client’s file. Any fees associated with using an electronic verification service will be paid by BCGS or the corresponding branch office.

• For a person other than an individual, documents showing the existence of the entity, such as certified articles of incorporation, a government-issued business license, a partnership agreement, or a trust instrument.

BCGS understands that we are not required to take steps to determine whether the document that the customer has provided to us for identity verification has been validly issued and that we may rely on a government-issued identification as verification of a customer’s identity. If, however, we note that the document shows some obvious form of fraud, we must consider that factor in determining whether we can form a reasonable belief that we know the customer’s true identity. We will use the following non-documentary methods of verifying identity:

• Contacting a customer; • Independently verifying the customer’s identity through the comparison of information

provided by the customer with information obtained from a consumer reporting agency, public database, or other source;

• Checking references with other financial institutions; or • Obtaining a financial statement.

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We will use non-documentary methods of verification in the following situations: (1) when the customer is unable to present an unexpired government-issued identification document with a photograph or other similar safeguard; (2) when the firm is unfamiliar with the documents the customer presents for identification verification; (3) when the customer and firm do not have face-to-face contact; and (4) when there are other circumstances that increase the risk that the firm will be unable to verify the true identity of the customer through documentary means. We will verify the information within a reasonable time before or after the account is opened. Depending on the nature of the account and requested transactions, we may refuse to complete a transaction before we have verified the information, or in some instances when we need more time, we may, pending verification, restrict the types of transactions or dollar amount of transactions. If we find suspicious information that indicates possible money laundering or terrorist financing activity, we will, after internal consultation with the firm's AML compliance officer, file a SAR-SF in accordance with applicable law and regulation. We recognize that the risk that we may not know the customer’s true identity may be heightened for certain types of accounts, such as an account opened in the name of a corporation, partnership or trust that is created or conducts substantial business in a jurisdiction that has been designated by the U.S. as a primary money laundering concern or has been designated as non-cooperative by an international body. We will identify customers that pose a heightened risk of not being properly identified. Therefore, we will take the following additional measures that may be used to obtain information about the identity of the individuals associated with the customer when standard documentary methods prove to be insufficient: 18.6.4 Lack of Verification. When we cannot form a reasonable belief that we know the true identity of a customer, we will do the following: (A) not open an account; (B) impose terms under which a customer may conduct transactions while we attempt to verify the customer’s identity; (C) close an account after attempts to verify customer’s identity fail; and (D) file a SAR-SF in accordance with applicable law and regulation. 18.6.5 Recordkeeping. We will document our verification, including all identifying

information provided by a customer, the methods used and results of verification, and the resolution of any discrepancy in the identifying information. We will keep records containing a description of any document that we relied on to verify a customer’s identity, noting the type of document, any identification number contained in the document, the place of issuance, and if any, the date of issuance and expiration date. With respect to non-documentary verification, we will retain documents that describe the methods and the results of any measures we took to verify the identity of a customer. We will maintain records of all identification information for five years after the account has been closed; we will retain records made about verification of the customer's identity for five years after the record is made.

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18.6.6 Comparison with Government Provided Lists of Terrorists and Other Criminals. From time to time, we may receive notice that a Federal government agency has issued a list of known or suspected terrorists. Within a reasonable period of time after an account is opened (or earlier, if required by another Federal law or regulation or Federal directive issued in connection with an applicable list), we will determine whether a customer appears on any such list of known or suspected terrorists or terrorist organizations issued by any Federal government agency and designated as such by Treasury in consultation with the Federal functional regulators. We will follow all Federal directives issued in connection with such lists. We will continue to comply with Treasury’s Office of Foreign Asset Control rules prohibiting transactions with certain foreign countries or their nationals.

18.6.7 Notice to Customers. We will provide notice to customers that the firm is requesting information from them to verify their identities, as required by Federal law. We will notify each customer either orally or in writing before the account is opened or the verification process is conducted.

19. Regulation T A GSP is responsible for BCGS’ compliance with Regulation T of the Federal Reserve Board. When an extension is required, it will be charged to the representative initiating the transaction.

20. Trade Execution A GSP is responsible for trade executions to be completed in the best available market, to the customer’s advantage, and that the NASD mark-up policy is followed. Any deviations from this policy will be reported to BCGS’ officers. The RR retains responsibility for providing accurate ticket data. 21. Guidelines for Best Execution As an introducing broker, BCGS relies on it’s clearing firm, Pershing, LLC, for quality execution services. All order routing of equity transactions is directed through Pershing, relying on its best execution review in determining the best available market or venue to route client orders. A GSP or his designate shall further perform a quarterly random sampling of client files to ensure the client has received the best execution price. This review will be evidenced by a memorandum.

22. BCGS Net Capital/Handling Funds and Securities

As a fully disclosed broker/dealer, BCG Securities Inc. is required to maintain a minimum net capital of $5,000.00 with a ratio of aggregate indebtedness not to exceed 15:1. Either Robert Paglione or the Financial Operations Principal will advise BCGS’ officers immediately in the event BCGS’ capital position becomes jeopardized under the net capital

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rule. The company's balance sheet profit and loss statement will be reviewed monthly by the President and Treasurer, and periodically by BCGS’ officers. In accordance with Rule 15c3-c, BCGS is not permitted to receive customer securities regardless of registration nor is BCGS permitted to receive checks made payable directly to BCGS. As a fully-disclosed broker-dealer conducting business in accordance with this regulation, BCGS will maintain a minimum net capital requirement status of $5,000.00. Representatives shall be advised of the following by memorandum, a signed copy of which shall be maintained on file:

Receipt of securities at BCGS’ office is prohibited. Representatives will instruct clients to forward securities directly to their Pershing accounts. Securities received at BCGS may generate a letter to the customer advising them that in accordance with NASD rule 15 c3-3, BCGS is not permitted to receive customer securities.

The above procedure will be reiterated in written correspondence to the client, and a copy shall be maintained in the compliance file and customer file. It has never been the policy of BCGS to request checks be made payable to BCGS. However, in light of new regulations it has become increasingly urgent that checks not be made payable to BCGS. The clearing firm has revised its confirmation instructing clients to send payment directly to Pershing. Representatives will follow current procedures by instructing clients to make checks payable to the appropriate mutual fund, Clearing Firm or other service provider. Clients sending check payable to BCGS will receive written notification of Rule 15c3-3. A copy will be retained in the Compliance File and customer file.

23. Transaction Review A General Securities Principal shall at the end of each business day review and initial all trades executed through BCGS, and will review with BCGS’ officers any transaction that is deemed unjustified. At that time a GSP is empowered to cancel or adjust a trade that is found to be unreasonable. Attention will be given to but not limited to the following:

a. Unusual or sizable transactions, including evidence of suspicious activity as set forth in Section 1.26.3; b. Transactions for employees or their immediate family;

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c. Purchase of unfamiliar or low price securities; d. NASD mark-up policy; e. Evidence of free riding or withholding; f. Trading against BCGS’ recommendation; g. Compliance with BCGS list of approved products; h. The Mutual Fund share class being purchased, including the receipt of breakpoints; and

i. evidence of churning or unusual transactions. At completion of each trade, tickets will be placed on the Beta Quotes table. At receipt of morning reports, a securities administrator will verify all tickets against the report. Next, the administrator checks the customer’s account for all sell orders to ensure that proper securities and amounts have been sold. If everything is in order, a report is sent to a GSP for final verification and the report is filed in date order for blotter retention. If any errors exist, the information is sent immediately to a GSP who shall take appropriate action to correct the error. If no GSP is available to review trade tickets, the tickets will be held for review until the next business day. Churning of a customers account as a means to increase transaction fees and/or commissions is a prohibited act. All transactions made by BCGS RR’s are reviewed by a GSP for suitability and fair pricing. Each day a GSP will review a trade ticket report and the firms blotter reports for any unusual activity. If it is determined that a RR may be churning an account or unusual activity is taking place, the RR will be contacted by the firm’s compliance officer to provide additional information as to why such transactions took place. 23.1. Monthly Review of Certain Mutual Fund Transactions At least once a month, a GSP shall review all mutual fund transactions for which no trade ticket was generated. 24. Confirmations

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SEC Regulation, Section 240.10b-10 requires that clients receive at completion, written notification of their transaction. Confirmations will disclose information as required under Section 240.10b-10. Particular to principal transactions in fixed income products, RR’s will complete and submit for billing tickets on the day they are executed. There are no exemptions from this provision. The administrative assistant will bill the tickets on the trade date.

25. Monthly Customer Statements A GSP will review customer statements periodically but at least annually. At the GSP’s discretion, certain accounts may be marked for more frequent review due to excessive trading or employee trading.

26. Riskless Trading Account The Branch Manager has maintained ongoing procedural updates to this account. The procedures for the account are as follows:

FinOp developed new trading tickets on December 20, 1991 requiring GSP approval to diminish trading errors in the accounts that require cancellations and rebilling. Tickets are required to be entered on the trade date. An administrative assistant shall forward to a GSP daily an in-house reconciliation sheet which is prepared for each months trade activity. The reconciliation sheet is compared to RICH 6240 each day to ensure the balance is correct. Morning reports are checked against each ticket for verification of entry.

Separate file is maintained of reconciliation sheets and a copy of each ticket.

27. Client Records

27.1 Records Retention Each Representative will maintain the following documents, in hard copy or electronic form:

a. Procedure and compliance manual

b. Confirmations - in client's individual file

c. Monthly statements

27.2 Safeguarding Client Records

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All client records shall be maintained in a manner that safeguards and protects the client information contained therein, including, but not limited to, the following: 1. Access to all client data maintained in BCGS’ computer system shall be restricted by the

use of passwords to those representatives and BCGS personnel that need to view that data in connection with their duties.

2. All current client records maintained in hard copy shall be stored in filing cabinets on the business premises that shall be locked except during normal business hours. Other clients records shall be kept in a locked cabinet or room with access restricted to authorized personnel only. Branch Offices where access to the office is restricted to only authorized personnel need not secure client records in a locked cabinet or room provided the office is secure during non-business hours.

3. Client records to be discarded shall be deposited in secure bins and shall be shredded periodically.

27.3 Books and Records Retention

All books and records shall be maintained at the BCGS office located in Delran, New Jersey, or a local off-site storage location. All records shall be maintained in hard paper format or electronic format via the Web CRD system.

All records shall be kept in an easily accessible place for the first two years, except as otherwise stated, and retained for a period of three or six years, or life of the corporation, as may be required by NASD or SEC.

The books and records to be kept at the BCGS office shall include, but not be limited to the following:

• Order ticket memoranda;

• A listing of each RR, including CRD number and location where that person conducts business;

• Agreements or applicable records pertaining to the compensation and relationship of each RR with BCGS;

• All records and documentation pertaining to customer complaints;

• All customer account records and memoranda, including account application forms and agreements or contracts;

• All documentation, publications, or memoranda pertaining to BCGS firm supervision and compliance procedures;

• All documentation pertaining to communications with the public;

• All BCGS corporate organization documentation, including Articles of Incorporation and By-laws;

• All versions of the BCGS Supervisory & Procedures manual.

I. Electronic Communications:

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All business related electronic communications, such e-mail and instant messaging, outgoing and incoming, shall be retained in an easily accessible place for six years, with the first two being in an easily accessible place.

Outgoing and incoming electronic business related communications will be randomly reviewed on a periodic basis, not less than bi-annually by the Branch Manager General Securities Principal or his designate. Additionally, all RRs will receive training regarding the review and approval of business related communications, and which communications must be immediately reported to a Principal for review. All reviews must be documented and memorialized by the reviewing Principal.

1. Prior to storing any books and/or records in electronic format, a General Securities Principal shall first submit a notice and request for permission to the appropriate SRO.

2. A General Securities Principal or his designate shall be responsible to compliance with all books and records retention regulations.

27.4. Reconciliation of Books and Records The BCGS Operations Manager is responsible for maintaining and documenting any Books and Records requirements regarding SEC Rules 17a-3 and 17a-4. BCGS shall periodically review books and records reconciliation procedures to assure they are being carried out effectively.

28. Municipal Securities 28.1 Customer Accounts In the case of municipal securities transactions, each new client account must be approved by a Designated Municipal Securities Principal and be signed by the qualified securities representative prior to executing the transaction. A completed customer suitability form must be on file for all new municipal securities customers.

28.2 Supervisory Responsibilities Municipal securities transactions will be reviewed by a designated Municipal Securities Principal. The Municipal Securities Principal will then initial municipal trades as evidence of such review.

28.3 Reports of Sales or Purchases Reports of sales or purchases will be reviewed by a designated Municipal Securities Principal. The Municipal Securities Principal will then initial the report as evidence of such review. All reports of sales and purchases will be kept for three years or as required by rule or regulation. 28.4 Municipal Securities Books and Records

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BCGS shall maintain these additional books and records relating to the purchase or sale of Municipal Securities:

• Records of Original Entry (i.e., blotters);

• Account Records;

• Securities Records;

• Subsidiary Records; (a) municipal securities in transfer;

(d) municipal securities transactions not completed on settlement date;

• Records for Agency and Principal Transactions;

• Copies of Confirmations;

• Customer Account Information;

• Customer Complaints;

• Designation of Persons Responsible for Record keeping 28.5 Notice of Material Events

BCGS does not execute any municipal transactions directly with the municipal issuer. Any notice about material events is provided to BCGS by our clearing firm, Pershing, LLC.

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