Auction Rate Security Redemption Procedures

Brief Description of Auction Rate Securities (ARS) Partial Call Allocation Process
When an ARS issuer initiates a partial call, it notifies the appropriate depository of the specific security and the amount to be redeemed. Typically, the depository is the Depository Trust Company (DTC). After receiving notice of the number of securities to be called, DTC assigns an identification number to each tradable unit held by each broker-dealer holding securities at DTC. DTC then conducts an impartial lottery that randomly allocates redemptions to the numbered units held by all broker-dealers. Because the lottery is a random process, it is possible that some broker-dealers (and therefore their customers) will not be allocated any redemption.

Once Raymond James receives notice of any allocation from a partial call of an ARS issue, we conduct a computer-generated random lottery to allocate our portion of the partial call (as determined by the DTC lottery process) in a fair and impartial manner among our customers who hold ARS shares in “street name.”

Raymond James Proprietary and Employee Positions are Liquidated Last, (if at all)
Applicable regulations (such as NYSE Rule 402.30) prohibit Raymond James from allocating favorable calls to proprietary and employee accounts prior to redeeming all shares held in customer accounts. Raymond James has adopted a lottery process that is designed to ensure compliance with these rules.

Raymond James ARS Partial Redemption Process Designed to Ensure Impartiality
Our process is designed to ensure that lotteries are conducted fairly and impartially. The probability of a customer having units redeemed through the lottery process is proportional to the holdings of all Raymond James clients holding the particular ARS issue in street name.

The lottery performed by Raymond James starts by identifying the number of units of the relevant ARS issue held by each customer. Each unit is then entered into the lottery.

Units per customer are determined by dividing (a) the total par value of the customer’s position in the relevant ARS issue by (b) the unit of trade for the redemption. For example, if a customer owns $50,000 of the relevant ARS issue and the unit of trade for the partial call is $25,000, that customer will have two units entered into the lottery. A customer with a $250,000 position in the relevant ARS issue will have 10 units entered into the lottery. Below are some examples of how this process works.

Partial Call Lottery Entry Scenarios

Each unit has equal odds of redemption in a random lottery. However, the odds of a client receiving a partial redemption are dependent on the number of units a client has in the lottery. As a result, a particular customer's account could have all, some, or none of their shares redeemed.

Additional Information regarding ARS Redemptions
If you have additional questions about the ARS redemption process, please contact your Financial Advisor.