Qualification

How do I qualify to participate?

You must meet Regal Discount Securities’ pre-qualification requirements prior to participating.

Requirements:

• You must have an existing Regal Discount Securities account that has been open for at least 60 days.
• You must maintain a minimum of $15,000 in liquid equity in your Regal Discount Securities account.
• You must have placed at least one trade in your Regal Discount Securities account within the past 3 years.
• You must not be considered a “Restricted Person” according to FINRA’s governing rules. Please review FINRA Form 5130 for a description of what qualifies as a “Restricted Person”.
• The stated Investment Objective on your Syndicate account must be consistent with the degree of risk placed on each specific offering. For example, if your investment objective is Income and Growth, you will be restricted from participating in Speculative offerings.
• You must open a new Syndicate account with a separate company, Regal Securities, Inc.

Are retirement accounts eligible to participate in new offerings?

Yes, Regal will allow participation in retirement accounts if all of the above referenced pre-qualification requirements are met.

Are there any restrictions for participation based on where I live?

Many new offerings are available to residents of all 50 states. There are occasions when a new-issue will only be eligible within specific states. Regal will communicate this to you as information is released about each new-issue offering.

Types of Offerings

What types of offerings does Regal participate in?

Regal participates in Initial Public Offerings (IPOs), Secondary or Follow-on Offerings, Closed-End Funds, and Preferred Stock offerings. While Regal cannot predict which type of offerings we will participate, many of our offerings are Closed-End Funds

What is a Closed-End Fund?

A Closed-End Fund initially raises a pre-determined amount of capital through an Initial Public Offering (IPO) by issuing a fixed number of shares. Closed-End Fund investments are similar to mutual funds in that they represent an interest in a specialized portfolio of securities that is actively managed by an investment advisor. Typically they concentrate on a specific industry, geographic market, or sector. The stock prices of a closed-end fund fluctuate according to market forces (supply and demand) as well as the changing values of the securities in the fund's holdings. Some of the advantages of investing in Closed-End Funds are:

• Diversification
• Regular distributions (Typically Monthly or Quarterly)
• Potential for higher distribution rates compared to current Money Market or CDs
• Experienced investment management teams
• Liquidity provided through trading on national exchanges
• Potential for capital appreciation

See the Syndicate Glossary for more information and other important definitions.

The most distinguished risk for Closed-End Funds is “No Prior History” risk. These types of funds are newly organized, non-diversified, closed-end management investment companies with no history of operations and are subject to all of the business risks and uncertainties associated with any new business. Participation in any Closed-End Fund may involve many of the common risks associated with any investment. Therefore each prospectus should be studied in detail with special attention given to the following that are representative of those risk factors – Management, liquidity, valuation, leverage, credit ratings, interest rate, Net Asset Value discount/premium, underlying investments such as Structured Products and derivatives, and inflation/deflation risk among others.

Is a Closed-End Fund right for my account?

If you are a self-directed investor seeking diversification and income with liquidity, you may find Closed-End Funds to be a beneficial addition to your portfolio. Due to Closed-End Funds being considered long-term investments, you should conduct careful due diligence when determining if they are appropriate for your portfolio.

Due Diligence

What is a prospectus?

A prospectus is a document that describes the offering terms, the anticipated use of proceeds, the company, its industry, business, management and ownership, and its results of operations and financial condition. Although it is mainly a disclosure document, the prospectus is a crucial part of the due diligence process.

How do I obtain the Preliminary Prospectus or other marketing material?

Due diligence material, such as the preliminary prospectus, will be delivered via email once you have indicated an interest a specific offering.

When will I have access to the Preliminary Prospectus?

Preliminary Prospectuses are available during the Pre-Effective Period. This is the period between the time the issue has been filed with the SEC and the Effective Date.

Is reading the Preliminary Prospectus mandatory?

Yes - You must acknowledge that you have received, read, and understood the Preliminary Prospectus prior to being allowed to submit an Indication of Interest (IOI).

What is the difference between the Preliminary Prospectus and the Final Prospectus?

The Preliminary Prospectus also known as a “Red Herring” is used to solicit pre-price interest in an underwritten offering. The Final Prospectus includes changes and additional information mandated by the SEC to ensure full disclosure. The Final Prospectus is distributed after the offering has been priced and allocated.

When will I receive the Final Prospectus?

Customers should expect to receive the Final Prospectus via US Mail within 10 days of the Effective/Offering Date.

Will Regal recommend specific offerings to me?

No. Regal will supply pre-approved account holders with offering documents required to perform their own thorough due diligence. It is up to the Syndicate account holder to conduct the necessary due diligence to determine whether an offering is suitable for their account. Regal Securities also recommends that Syndicate participants consult with their legal and tax advisors before making an investment decision.

Indications of Interest

What is an Indication of Interest (IOI)?

Once you have opened a Syndicate account and are approved to view Syndicate information, you will begin receiving emails describing upcoming new-issue offerings. If you express an interest in a particular offering, you will be sent the Preliminary Prospectus via email for the purpose of conducting your due diligence. If, after reviewing the material, you decide that you would like to purchase shares, you must complete an Indication of Interest form. This form will be provided to you by the Regal Representative assigned to your account. Please note, submission of an Indication of Interest (IOI) does not guarantee that you will receive all or any of the shares that you are interested in purchasing. Likewise, do not indicate you would like to purchase an amount of shares greater than what you are prepared to purchase.

Is there a minimum amount I must submit in my Indication of Interest?

Yes. In most cases the minimum level of participation is 100 shares. All IOIs should be submitted in round lots (increments of 100 shares).

After reading the Preliminary Prospectus how do I place an Indication of Interest (IOI)?

The Regal Representative assigned to your account will provide you an Indication of Interest form. You will need to complete the form indicating the amount of shares you are interested in purchasing.

Can I change my Indication of Interest (IOI) after submitting?

Yes. You may make changes to your Indication of Interest at any time prior to the Effective Date. Once the Effective Date has arrived, your Indication of Interest becomes an actual order to purchase the new-issue security.

After I submit an Indication of Interest (IOI), how long will it take to find out if I received an allocation of shares?

Once the offering has been priced, the allocation amounts will be distributed to Syndicate member firms. Regal will communicate this information to you via telephone or email.

If I request a certain amount of shares am I guaranteed to receive that amount?

There is no guarantee that the amount of shares requested will be allocated to you. Indications of Interest are filled on a best efforts basis.

Funding, Settlement and Dividends

Are there any charges, commission, postage or handling fees?

No. Commissions are paid by the issuer. All IPOs are offered on a net basis meaning you will be charged the amount the issue is priced with no additional charges. Regal does not charge postage or handling fees.

Can I buy IPOs on margin?

No. New issue offerings typically are not marginable for at least 30 days.

When must I fund my Syndicate account?

There are no restrictions on when to fund your account, however, funds must be available in your account prior to the settlement date of any new-issue purchase.

Can I move money to fund the IPO purchase from my existing Regal Discount Securities account?

Yes. You may fund your Syndicate account with funds from an existing Regal Discount Securities account. This may be done by completing our Letter of Authorization to Journal Funds or Securities form. Funds may not be transferred with the expectation of receiving an allocation of shares.

After making an IPO purchase can I consolidate this with my existing portfolio?

Yes. If you have completed a Letter of Authorization to Journal Funds or Securities form, you may move the security to another account after holding your new-issue security for at least 60 days.

Is there a price advantage to purchasing a new issue offering from one broker over another?

No. All underwriting participants must offer new-issue securities at the same public offering price. Discounts are not allowed.

Can the value of the new-issue security go down in value?

Yes. Once a new-issue offering begins trading in the open market, the security will be subject to market forces and price movements according to the supply and demand for the issue.

Will I receive a written confirmation?

Upon the allocation of shares, you will receive a written confirmation similar to ones generated from secondary market transactions. Depending upon your account settings, the confirmation may be delivered electronically or via U.S. Mail.

When I receive an allocation, how long do I have to hold the shares?

You may sell your shares at any time, however, issuers are looking for investors in their companies or funds, not traders. The period of time when selling is discouraged varies from deal to deal depending on the size of the offering, number of participants, and the type of security being offered. If you decide to liquidate your shares during this period, the transaction may be considered “flipping”. As a consequence you may be restricted from participation in future offerings.

When are dividends paid out?

If the security you purchase pays a dividend, the dividend will be credited to your account on the stated Payable Date.

When is the initial dividend paid out?

If you purchase a new-issue Closed-End Fund that pays a dividend, the initial payment is usually made within 45-60 days from the offering date. Please review the Final Prospectus for specific information about the offering.

Can I reinvest my dividends?

Yes. Upon completion of the purchase, simply notify your representative on how you would like your dividends paid. Your choices are cash or dividend reinvestment.

Communication

What should I do to get started?

First, you must open a Syndicate account with Regal Securities, Inc. Once you have completed all of the necessary paperwork and your account has been approved, you will be added to our Syndicate email list. You will then begin to receive regular correspondence about upcoming new-issue offerings. You will also be contacted by one of our Registered Representatives to discuss the types of offerings you prefer. Click here to begin the process of opening a Syndicate account with a separate company, Regal Securities, Inc.

How will I know when a new-issue offering is available?

Once you have opened a new Syndicate account and have been approved to view our Syndicate offerings, you will begin to receive email communication from Regal describing forth coming offerings. If you are interested in learning more about a specific offering, simply email the Regal Representative identified in the email communication.

Who can I speak with to get more information?

Please contact a Regal Syndicate specialist, support@regalsecurities.com.

Risk and Suitability

What are the risks involved with Syndicate participation?

Participation in new issue offerings comes with inherent risks. These risks include, but are not limited to:

• New issue equities may trade at levels below the offering price. Once the new issue begins trading in the open market, it will be subject to the same forces of supply and demand as other publicly traded entities.
• Due to your stated Investment Objective you may not be able to participate in all offerings. Each offering will come with a predetermined level of risk. For example, some issues may only be eligible to customers with a stated Investment Objective of Speculation. If your Investment Objective is Growth and Income, you will not be eligible to participate. The designation of each offering will be disclosed prior to the distribution of the Preliminary Prospectus.
• The possibility exists that you may not receive an allocation of shares if you submit an Indication of Interest (IOI). While Regal will make every effort to obtain shares on your behalf, the allocation process is controlled by the firm managing the offering. If there is high demand for an offering, Regal may not receive any shares requested.

How will I know if I my account is suitable to invest in a specific deal?

Your Regal representative will review with you the specific suitability requirements for each new offering. Each offering will come with a predetermined level of risk. For example, some issues may only be eligible to customers with a stated Investment Objective of Speculation. If your Investment Objective is Growth and Income, you will not be eligible to participate. The designation of each offering will be disclosed prior to the distribution of the Preliminary Prospectus.