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Invest Disclosures

Unsettled Proceeds Sales

Please note that the rules for trading in a Cash Account are significantly different than the rules for trading in a Margin Account. There are situations when a sell transaction in a Cash Account using unsettled funds may violate Regulation T of the Federal Reserve Board (FRB).

The Securities and Exchange Commission (SEC) requires that most equity investments such as stocks settle in two (2) business days. This settlement process is generally known in the brokerage industry as T+2.

Regulations regarding the lending of funds during the T+2 settlement process is governed by the Federal Reserve Board (FRB) Regulation T. If you sell shares purchased with the funds from another sale which was not settled (prior to the 2nd business day after the sale) in a cash account it may be a violation of Regulation T.

Under the Regulation T, when a security is purchased, the funds must be received by Ally Invest Securities LLC (“Ally Invest”) prior to the sale of that security. If the respective security is sold prior to Ally Invest receiving the appropriate funds, the credit from the sale will not be applied to the account and the account may be placed on a 90-day restriction. Orders placed in a restricted account will have to be placed through a broker.

In addition, Option Contracts settles in one (1) business day or T+1.

Unsettled Proceeds Sales Version 4