As filed with the Securities and Exchange Commission on March 15, 2011
Registration No. 333-36480
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 10
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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Merrill Lynch, Pierce, Fenner & Smith Incorporated
Initial Depositor
(Exact name of registrant as specified in charter)
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Regional Bank HOLDRSSM Trust
[Issuer with respect to the receipts]
Delaware (State or other jurisdiction of incorporation or organization) | 6211 (Primary Standard Industrial Classification Code Number) | 13-5674085 (I.R.S. Employer Identification Number) |
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One Bryant Park
New York, New York 10036
(212) 449-1000
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
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Copies to:
Merrill Lynch, Pierce, Fenner & Smith Incorporated One Bryant Park New York, New York 10036 (212) 449-1000 Attn: Corporate Secretary (Name, address, including zip code, and telephone number, including area code, of agent for service) | Abigail Arms, Esq. Shearman & Sterling LLP 801 Pennsylvania Avenue, NW, Suite 900 Washington, D.C. 20004 (202) 508-8000 |
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. S
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. £
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. £
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. £
PROSPECTUS
1,000,000,000 Depositary Receipts
Regional Bank HOLDRSSM Trust
The Regional Bank HOLDRSSM Trust issues Depositary Receipts called Regional Bank HOLDRSSM representing your undivided beneficial ownership in the U.S.-traded common stock of a group of specified companies that are involved in various segments of the regional banking industry. The Bank of New York Mellon is the trustee. You only may acquire, hold or transfer Regional Bank HOLDRSSM in a round-lot amount of 100 Regional Bank HOLDRSSM or round-lot multiples. Regional Bank HOLDRSSM are separate from the underlying deposited common stock that are represented by the Regional Bank HOLDRSSM. For a list of the names and the number of shares of the companies that make up a Regional Bank HOLDRSM, see “Highlights of Regional Bank HOLDRS—The Regional Bank HOLDRS” in this prospectus. The Regional Bank HOLDRSSM Trust will issue Regional Bank HOLDRSSM on a continuous basis.
Investing in Regional Bank HOLDRSSM involves significant risks. See “Risk Factors” starting on page 4.
Regional Bank HOLDRSSM are neither interests in nor obligations of Merrill Lynch, Pierce, Fenner & Smith Incorporated or any of its affiliates. Regional Bank HOLDRSSM are not interests in The Bank of New York Mellon, as trustee. Please see “Description of the Depositary Trust Agreement” in this prospectus for a more complete description of the duties and responsibilities of the trustee, including the obligation of the trustee to act without negligence or bad faith.
The Regional Bank HOLDRSSM are listed on the NYSE Arca under the symbol “RKH.” On March 11, 2011, the last reported sale price of the Regional Bank HOLDRSSM on the NYSE Arca was $87.49.
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Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
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The date of this prospectus is March 15, 2011.
“HOLDRS” and “HOLding Company Depositary ReceiptS” are service marks of Bank of America Corporation.
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This prospectus contains information you should consider when making your investment decision. We have not authorized any person to provide you with any information or to make any representations not contained in this prospectus. We do not take any responsibility for, and can provide no assurances as to, the reliability of any information that others may provide you. We are not making an offer to sell Regional Bank HOLDRS in any jurisdiction where the offer or sale is not permitted. “For information on where you may find more information about the issuers of the underlying securities, see “Where You Can Find More Information.”
The Regional Bank HOLDRS are not registered for public sale outside of the United States. Non-U.S. receipt holders should refer to “U.S. Federal Income Tax Consequences—Non U.S. receipt holders” and we recommend that non-U.S. receipt holders consult their tax advisors regarding U.S. withholding and other taxes which may apply to ownership of the Regional Bank HOLDRS or of the underlying securities through an investment in the Regional Bank HOLDRS.
The Regional Bank HOLding Company Depositary ReceiptS or HOLDRS Trust was formed under the depositary trust agreement, dated as of May 18, 2000, as amended and restated on June 21, 2000, among The Bank of New York Mellon, as trustee, Merrill Lynch, Pierce, Fenner & Smith Incorporated, other depositors and the owners of the Regional Bank HOLDRS. The depositary trust agreement was amended on November 22, 2000. The trust is not a registered investment company under the Investment Company Act of 1940.
The number of shares of each company’s common stock currently held by the trust with respect to each round-lot of Regional Bank HOLDRS is specified under “Highlights of Regional Bank HOLDRS—The Regional Bank HOLDRS.” This group of common stock, and the securities of any company that may be added to the Regional Bank HOLDRS, are collectively referred to in this prospectus as the common stock, the securities or the underlying securities. The companies included in the Regional Bank HOLDRS may change as a result of reconstitution events, distributions of securities by the underlying issuers or other events. See “Description of the Depositary Trust Agreement—Reconstitution events” for an explanation of these events. The Regional Bank HOLDRS are separate from the deposited underlying securities that are represented by the Regional Bank HOLDRS. On March 11, 2011, there were 1,222,800 Regional Bank HOLDRS outstanding.
An investment in Regional Bank HOLDRS involves risks similar to investing directly in each of the underlying securities outside of the Regional Bank HOLDRS, including the risks associated with a concentrated investment in regional banks.
General Risk Factors
| · | Loss of investment. Because the value of Regional Bank HOLDRS directly relates to the value of the underlying securities, you may lose all or a substantial portion of your investment in the Regional Bank HOLDRS if the underlying securities decline in value. |
| · | Discount trading price. Regional Bank HOLDRS may trade at a discount to the aggregate value of the underlying securities. |
| · | Ownership of only fractional shares in the underlying securities. As a result of distributions of securities by companies included in the Regional Bank HOLDRS or other corporate events, such as mergers, a Regional Bank HOLDR may represent an interest in a fractional share of an underlying security. You will only be entitled to voting, distribution and other beneficial ownership rights in the underlying securities in which you own only fractional shares to the extent that the depositary aggregates your fractional shares with the other fractional shares of such underlying securities included in the Regional Bank HOLDRS and passes on beneficial ownership rights, including distribution and voting rights, to you based on your proportional, fractional shares in the underlying securities. In addition, if you surrender your Regional Bank HOLDRS to receive the underlying securities you will receive cash in lieu of your fractional shares. You will not be entitled to any securities if your interest in an underlying security is only a fraction of a share. |
| · | Not necessarily representative of the regional banking industry. At the time of the initial offering, on June 22, 2000, the companies included in the Regional Bank HOLDRS were generally considered to be involved in various aspects of the regional banking industry; however, since the time of the initial offering, the companies included in the Regional Bank HOLDRS may not be involved in the regional banking industry. In this case, the Regional Bank HOLDRS may not consist of securities issued only by companies involved in the regional banking industry. In addition, the market price of the underlying securities and the Regional Bank HOLDRS may not necessarily follow the price movements of the entire regional banking industry generally. If the underlying securities decline in value, your investment in the Regional Bank HOLDRS will decline in value, even if common stock prices of companies involved in the regional banking industry generally increase in value. |
| · | Not necessarily comprised of solely regional banking companies. As a result of distributions of securities by companies included in the Regional Bank HOLDRS or other corporate events, such as mergers, securities of companies that are not currently included in the Regional Bank HOLDRS and that are not involved in the regional banking industry may be included in Regional Bank HOLDRS. The securities of a new company will only be distributed from the Regional Bank HOLDRS if the securities have a different Standard & Poor’s Corporation (“Standard & Poor’s”) sector classification than any of the underlying issuers included in Regional Bank HOLDRS at the time of the distribution or the corporate event or if the securities are not listed for trading on a U.S. national securities exchange. As of January 2, 2002, Standard & Poor’s Corporation sector classifications are based upon the Standard & Poor’s Global Industry Classification Standard (“GICS”) sectors. As there are only 10 broadly defined GICS sector classifications, the use of GICS sectors to determine whether a new company will be included in, or whether the securities of a new company are distributed from, the Regional Bank HOLDRS provides no assurance that each new company included in the Regional Bank HOLDRS will be involved in the regional banking industry. Currently, the underlying securities included in the Regional Bank HOLDRS are represented in the Financials GICS sector. As each Standard & Poor’s GICS sector is defined very broadly, the securities of a new company could have the same GICS sector classification as a company currently included in the Regional Bank HOLDRS yet not be involved in the regional banking industry. In addition, the GICS sector classifications of securities included in the Regional Bank HOLDRS may change over time if the |
companies that issued these securities change their focus of operations resulting in a change to a GICS sector classification or if Standard & Poor’s alters the criteria it uses to determine GICS sectors, or both. Therefore, additional GICS sectors may be represented in the Regional Bank HOLDRS, which may also result in the inclusion in the Regional Bank HOLDRS of the securities of a new company that is not involved in the regional banking industry.
| · | No investigation of underlying securities. The underlying securities initially included in the Regional Bank HOLDRS were selected by Merrill Lynch, Pierce, Fenner & Smith Incorporated based on the market capitalization of the issuers and the market liquidity of securities in the regional banking industry, without regard for the value, price performance, volatility or investment merit of the underlying securities. Consequently, the Regional Bank HOLDRS Trust, the trustee, Merrill Lynch, Pierce, Fenner & Smith Incorporated, and each of their respective affiliates, have not performed, and will not in the future perform, any investigation or review of the selected companies, including the public filings by the companies. Investors and market participants should not conclude that the inclusion of a company is any form of investment recommendation by the trust, the trustee, Merrill Lynch, Pierce, Fenner & Smith Incorporated, or their respective affiliates. |
| · | Loss of diversification. As a result of industry developments, reorganizations or market fluctuations affecting issuers of the underlying securities, Regional Bank HOLDRS may not necessarily be a diversified investment in the regional banking industry. In addition, reconstitution events, distributions of securities by an underlying issuer or other events, which may result in distributions of securities from, or the inclusion of additional securities in, the Regional Bank HOLDRS may also reduce diversification. As a result, Regional Bank HOLDRS may represent a concentrated investment in one or more of the underlying securities, which would reduce investment diversification and increase your exposure to the risks of concentrated investments. |
| · | Conflicting investment choices. In order to sell one or more of the underlying securities individually, participate in a tender offer relating to one or more of the underlying securities or participate in any form of stock repurchase program by an issuer of an underlying security, you will be required to cancel your Regional Bank HOLDRS and receive delivery of each of the underlying securities, including those underlying securities that you may not want to sell or are not subject to a tender offer or repurchase offer. The cancellation of your Regional Bank HOLDRS will allow you to sell the individual underlying securities or to deliver the individual underlying securities in a tender offer or any form of stock repurchase program. The cancellation of Regional Bank HOLDRS will involve payment of a cancellation fee to the trustee. |
| · | Trading halts. Trading in Regional Bank HOLDRS on the NYSE Arca may be halted if (i) the Regional Bank HOLDRS has fewer than the required number of record and/or beneficial holders for 30 or more consecutive trading days; (ii) the number of Regional Bank HOLDRS issued and outstanding falls below levels prescribed by the NYSE Arca; (iii) the market value of all Regional Bank HOLDRS issued and outstanding falls below levels prescribed by the NYSE Arca; or (iv) any other event shall occur or conditions exists which, in the opinion of the NYSE Arca, makes further dealings on the NYSE Arca inadvisable. If trading is halted in Regional Bank HOLDRS, you will not be able to trade Regional Bank HOLDRS and you will only be able to trade the underlying securities if you cancel your Regional Bank HOLDRS and receive each of the underlying securities. |
| · | Delisting from the NYSE Arca. The NYSE Arca may consider delisting the Regional Bank HOLDRS if (i) the Regional Bank HOLDRS has fewer than the required number of record and/or beneficial holders for 30 or more consecutive trading days; (ii) the number of Regional Bank HOLDRS issued and outstanding falls below levels prescribed by the NYSE Arca; (iii) the market value of all Regional Bank HOLDRS issued and outstanding falls below levels prescribed by the NYSE Arca; or (iv) any other event shall occur or conditions exists which, in the opinion of the NYSE Arca, makes further listing of the Regional Bank HOLDRS on the NYSE Arca inadvisable. If the Regional Bank HOLDRS are delisted by the NYSE Arca, a termination event will result unless the Regional Bank HOLDRS are listed for trading on another U.S. national securities exchange within five business days from the date the Regional Bank HOLDRS are delisted. |
| · | Possible conflicts of interest. Merrill Lynch, Pierce, Fenner & Smith Incorporated, as initial depositor, selected the underlying securities that were originally included in the Regional Bank HOLDRS and may face possible conflicts of interest as Merrill Lynch, Pierce, Fenner & Smith Incorporated and its affiliates may provide investment banking or other services for issuers of the underlying securities in connection with its business. |
| · | Delays in distributions. The depositary trust agreement provides that the trustee will use its reasonable efforts to distribute any cash or other distributions paid in respect of the underlying securities to you as soon as practicable after receipt of such distribution. You may, however, receive such cash or other distributions later than you would if you owned the underlying securities outside of the Regional Bank HOLDRS. In addition, you will not be entitled to any interest on any distribution by reason of any delay in distribution by the depositary. |
Risk Factors Specific to Companies Involved in the Regional Bank Industry
| · | Regional bank stock prices have been and will likely continue to be volatile, which will directly affect the price volatility of the Regional Bank HOLDRS, and you could lose all or a substantial part of your investment. The trading prices of the common stock of regional banks included in the Regional Bank HOLDRS can be volatile. The initial offering price of a Regional Bank HOLDR on June 22, 2000 was $98.14 and during 2010 the price of a Regional Bank HOLDR reached a high of $94.43 and a low of $67.89. Regional bank stock prices could be subject to wide fluctuations in response to a variety of factors, including the following: |
| § | actual or anticipated variations in the banks’ quarterly operating results; |
| § | announcements of technological innovations or new services by regional banks or their competitors; |
| § | announcements by regional banks or their competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments; |
| § | failure to integrate or realize projected benefits from acquisitions; |
| § | changes in financial estimates by securities analysts; |
| § | additions or departures of key personnel; |
| § | changes in government regulations; and |
| § | fluctuations in quarterly and annual operating results. |
| · | The banking industry is heavily regulated on the federal and state levels, and modifications to existing banking laws and regulations or the adoption of new laws may adversely affect the operations of banking and financial institutions. There are numerous federal and state laws and regulations with which banking and financial institutions must comply and the scope of these laws is expanding. Adverse regulatory examinations and non-compliance with regulatory requirements may result in sanctions by regulatory agencies, additional regulatory restrictions and damage to the reputation of a bank, its holding company and affiliates. Additionally, government regulation of regional banking companies is intended primarily for the protection of consumers, borrowers and depositors of the banks, rather than of the stockholders of the institutions. Changes to laws and regulations can affect banks’ operating environments in substantial and unpredictable ways and changes may adversely affect the nature and scope of banking and financial activities and may have a negative effect on the financial condition and results of operations of a bank or financial institution. |
| · | Most regional banking companies are holding companies that rely on dividends from their subsidiaries as a substantial portion of their income and their rights generally are subordinate to the interests of third parties. The payment of dividends by subsidiaries of regional banks is subject to legal restrictions. In |
addition, the right of a parent bank holding company to participate in any distribution of assets upon a subsidiaries’ liquidation or reorganization is subject to the prior claims of the subsidiaries’ creditors. The ability of a bank holding company to receive dividends or other distributions is unpredictable, and fluctuations in income may adversely affect your investment in the Regional Bank HOLDRS.
| · | Some of the companies involved in the regional banking industry are also engaged in other lines of business unrelated to the regional banking business, and they may experience problems with these lines of business which could adversely affect their operating results. Some of the companies which comprise the Regional Bank HOLDRS have lines of business such as insurance, securities brokerage and underwriting, real estate development and equity investing that do not relate to traditional banking activities and which may present additional risks. The operating results of these regional banks may fluctuate as a result of these additional risks and events in the other lines of business. In addition, a regional bank’s ability to engage in new activities may expose it to business risks with which it has less experience than it has with the business risks associated with its traditional businesses. Despite a company’s possible success in traditional banking activities, there can be no assurance that the other lines of business in which these companies are engaged will not have an adverse effect on a company’s business or financial condition. |
| · | Inability to manage rapid growth could adversely affect systems, management resources and revenues. Many regional banks may rapidly expand their operations. The marketing and expansion strategies of many of these regional banks has placed and will continue to place a significant strain on the management, financial controls, operations systems, personnel and other resources. There can be no assurance that these companies will complete the necessary improvements to their systems, procedures and controls necessary to support their future operations in a timely manner or that management will be able to hire, train, retain and manage required personnel to manage such rapid growth. |
| · | The financial and international operations of many banks expose them to risks associated with instability and changes in economic, legal and political conditions, foreign currency fluctuations, changes in foreign regulations and other risks inherent to international business. Many banks regularly trade in foreign currencies, engage in interest rate, foreign exchange and related derivative transactions, and, to a lesser extent, acquire and trade in non-U.S. securities. In addition, many regional banks have international operations. The risks of international business that the companies are exposed to include the following: |
| · | volatility in general economic, social and political conditions; |
| · | the difficulty of enforcing intellectual property rights, agreements and collecting receivables through certain foreign legal systems; |
| · | differing tax rates, tariffs, exchange controls or other similar restrictions; |
| · | volatility of currency markets and value of worldwide financial markets; and |
| · | changes in, and compliance with, domestic and foreign laws and regulations which impose a range of restrictions on operations, trade practices, foreign trade and international investment decisions. |
| · | Many regional banks are dependent on their ability to continue to attract and retain highly-skilled technical and managerial personnel to develop and generate their business. Many regional banks are highly dependent on the experience, abilities and continued services of key executive officers and key technical personnel. If these banks lose the services of any of these key officers or key technical personnel, their future success could be undermined. Competition for personnel has been and may continue to be intense. There is no certainty that any of these regional banks will be able to continue to attract and retain qualified personnel. |
| · | Fluctuations in interest rates could adversely affect the profitability of companies whose common stock are included in the Regional Bank HOLDRS. Changes in market interest rates, including changes in the relationship between short-term and long-term market interest rates or between different interest rate indices, can impact margin spread, that is, the difference between the interest rates the companies whose common stock are included in the Regional Bank HOLDRS charge on interest earning assets, such as |
loans, and the interest rates they pay on interest bearing liabilities, such as deposits. The impact, particularly in a falling interest rate environment, which is currently the case, could result in an increase in such companies’ interest expense relative to their interest income.
| · | Companies whose common stock are included in the Regional Bank HOLDRS are exposed to risks in connection with the loans they make. A significant source of risk for those companies whose common stock are included in the Regional Bank HOLDRS arises from the possibility that losses will be sustained because borrowers, guarantors and related parties may fail to perform in accordance with the terms of their loans. Credit monitoring procedures and credit policies, including the establishment and review of the allowance for loan losses may not prevent unexpected losses that could adversely affect the results of operations of companies whose securities are included in the Regional Bank HOLDRS. Such risk is exacerbated in a recessionary environment, which is currently the case. |
This discussion highlights information regarding Regional Bank HOLDRS. We present certain information more fully in the rest of this prospectus. You should read the entire prospectus carefully before you purchase Regional Bank HOLDRS.
| Issuer | Regional Bank HOLDRS Trust. |
| The trust | The Regional Bank HOLDRS Trust was formed under the depositary trust agreement, dated as of May 18, 2000, as amended and restated on June 21, 2000, among The Bank of New York Mellon, as trustee, Merrill Lynch, Pierce, Fenner & Smith Incorporated, other depositors and the owners of the Regional Bank HOLDRS. The depositary trust agreement was amended on November 22, 2000. The trust is not a registered investment company under the Investment Company Act of 1940. |
| Initial depositor | Merrill Lynch, Pierce, Fenner & Smith Incorporated. |
| Trustee | The Bank of New York Mellon, a New York state-chartered banking organization, is the trustee and receives compensation as set forth in the depositary trust agreement. The trustee is responsible for receiving deposits of underlying securities and delivering Regional Bank HOLDRS representing the underlying securities issued by the trust. The trustee holds the underlying securities on behalf of the holders of Regional Bank HOLDRS. |
| Purpose of Regional Bank HOLDRS | Regional Bank HOLDRS were designed to achieve the following: |
| Diversification. Regional Bank HOLDRS were initially designed to allow you to diversify your investments in the regional banking industry through a single, exchange-listed instrument representing your undivided beneficial ownership of the underlying securities. See “Risk Factors¾General Risk Factors.” | |
Flexibility. The beneficial owners of Regional Bank HOLDRS have undivided beneficial ownership interests in each of the underlying securities represented by the Regional Bank HOLDRS, and can cancel their Regional Bank HOLDRS to receive each of the underlying securities represented by the Regional Bank HOLDRS. | |
Transaction costs. The expenses associated with buying and selling Regional Bank HOLDRS in the secondary market are expected to be less than separately buying and selling each of the underlying securities in a traditional brokerage account with transaction-based charges. | |
| Trust assets | The trust holds shares of common stock issued by specified companies that, when initially selected, were involved in the regional banking industry. Except when a reconstitution event, distribution of securities by an underlying issuer or other event occurs, the underlying securities will not change and the securities of a new company will not be added to the securities underlying the Regional Bank HOLDRS. Reconstitution events are described in this prospectus under the heading “Description of the Depositary Trust Agreement—Distributions” and “—Reconstitution events.” |
| The trust’s assets may increase or decrease as a result of in-kind deposits and withdrawals of the underlying securities during the life of the trust. |
| The Regional Bank HOLDRS | The trust has issued, and may continue to issue Regional Bank HOLDRS that represent an undivided beneficial ownership interest in the shares of common stock that are held by the trust on your behalf. The Regional Bank HOLDRS themselves are separate from the underlying securities that are represented by the Regional Bank HOLDRS. |
| The following table provides the: |
· | names of the issuers of the underlying securities currently represented by a Regional Bank HOLDR; | |
· | the stock ticker symbols; | |
· | share amounts currently represented by a round-lot of 100 Regional Bank HOLDRS; and | |
· | the primary U.S. market on which the underlying securities of the selected companies are traded. |
Name of Company | Ticker | Share Amounts | Primary Trading Market | |||
| Bank of America Corporation | BAC | 27.7650 | NYSE | |||
| The Bank of New York Mellon Corporation | BK | 14.0000 | NYSE | |||
| BB&T Corporation | BBT | 10.0000 | NYSE | |||
| Comerica Incorporated | CMA | 5.0000 | NYSE | |||
| Fifth Third Bancorp | FITB | 13.5000 | NASDAQ GS | |||
| JPMorgan Chase & Co | JPM | 43.5600 | NYSE | |||
| KeyCorp | KEY | 13.0000 | NYSE | |||
| Marshall & Ilsley Corporation | MI | 6.0000 | NYSE | |||
| Northern Trust Corporation | NTRS | 7.0000 | NASDAQ GS | |||
| Piper Jaffray Companies | PJC | 0.5683 | NYSE | |||
| PNC Financial Services Group, Inc. | PNC | 9.7056 | NYSE | |||
| Regions Financial Corporation | RF | 9.5688 | NYSE | |||
| State Street Corporation | STT | 10.0000 | NYSE | |||
| SunTrust Banks, Inc. | STI | 9.0000 | NYSE | |||
| Synovus Financial Corp. | SNV | 8.0000 | NYSE | |||
| U.S. Bancorp | USB | 56.8300 | NYSE | |||
| Wells Fargo & Company. | WFC | 56.1631 | NYSE |
| The companies whose common stock were initially included in the Regional Bank HOLDRS, at the time the Regional Bank HOLDRS were originally issued on June 22, 2000, were generally considered to be among the largest and most liquid regional banks with U.S. traded common stock, as measured by market capitalization and trading volume on May 2, 2000. The market capitalization of a company was determined by multiplying the market price of its securities by the number of its outstanding securities. | |
| The trust will only issue and cancel, and you may only obtain, hold, trade or surrender, Regional Bank HOLDRS in a round-lot of 100 Regional Bank HOLDRS and round-lot multiples. The trust will only issue Regional Bank HOLDRS upon the deposit of the whole shares represented by a round-lot of 100 Regional Bank HOLDRS. In the event that a fractional share comes to be represented by a round-lot of Regional Bank HOLDRS, the trust may require a minimum of more than one round-lot of 100 Regional Bank | |
| HOLDRS for an issuance so that the trust will always receive whole share amounts for issuance of Regional Bank HOLDRS. | |
| The number of outstanding Regional Bank HOLDRS will increase and decrease as a result of in-kind deposits and withdrawals of the underlying securities. The trust will stand ready to issue additional Regional Bank HOLDRS on a continuous basis when an investor deposits the required number of shares of common stock with the trustee. | |
| Purchases | You may acquire Regional Bank HOLDRS in two ways: |
· | through an in-kind deposit of the required number of shares of common stock of the underlying issuers with the trustee; or | |
· | through a cash purchase in the secondary trading market. |
| Issuance and cancellation fees | If you wish to create Regional Bank HOLDRS by delivering to the trust the requisite shares of common stock represented by a round-lot of 100 Regional Bank HOLDRS, The Bank of New York Mellon, as trustee, will charge you an issuance fee of up to $10.00 for each round-lot of 100 Regional Bank HOLDRS. If you wish to cancel your Regional Bank HOLDRS and withdraw your underlying securities, The Bank of New York Mellon, as trustee, will charge you a cancellation fee of up to $10.00 for each round-lot of 100 Regional Bank HOLDRS. |
| Commissions | If you choose to deposit underlying securities in order to receive Regional Bank HOLDRS, you will be responsible for paying any sales commission associated with your purchase of the underlying securities that is charged by your broker in addition to the issuance fee charged by the trustee that is described above. |
| Custody fees | The Bank of New York Mellon, as trustee and as custodian, will charge you a quarterly custody fee of $2.00 for each round-lot of 100 Regional Bank HOLDRS, to be deducted from any cash dividend or other cash distributions on underlying securities received by the trustee. With respect to the aggregate custody fee payable in any calendar year for each Regional Bank HOLDR, the trustee will waive that portion of the fee which exceeds the total cash dividends and other cash distributions received, or to be received, and payable with respect to such calendar year. |
| Rights relating to Regional Bank HOLDRS | You have the right to withdraw the underlying securities upon request by delivering a round-lot or integral multiple of a round-lot of Regional Bank HOLDRS to the trustee, during the trustee’s business hours, and paying the cancellation fees, taxes and other charges. You should receive the underlying securities no later than the business day after the trustee receives a proper notice of cancellation. The trustee will not deliver fractional shares of underlying securities. To the extent that any cancellation of Regional Bank HOLDRS would otherwise require the delivery of a fractional share, the trustee will sell the fractional share in the market and the trust, in turn, will deliver cash in lieu of the fractional share. Except with respect to the right to vote for dissolution of the trust, the Regional Bank HOLDRS themselves will not have voting rights. |
| Rights relating to the underlying securities | Regional Bank HOLDRS represents your beneficial ownership of the underlying securities. Owners of Regional Bank HOLDRS have the same rights and privileges as if they owned beneficially the underlying securities in “street name” outside of Regional Bank HOLDRS. These include the right to instruct the trustee to vote the underlying securities or attend shareholder meetings yourself, to receive any dividends and other distributions on the underlying securities that are declared and paid to the trustee by an issuer of an underlying security, the right to pledge Regional Bank HOLDRS and the right to surrender Regional Bank HOLDRS to receive the underlying securities. See “Description of the Depositary Trust Agreement.” Regional Bank HOLDRS does not change your beneficial ownership in the underlying securities under United States federal securities laws, including sections 13(d) and 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As a result, you have the same obligations to file insider trading reports that you would have if you held the underlying securities outside of Regional Bank HOLDRS. However, due to the nature of Regional Bank HOLDRS, you will not be able to participate in any dividend reinvestment program of an issuer of underlying securities unless you cancel your Regional Bank HOLDRS (and pay the applicable fees) and receive all of the underlying securities. |
| A holder of Regional Bank HOLDRS is not a registered owner of the underlying securities. In order to become a registered owner, a holder of Regional Bank HOLDRS would need to surrender their Regional Bank HOLDRS, pay the applicable fees and expenses, receive all of the underlying securities and follow the procedures established by the issuers of the underlying securities for registering their securities in the name of such holder. | |
| You retain the right to receive any reports and communications that the issuers of underlying securities are required to send to beneficial owners of their securities. As such, you will receive such reports and communications from the broker through which you hold your Regional Bank HOLDRS in the same manner as if you beneficially owned your underlying securities outside of Regional Bank HOLDRS in “street name” through a brokerage account. The trustee will not attempt to exercise the right to vote that attaches to, or give a proxy with respect to, the underlying securities other than in accordance with your instructions. | |
| The depositary trust agreement entitles you to receive, subject to certain limitations and net of any fees and expenses of the trustee, any distributions of cash (including dividends), securities or property made with respect to the underlying securities. However, any distribution of securities by an issuer of underlying securities will be deposited into the trust and will become part of the underlying securities unless the distributed securities are not listed for trading on a U.S. national securities exchange or the distributed securities have a Standard & Poor’s GICS sector classification that is different from the GICS sector classifications represented by the companies included in the Regional Bank HOLDRS at the time of the distribution. In addition, if the issuer of underlying securities offers rights to acquire additional underlying securities or other securities, the rights may be distributed to you, may be disposed of for your benefit or may lapse. | |
| There may be a delay between the time any cash or other distribution is received by the trustee with respect to the underlying securities and the time such cash or other distributions are distributed to you. In addition, you are |
| not entitled to any interest on any distribution by reason of any delay in distribution by the trustee. If any tax or other governmental charge becomes due with respect to Regional Bank HOLDRS or any underlying securities, you will be responsible for paying that tax or governmental charge. | |
| If you wish to participate in a tender offer for any of the underlying securities, or any form of stock repurchase program by an issuer of an underlying security, you must surrender your Regional Bank HOLDRS (and pay the applicable fees and expenses) and receive all of your underlying securities in exchange for your Regional Bank HOLDRS, including those underlying securities not subject to a tender offer or repurchase offer. For specific information about obtaining your underlying securities, you should read the discussion under the caption “Description of the Depositary Trust Agreement—Withdrawal of underlying securities.” | |
| Ownership rights in fractional shares in the underlying securities | As a result of distributions of securities by companies included in the Regional Bank HOLDRS or other corporate events, such as mergers, a Regional Bank HOLDR may represent an interest in a fractional share of an underlying security. You are entitled to receive distributions proportionate to your fractional shares. |
| In addition, you are entitled to receive proxy materials and other shareholder communications and you are entitled to exercise voting rights proportionate to your fractional shares. The trustee will aggregate the votes of all of the share fractions represented by Regional Bank HOLDRS and will vote the largest possible number of whole shares. If, after aggregation, there is a fractional remainder, this fraction will be ignored, because the issuer will only recognize whole share votes. For example, if 100,001 round-lots of 100 Regional Bank HOLDRS are outstanding and each round-lot of 100 Regional Bank HOLDRS represents 1.75 shares of an underlying security, there will be 175,001.75 votes of the underlying security represented by Regional Bank HOLDRS. If holders of 50,000 round-lots of 100 Regional Bank HOLDRS vote their underlying securities “yes” and holders of 50,001 round-lots of 100 Regional Bank HOLDRS vote their underlying securities “no,” there will be 87,500 affirmative votes and 87,501.75 negative votes. The trustee will ignore the .75 negative votes and will deliver to the issuer 87,500 affirmative votes and 87,501 negative votes. | |
| Reconstitution events | The depositary trust agreement provides for the automatic distribution of underlying securities from the Regional Bank HOLDRS to you in the following four circumstances: |
| A. | If an issuer of underlying securities no longer has a class of securities registered under section 12 of the Exchange Act, then its securities will no longer be an underlying security and the trustee will distribute the shares of that company to the owners of the Regional Bank HOLDRS. | |
| B. | If the Securities and Exchange Commission (the “SEC”) finds that an issuer of underlying securities should be registered as an investment company under the Investment Company Act of 1940, and the trustee has actual knowledge of the SEC finding, then its securities will no longer be an underlying security and the trustee will distribute the shares of that company to the owners of the Regional Bank HOLDRS. | |
| C. | If the underlying securities of an issuer cease to be outstanding as a result of a merger, consolidation, corporate combination or other event, the trustee will distribute the consideration paid by and received from | |
| the acquiring company to the beneficial owners of Regional Bank HOLDRS; provided that any securities received as consideration will be distributed only if the distributed securities have a different Standard & Poor’s GICS sector classification than any of the underlying securities represented in the Regional Bank HOLDRS at the time of the distribution or exchange or if the securities received are not listed for trading on a U.S. national securities exchange. In any other case, the additional securities received as consideration will be deposited into the trust. | ||
| D. | If an issuer’s underlying securities are delisted from trading on a U.S. national securities exchange and are not listed for trading on another U.S. national securities exchange within five business days from the date the securities are delisted. | |
| To the extent a distribution of underlying securities from the Regional Bank HOLDRS is required as a result of a reconstitution event, the trustee will deliver the underlying security to you as promptly as practicable after the date that the trustee has knowledge of the occurrence of a reconstitution event. | |
| In addition, securities of a new company will be added to the Regional Bank HOLDRS, as a result of a distribution of securities by an underlying issuer, where a corporate event occurs, or where the securities of an underlying issuer are exchanged for the securities of another company, unless the securities have a Standard & Poor’s GICS sector classification that is different from the GICS sector classification of any other security then included in the Regional Bank HOLDRS or if the securities received are not listed for trading on a U.S. national securities exchange. | |
| It is anticipated that, as a result of the broadly defined Standard & Poor’s GICS sectors, most distributions or exchanges of securities will result in the inclusion of new securities in the Regional Bank HOLDRS. The trustee will review the Standard & Poor’s GICS sector classifications of securities to determine whether securities received as a result of a distribution by an underlying issuer or as consideration for securities will be included in the Regional Bank HOLDRS or distributed from the Regional Bank HOLDRS to you. | |
| Standard & Poor’s sector classifications | Standard & Poor’s Corporation is an independent source of market information that, among other things, maintains the Global Industry Classification Standard, which classifies the securities of public companies into various sector classifications based upon GICS sectors, which are derived from its own criteria. The GICS classification standards were effective as of January 2, 2002. There are 10 Standard & Poor’s GICS sector classifications and each class of publicly traded securities of a company is given only one GICS sector classification. The securities included in the Regional Bank HOLDRS are currently represented in the Financials GICS sector. The Standard & Poor’s GICS sector classifications of the securities included in the Regional Bank HOLDRS may change over time if the companies that issued these securities change their focus of operations or if Standard & Poor’s alters the criteria it uses to determine GICS sectors, or both. |
| Termination events | A. | The Regional Bank HOLDRS are delisted from the NYSE Arca and are not listed for trading on another U.S. national securities exchange within five business days from the date the Regional Bank HOLDRS |
| are delisted. | ||
B. | The trustee resigns and no successor trustee is appointed within 60 days from the date the trustee provides notice to Merrill Lynch, Pierce, Fenner & Smith Incorporated, as initial depositor, of its intent to resign. | |
| C. | Beneficial owners of at least 75% of outstanding Regional Bank HOLDRS, other than Merrill Lynch, Pierce, Fenner & Smith Incorporated, vote to dissolve and liquidate the trust. | |
| If a termination event occurs, the trustee will distribute the underlying securities as promptly as practicable after the termination event. | |
| Upon termination of the depositary trust agreement and prior to distributing the underlying securities to you, the trustee will charge you a cancellation fee of up to $10.00 per round-lot of 100 Regional Bank HOLDRS surrendered, along with any taxes or other governmental charges, if any. | |
| U.S. federal income tax consequences | The U.S. federal income tax laws will treat a U.S. receipt holder of Regional Bank HOLDRS as directly owning the underlying securities. The Regional Bank HOLDRS themselves will not result in any U.S. federal income tax consequences separate from the tax consequences associated with ownership of the underlying securities. See “U.S. Federal Income Tax Consequences.” |
| Listing | The Regional Bank HOLDRS are listed on the NYSE Arca under the symbol “RKH.” |
| Trading | Investors are only able to acquire, hold, transfer and surrender a round-lot of 100 Regional Bank HOLDRS. Bid and ask prices, however, are quoted per single Regional Bank HOLDR. |
| Clearance and settlement | Regional Bank HOLDRS have been issued only in book-entry form. Regional Bank HOLDRS are evidenced by one or more global certificates that the trustee has deposited with The Depository Trust Company, referred to as DTC. Transfers within DTC will be in accordance with DTC’s usual rules and operating procedures. For further information see “Description of Regional Bank HOLDRS.” |
General. This discussion highlights information about the Regional Bank HOLDRS Trust. You should read this information, information about the depositary trust agreement, the depositary trust agreement and the amendment to the depositary trust agreement, in addition to other information included in this prospectus and the publicly available information about the issuers of the underlying securities, before you purchase Regional Bank HOLDRS. The material terms of the depositary trust agreement are described in this prospectus under the heading “Description of the Depositary Trust Agreement.”
The Regional Bank HOLDRS Trust. The trust was formed pursuant to the depositary trust agreement, dated as of May 18, 2000, as amended and restated on June 21, 2000. The depositary trust agreement was amended on November 22, 2000. The Bank of New York Mellon is the trustee. The Regional Bank HOLDRS Trust is not a registered investment company under the Investment Company Act of 1940.
The Regional Bank HOLDRS Trust is intended to hold deposited shares for the benefit of owners of Regional Bank HOLDRS. The trustee will perform only administrative and ministerial acts. The property of the trust consists of the underlying securities and all monies or other property, if any, received by the trustee. The trust will terminate on December 31, 2040, or earlier if a termination event occurs.
The trust has issued Regional Bank HOLDRS under the depositary trust agreement described in this prospectus under the heading “Description of the Depositary Trust Agreement.” The trust may issue additional Regional Bank HOLDRS on a continuous basis when an investor deposits the requisite underlying securities with the trustee.
You may only acquire, hold, trade and surrender Regional Bank HOLDRS in a round-lot of 100 Regional Bank HOLDRS and round-lot multiples. The trust will only issue Regional Bank HOLDRS upon the deposit of the whole shares of underlying securities that are represented by a round-lot of 100 Regional Bank HOLDRS. In the event of a stock split, reverse stock split or other distribution by the issuer of an underlying security that results in a fractional share becoming represented by a round-lot of Regional Bank HOLDRS, the trust may require a minimum of more than one round-lot of 100 Regional Bank HOLDRS for an issuance so that the trust will always receive whole share amounts for issuance of Regional Bank HOLDRS.
Regional Bank HOLDRS will represent your individual and undivided beneficial ownership interest in the common stock of the specified underlying securities. The companies selected as part of this receipt program are listed above in the section entitled “Highlights of Regional Bank HOLDRS—The Regional Bank HOLDRS.”
Beneficial owners of Regional Bank HOLDRS will have the same rights and privileges as they would have if they beneficially owned the underlying securities in “street name” outside of the trust. These include the right of investors to instruct the trustee to vote the underlying common stock, to attend shareholder’s meetings and to receive dividends and other distributions on the underlying securities, if any are declared and paid to the trustee by an issuer of an underlying security, as well as the right to pledge Regional Bank HOLDRS or cancel Regional Bank HOLDRS to receive the underlying securities. See “Description of the Depositary Trust Agreement.” Regional Bank HOLDRS are not intended to change your beneficial ownership in the underlying securities under United States federal securities laws, including sections 13(d) and 16(a) of the Exchange Act.
The trust will not publish or otherwise calculate the aggregate value of the underlying securities represented by a receipt. Regional Bank HOLDRS may trade in the secondary market at prices that are lower than the aggregate value of the corresponding underlying securities. If, in such case, an owner of Regional Bank HOLDRS wishes to realize the dollar value of the underlying securities, that owner will have to cancel the Regional Bank HOLDRS. Such cancellation will require payment of fees and expenses as described in “Description of the Depositary Trust Agreement—Withdrawal of underlying securities.”
Regional Bank HOLDRS are evidenced by one or more global certificates that the trustee has deposited with DTC and registered in the name of Cede & Co., as nominee for DTC. Regional Bank HOLDRS are available
only in book-entry form. Owners of Regional Bank HOLDRS may hold their Regional Bank HOLDRS through DTC, if they are participants in DTC, or indirectly through entities that are participants in DTC.
Selection criteria. The underlying securities initially included in the Regional Bank HOLDRS were the shares of common stock of a group of specified companies that, at the time of initial selection, were involved in various aspects of the regional banking industry and whose common stock was registered under section 12 of the Exchange Act. The issuers of the underlying securities were, at the time of initial selection, among the largest capitalized and most liquid companies involved in the regional banking industry as measured by market capitalization and trading volume. As a result of a reconstitution event, a distribution of securities by an underlying issuer or other event, the companies whose common stock is included in the Regional Bank HOLDRS may no longer meet the initial selection criteria and may no longer consist exclusively of securities issued by companies involved in the regional banking industry.
Underlying securities. For a list of the underlying securities represented by Regional Bank HOLDRS, please refer to “Highlights of Regional Bank HOLDRS—The Regional Bank HOLDRS.” The underlying securities may change as a result of a reconstitution event, a distribution of securities by an underlying issuer or other event.
No investigation. The trust, the trustee, Merrill Lynch, Pierce, Fenner & Smith Incorporated, and any affiliate of these entities have not performed any investigation or review of the selected companies including the public filings by the companies. Accordingly, before you acquire Regional Bank HOLDRS, you should consider publicly available financial and other information about the issuers of the underlying securities. See “Risk Factors” and “Where You Can Find More Information.” Investors and market participants should not conclude that the inclusion of a company in the list is any form of investment recommendation of that company by the trust, the trustee, Merrill Lynch, Pierce, Fenner & Smith Incorporated or any of their respective affiliates.
General background and historical information. For a brief description of the business of each of the issuers of the underlying securities and monthly pricing information showing the historical performance of each underlying issuer’s securities see “Annex A.”
The following table and graph set forth the composite performance of all of the underlying securities currently represented by a single Regional Bank HOLDR measured at the close of the business day as of the end of each month from January 30, 1998 to February 28, 2011. The performance table and graph data are adjusted for any splits that may have occurred over the measurement period. Past performance of the underlying securities are not necessarily indicative of future values.
1998 | Closing Price | 1999 | Closing Price | 2000 | Closing Price | 2001 | Closing Price | ||||||||||||
| January 30 | 84.82 | January 29 | 103.61 | January 31 | 96.54 | January 31 | 114.19 | ||||||||||||
| February 27 | 93.21 | February 26 | 103.82 | February 29 | 83.95 | February 28 | 106.67 | ||||||||||||
| March 31 | 98.16 | March 31 | 104.88 | March 31 | 99.05 | March 30 | 104.38 | ||||||||||||
| April 30 | 99.80 | April 30 | 111.54 | April 28 | 93.65 | April 30 | 103.91 | ||||||||||||
| May 29 | 96.91 | May 28 | 103.92 | May 31 | 101.73 | May 31 | 108.01 | ||||||||||||
| June 30 | 100.46 | June 30 | 109.96 | June 30 | 89.90 | June 29 | 105.08 | ||||||||||||
| July 31 | 100.94 | July 30 | 101.34 | July 31 | 93.61 | July 31 | 106.93 | ||||||||||||
| August 31 | 77.12 | August 31 | 101.51 | August 31 | 104.96 | August 31 | 102.01 | ||||||||||||
| September 30 | 80.84 | September 30 | 96.19 | September 29 | 104.93 | September 28 | 95.27 | ||||||||||||
| October 30 | 92.10 | October 29 | 111.52 | October 31 | 102.17 | October 31 | 88.68 | ||||||||||||
| November 30 | 95.84 | November 30 | 102.99 | November 30 | 97.57 | November 30 | 95.62 | ||||||||||||
| December 31 | 105.59 | December 31 | 95.22 | December 29 | 110.37 | December 31 | 97.72 | ||||||||||||
2002 | Closing Price | 2003 | Closing Price | 2004 | Closing Price | 2005 | Closing Price | ||||||||||||
| January 31 | 97.84 | January 31 | 84.70 | January 30 | 110.13 | January 31 | 110.81 | ||||||||||||
| February 28 | 95.46 | February 28 | 82.71 | February 27 | 111.78 | February 28 | 109.21 | ||||||||||||
| March 29 | 104.17 | March 31 | 79.17 | March 31 | 109.39 | March 31 | 106.64 | ||||||||||||
| April 30 | 103.77 | April 30 | 88.23 | April 30 | 104.11 | April 29 | 107.63 | ||||||||||||
| May 31 | 103.93 | May 30 | 94.23 | May 28 | 107.69 | May 31 | 109.57 | ||||||||||||
| June 28 | 100.05 | June 30 | 96.55 | June 30 | 107.03 | June 30 | 109.30 | ||||||||||||
| July 31 | 92.12 | July 31 | 98.97 | July 30 | 105.64 | July 29 | 110.82 | ||||||||||||
| August 30 | 95.35 | August 29 | 97.85 | August 31 | 110.22 | August 31 | 108.07 | ||||||||||||
| September 30 | 83.47 | September 30 | 97.30 | September 30 | 109.46 | September 30 | 105.74 | ||||||||||||
| October 31 | 86.81 | October 31 | 105.06 | October 29 | 110.74 | October 31 | 111.19 | ||||||||||||
| November 29 | 88.92 | November 28 | 105.64 | November 30 | 112.74 | November 30 | 114.63 | ||||||||||||
| December 31 | 85.86 | December 31 | 109.91 | December 31 | 115.62 | December 30 | 114.07 | ||||||||||||
2006 | Closing Price | 2007 | Closing Price | 2008 | Closing Price | 2009 | Closing Price | ||||||||||||
| January 31 | 113.99 | January 31 | 133.88 | January 31 | 122.03 | January 30 | 51.44 | ||||||||||||
| February 28 | 118.18 | February 28 | 131.68 | February 29 | 108.73 | February 27 | 43.80 | ||||||||||||
| March 31 | 117.81 | March 30 | 129.83 | March 31 | 108.69 | March 31 | 50.07 | ||||||||||||
| April 28 | 125.16 | April 30 | 133.08 | April 30 | 113.34 | April 30 | 60.35 | ||||||||||||
| May 31 | 120.09 | May 31 | 134.11 | May 30 | 106.51 | May 29 | 68.78 | ||||||||||||
| June 30 | 119.18 | June 29 | 129.00 | June 30 | 85.25 | June 30 | 66.22 | ||||||||||||
| July 31 | 125.70 | July 31 | 120.82 | July 31 | 99.73 | July 31 | 71.48 | ||||||||||||
| August 31 | 125.02 | August 31 | 124.63 | August 29 | 99.37 | August 31 | 79.89 | ||||||||||||
| September 29 | 128.49 | September 28 | 125.03 | September 30 | 109.99 | September 30 | 80.24 | ||||||||||||
| October 31 | 129.58 | October 31 | 125.23 | October 31 | 94.96 | October 30 | 75.72 | ||||||||||||
| November 30 | 128.04 | November 30 | 122.40 | November 28 | 78.91 | November 30 | 78.70 | ||||||||||||
| December 29 | 133.13 | December 31 | 114.41 | December 31 | 75.81 | December 31 | 76.51 | ||||||||||||
2010 | Closing Price | 2011 | Closing Price | ||||||||||||||||
| January 29 | 79.51 | January 31 | 87.57 | ||||||||||||||||
| February 26 | 80.60 | February 28 | 88.72 | ||||||||||||||||
| March 31 | 87.25 | ||||||||||||||||||
| April 30 | 89.52 | ||||||||||||||||||
| May 28 | 80.41 | ||||||||||||||||||
| June 30 | 73.28 | ||||||||||||||||||
| July 30 | 78.12 | ||||||||||||||||||
| August 31 | 69.16 | ||||||||||||||||||
| September 30 | 73.18 | ||||||||||||||||||
| October 29 | 74.80 | ||||||||||||||||||
| November 30 | 74.95 | ||||||||||||||||||
| December 31 | 85.57 | ||||||||||||||||||
General. The depositary trust agreement, dated as of May 18, 2000, as amended and restated on June 21, 2000, among Merrill Lynch, Pierce, Fenner & Smith Incorporated, The Bank of New York Mellon, as trustee, other depositors and the owners of the Regional Bank HOLDRS, provides that Regional Bank HOLDRS will represent an owner’s undivided beneficial ownership interest in the common stock of the underlying companies. The depositary trust agreement was amended on November 22, 2000 to modify the reconstitution events, as described below.
The trustee. The Bank of New York Mellon serves as trustee for Regional Bank HOLDRS. On July 1, 2007, the Bank of New York Company, Inc. and Mellon Financial Corporation merged into The Bank of New York Mellon Corporation or The Bank of New York Mellon. The Bank of New York Mellon, a New York state-chartered banking organization, is a provider of financial services for institutions, corporations and high net-worth individuals, providing asset and wealth management, asset servicing, issuer services, clearing and execution services and treasury services.
Issuance, transfer and surrender of Regional Bank HOLDRS. You may create and cancel Regional Bank HOLDRS only in round-lots of 100 Regional Bank HOLDRS. You may create Regional Bank HOLDRS by delivering to the trustee the requisite underlying securities. The trust will only issue Regional Bank HOLDRS upon the deposit of the whole shares represented by a round-lot of 100 Regional Bank HOLDRS. In the event that a fractional share comes to be represented by a round-lot of Regional Bank HOLDRS, the trust may require a minimum of more than one round-lot of 100 Regional Bank HOLDRS for an issuance so that the trust will always receive whole share amounts for issuance of Regional Bank HOLDRS. Similarly, you must surrender Regional Bank HOLDRS in integral multiples of 100 Regional Bank HOLDRS to withdraw deposited shares from the trust. The trustee will not deliver fractional shares of underlying securities, and to the extent that any cancellation of Regional Bank HOLDRS would otherwise require the delivery of fractional shares, the trust will deliver cash in lieu of such shares. You may request withdrawal of your deposited shares during the trustee’s normal business hours. The trustee expects that in most cases it will deliver your deposited shares within one business day of your withdrawal request.
Voting rights. You will receive proxy soliciting materials provided by issuers of the deposited shares so as to permit you to give the trustee instructions as to how to vote on matters to be considered at any annual or special meetings held by issuers of the underlying securities.
Under the depositary trust agreement, any beneficial owner of Regional Bank HOLDRS, other than Merrill Lynch, Pierce, Fenner & Smith Incorporated, owning Regional Bank HOLDRS for its own proprietary account as principal, will have the right to vote to dissolve and liquidate the trust.
Distributions. You will be entitled to receive, net of trustee fees, distributions of cash, including dividends, securities or property, if any, made with respect to the underlying securities. The trustee will use its reasonable efforts to ensure that it distributes these distributions as promptly as practicable after the date on which it receives the distribution. Therefore, you may receive your distributions substantially later than you would have had you held the underlying securities directly. Any distributions of securities by an issuer of underlying securities will be deposited into the trust and will become part of the Regional Bank HOLDRS unless such securities are not listed for trading on a U.S. national securities exchange or such securities have a different Standard & Poor’s GICS sector classification than any of the underlying securities in the Regional Bank HOLDRS at the time of the distribution of such securities. In addition, if the issuer of underlying securities offers rights to acquire additional underlying securities or other securities, the rights will be distributed to you through the trustee, if practicable, and if the rights and the securities that those rights relate to are exempt from registration or are registered under the Securities Act of 1933, as amended (the “Securities Act”). Otherwise, if practicable, the rights will be disposed of and the net proceeds distributed to you by the trustee. In all other cases, the rights will lapse.
You will be obligated to pay any tax or other charge that may become due with respect to Regional Bank HOLDRS. The trustee may deduct the amount of any tax or other governmental charge from a distribution before making payment to you. In addition, the trustee will deduct its quarterly custody fee of $2.00 for each round-lot of 100 Regional Bank HOLDRS from quarterly dividends, if any, paid to the trustee by the issuers of the underlying securities. With respect to the aggregate custody fee payable in any calendar year for each Regional Bank HOLDR,
the trustee will waive that portion of the fee which exceeds the total cash dividends and other cash distributions received, or to be received, and payable with respect to such calendar year.
Record dates. With respect to dividend payments and voting instructions, the trustee expects to fix the trust’s record dates as close as possible to the record date fixed by the issuer of the underlying securities.
Shareholder communications. The trustee promptly will forward to you all shareholder communications that it receives from issuers of the underlying securities.
Withdrawal of underlying securities. You may surrender your Regional Bank HOLDRS and receive underlying securities during the trustee’s normal business hours and upon the payment of applicable fees, taxes or governmental charges, if any. You should receive your underlying securities no later than the business day after the trustee receives your request. If you surrender Regional Bank HOLDRS in order to receive underlying securities, you will pay to the trustee a cancellation fee of up to $10.00 per round-lot of 100 Regional Bank HOLDRS.
Further issuances of Regional Bank HOLDRS. The depositary trust agreement provides for further issuances of Regional Bank HOLDRS on a continuous basis without your consent.
Reconstitution events. The depositary trust agreement provides for the automatic distribution of underlying securities from Regional Bank HOLDRS to you in the following four circumstances:
| A. | If an issuer of underlying securities no longer has a class of securities registered under section 12 of the Exchange Act, then its securities will no longer be an underlying security and the trustee will distribute the shares of that company to the owners of the Regional Bank HOLDRS. |
| B. | If the SEC finds that an issuer of underlying securities should be registered as an investment company under the Investment Company Act of 1940, and the trustee has actual knowledge of the SEC finding, then the trustee will distribute the shares of that company to the owners of the Regional Bank HOLDRS. |
| C. | If the underlying securities of an issuer cease to be outstanding as a result of a merger, consolidation, corporate combination or other event, the trustee will distribute the consideration paid by and received from the acquiring company to the beneficial owners of Regional Bank HOLDRS; provided that any securities received as consideration will be distributed only if the distributed securities have a different Standard & Poor’s GICS sector classification than any of the underlying securities represented in the Regional Bank HOLDRS at the time of the distribution or exchange or if the securities received are not listed for trading on a U.S. national securities exchange. In any other case, the additional securities received as consideration will be deposited into the trust. |
| D. | If an issuer’s underlying securities are delisted from trading on a U.S. national securities exchange and are not listed for trading on another U.S. national securities exchange within five business days from the date such securities are delisted. |
To the extent a distribution of underlying securities from the Regional Bank HOLDRS is required as a result of a reconstitution event, the trustee will deliver the underlying security to you as promptly as practicable after the date that the trustee has knowledge of the occurrence of a reconstitution event.
As provided in the depositary trust agreement, securities of a new company will be added to the Regional Bank HOLDRS, as a result of a distribution of securities by an underlying issuer, where a corporate event occurs, such as a merger, or where the securities of an underlying issuer are exchanged for the securities of another company, unless the securities received have a different Standard & Poor’s GICS sector classification than any of the underlying securities represented in the Regional Bank HOLDRS or if the securities received are not listed for trading on a U.S. national securities exchange.
It is anticipated that, as a result of the broadly defined Standard & Poor’s GICS sectors, most distributions or exchanges of securities will result in the inclusion of new securities in the Regional Bank HOLDRS. The trustee
will review the Standard & Poor’s GICS sector classifications of securities to determine whether securities received as a result of a distribution by an underlying issuer or as consideration for securities will be included in the Regional Bank HOLDRS or distributed from the Regional Bank HOLDRS to you.
Standard & Poor’s sector classifications. Standard & Poor’s Corporation is an independent source of market information that, among other things, maintains the Global Industry Classification Standard, which classifies the securities of public companies into various sector classifications based upon GICS sectors, which are derived from its own criteria. There are 10 Standard & Poor’s GICS sector classifications and each class of publicly traded securities of a company is given only one GICS sector classification. The securities included in the Regional Bank HOLDRS are currently represented in the Financials GICS sector. The Standard & Poor’s GICS sector classifications of the securities included in the Regional Bank HOLDRS may change over time if the companies that issued these securities change their focus of operations or if Standard & Poor’s alters the criteria it uses to determine GICS sectors, or both.
Termination of the trust. The trust will terminate if the trustee resigns and no successor trustee is appointed by Merrill Lynch, Pierce, Fenner & Smith Incorporated, as initial depositor, within 60 days from the date the trustee provides notice to the initial depositor of its intent to resign. Upon termination, the beneficial owners of Regional Bank HOLDRS will surrender their Regional Bank HOLDRS as provided in the depositary trust agreement, including payment of any fees of the trustee or applicable taxes or governmental charges due in connection with delivery to the owners of the underlying securities. The trust also will terminate if Regional Bank HOLDRS are delisted from the NYSE Arca and are not listed for trading on another U.S. national securities exchange within five business days from the date the Regional Bank HOLDRS are delisted. Finally, the trust will terminate if 75% of the owners of outstanding Regional Bank HOLDRS, other than Merrill Lynch, Pierce, Fenner & Smith Incorporated, vote to dissolve and liquidate the trust.
If a termination event occurs, the trustee will distribute the underlying securities to you as promptly as practicable after the termination event occurs.
Amendment of the depositary trust agreement. The trustee and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as initial depositor, may amend any provisions of the depositary trust agreement without the consent of any other depositor or any of the owners of the Regional Bank HOLDRS. Promptly after the execution of any amendment to the agreement, the trustee must furnish or cause to be furnished written notification of the substance of the amendment to each owner of Regional Bank HOLDRS. Any amendment that imposes or increases any fees or charges, subject to exceptions, or that otherwise prejudices any substantial existing right of the owners of Regional Bank HOLDRS will not become effective until 30 days after notice of the amendment is given to the owners of Regional Bank HOLDRS.
Issuance and cancellation fees. If you wish to create Regional Bank HOLDRS by delivering to the trust the requisite underlying securities represented by a round-lot of 100 Regional Bank HOLDRS, the trustee will charge you an issuance fee of up to $10.00 for each round-lot of 100 Regional Bank HOLDRS. If you wish to cancel your Regional Bank HOLDRS and withdraw your underlying securities, the trustee will charge you a cancellation fee of up to $10.00 for each round-lot of 100 Regional Bank HOLDRS issued. The trustee may negotiate either of these fees depending on the volume, frequency and size of the issuance or cancellation transactions.
Commissions. If you choose to create Regional Bank HOLDRS you will be responsible for paying any sales commissions associated with your purchase of the underlying securities that is charged by your broker, whether it be Merrill Lynch, Pierce, Fenner & Smith Incorporated or another broker, in addition to the issuance fee described above.
Custody fees. The Bank of New York Mellon, as trustee and as custodian, will charge you a quarterly custody fee of $2.00 for each round-lot of 100 Regional Bank HOLDRS to be deducted from any cash dividend payments or other cash distributions on underlying securities received by the trustee. With respect to the aggregate custody fee payable in any calendar year for each Regional Bank HOLDR, the trustee will waive that portion of the fee which exceeds the total cash dividends and other cash distributions received, or to be received, and payable with respect to such calendar year. The trustee cannot recapture unpaid custody fees from prior years.
Address of the trustee. The Bank of New York Mellon, ADR Division, 101 Barclay Street, New York, New York 10286.
Governing law. The depositary trust agreement and the Regional Bank HOLDRS are governed by the laws of the State of New York. The trustee will provide the depositary trust agreement to any owner of the underlying securities free of charge upon written request.
Duties and immunities of the trustee. The trustee assumes no responsibility or liability for, and makes no representations as to, the validity or sufficiency, or as to the accuracy of the recitals, if any, set forth in the Regional Bank HOLDRS.
The trustee has undertaken to perform only those duties as are specifically set forth in the depositary trust agreement. Subject to the preceding sentence, the trustee will be liable for its own negligence or misconduct except for good faith errors in judgment so long as the trustee was not negligent in ascertaining the relevant facts.
General
The following discussion represents the opinion of Shearman & Sterling LLP, our special U.S. federal income tax counsel, as to the principal U.S. federal income tax consequences relating to the Regional Bank HOLDRS for receipt holders. A “U.S. receipt holder” is a receipt holder that is:
| · | an individual who is a citizen or resident of the United States; |
| · | a corporation (or an entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia; |
| · | an estate, the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or |
| · | a trust if either (i) it is subject to the primary supervision of a U.S. court and one or more U.S. persons have the authority to control all substantial decisions of the trust or (ii) it has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person. |
A “non-U.S. receipt holder” is a receipt holder that is an individual, a corporation, an estate or a trust that is neither a U.S. receipt holder nor a partnership (or entity treated as a partnership) for U.S. federal income tax purposes.
If a partnership (or an entity treated as a partnership for U.S. federal income tax purposes) holds Regional Bank HOLDRS, the tax treatment of the partnership and each partner will generally depend on the status of the partner and the activities of the partnership. Partnerships acquiring Regional Bank HOLDRS, and partners in such partnerships, should consult their tax advisors.
This discussion is based upon laws, regulations, rulings and decisions currently in effect, all of which are subject to change or differing interpretations, possibly on a retroactive basis. The discussion does not deal with all U.S. federal income tax consequences applicable to all categories of investors, some of which may be subject to special rules, such as (without limitation) tax-exempt entities, banks, U.S. receipt holders that directly or indirectly own 10% or more of the voting stock of an issuer of the underlying securities, dealers in securities, U.S. receipt holders whose functional currency is not the U.S. dollar, investors who acquire or hold any Regional Bank HOLDRS as part of a conversion transaction, straddle, hedging or other integrated transaction, certain former citizens and residents of the United States and persons subject to U.S. estate, gift or alternative minimum tax. In addition, this discussion generally is limited to investors who will hold the Regional Bank HOLDRS as “capital assets” (generally, property held for investment) within the meaning of section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”). Moreover, this discussion does not address Regional Bank HOLDRS held by a partnership or other flow through entity for U.S. federal income tax purposes. We recommend that you consult with your own tax advisor with regard to the application of the U.S. federal income tax laws to your particular situation as well as any tax consequences arising under the laws of any state, local or non-U.S. jurisdiction.
Taxation of the trust
The trust will provide for flow through tax consequences as it will be treated as a grantor trust or custodial arrangement for U.S. federal income tax purposes.
Taxation of Regional Bank HOLDRS
A U.S. receipt holder purchasing and owning Regional Bank HOLDRS will be treated, for U.S. federal income tax purposes, as directly owning a proportionate share of the underlying securities represented by Regional Bank HOLDRS. Consequently, if there is a taxable cash distribution on an underlying security, a U.S. receipt holder will recognize income with respect to the distribution at the time the distribution is received by the trustee, not at the time that the U.S. receipt holder receives the cash distribution from the trustee.
Qualified dividend income received in respect of Regional Bank HOLDRS by U.S. receipt holders who are individuals, trusts and estates will be eligible for U.S. federal income taxation at preferential rates, which are currently scheduled to expire for taxable years beginning after December 31, 2012. Qualified dividend income includes dividends received from domestic corporations and “qualified foreign corporations,” as such term is defined below under “Special considerations with respect to underlying securities of foreign issuers.” In order for such dividends to qualify for the preferential rates, specific minimum holding period requirements must be met, and for this purpose, a U.S. receipt holder’s holding period with respect to an underlying security may be tolled for any period in which such U.S. receipt holder has diminished its risk of loss in respect of such security by, for example, entering into a hedging transaction. Special rules apply to a U.S. receipt holder who leverages its investment in Regional Bank HOLDRS. U.S. receipt holders that are corporations may be eligible for a dividends-received deduction in respect of dividends received from domestic corporations.
A U.S. receipt holder will determine its initial tax basis in each of the underlying securities by allocating the purchase price for the Regional Bank HOLDRS among the underlying securities based on their relative fair market values at the time of purchase. Similarly, when a U.S. receipt holder sells Regional Bank HOLDRS, it will determine the amount realized with respect to each security by allocating the sales price among the underlying securities based on their relative fair market values at the time of sale. A U.S. receipt holder’s gain or loss with respect to each security will be computed by subtracting its adjusted basis in the security from the amount realized on the security. With respect to purchases of Regional Bank HOLDRS for cash in the secondary market, a U.S. receipt holder’s aggregate tax basis in each of the underlying securities will be equal to the purchase price of the Regional Bank HOLDRS. Similarly, with respect to sales of Regional Bank HOLDRS for cash in the secondary market, the amount realized with respect to a sale of Regional Bank HOLDRS will be equal to the aggregate amount realized with respect to each of the underlying securities.
The distribution of any securities by the trust upon the surrender of Regional Bank HOLDRS, the occurrence of a reconstitution event or a termination event will not be a taxable event, except to the extent that cash is distributed in lieu of fractional shares. Gain or loss with respect to fractional shares shall be computed by allocating a portion of the aggregate tax basis of the distributed securities to such fractional shares. The U.S. receipt holder’s aggregate tax basis with respect to the distributed securities will be the same as when held through the trust, less any tax basis allocated to fractional shares. The U.S. receipt holder’s holding period with respect to the distributed securities will include the period that the U.S. receipt holder held the securities through the trust.
Brokerage fees and custodian fees
The brokerage fee incurred in purchasing a receipt will be treated as part of the cost of the underlying securities. Accordingly, a U.S. receipt holder includes this fee in its tax basis in the underlying securities. A U.S. receipt holder will allocate the brokerage fee among the underlying securities using either a fair market value allocation or pro rata based on the number of shares of each underlying security. Similarly, the brokerage fee incurred in selling Regional Bank HOLDRS will reduce the amount realized with respect to the underlying securities.
A U.S. receipt holder will be required to include in its income the full amount of dividends paid on the underlying securities, even though the depositary trust agreement provides that the custodian fees will be deducted directly from any dividends paid. These custodian fees will be treated as an expense incurred in connection with a U.S. receipt holder’s investment in the underlying securities and may be deductible. If a U.S. receipt holder is an individual, estate or trust, however, the deduction of its share of custodian fees will be a miscellaneous itemized deduction that may be disallowed in whole or in part.
Special considerations with respect to underlying securities of foreign issuers
If any of the underlying securities are securities of foreign issuers, the gross amount of any taxable cash distribution generally will not be eligible for the dividends-received deduction provided to corporations.
Dividends received by certain U.S. receipt holders from an issuer of underlying securities that is a “qualified foreign corporation” will be eligible for U.S. federal income taxation at the preferential rates for dividends mentioned above. A qualified foreign corporation includes:
| · | a foreign corporation that is eligible for the benefits of a comprehensive U.S. income tax treaty, which the Secretary of the Treasury determines to be satisfactory and that includes an exchange of information program; |
| · | a foreign corporation if the stock to which the dividend is paid is readily tradable on an established market in the United States; and |
| · | a corporation that is incorporated in a possession of the United States; |
but will not include a passive foreign investment company (a “PFIC”).
If a foreign issuer pays a dividend in a currency other than in U.S. dollars, the amount of the dividend for U.S. federal income tax purposes will be the U.S. dollar value of the dividend (determined at the spot rate on the date of the payment) regardless of whether the payment is later converted into U.S. dollars. In this case, the U.S. receipt holder may recognize ordinary income or loss as a result of currency fluctuations between the date on which the dividend is paid and the date the dividend amount is converted into U.S. dollars.
Subject to certain conditions and limitations, any foreign income tax withheld on dividends may be deducted from taxable income (provided the U.S. receipt holder does not elect to claim a credit for any foreign income taxes paid or accrued during that taxable year) or credited against a U.S. receipt holder’s U.S. federal income tax liability. Dividends distributed by a foreign issuer generally will constitute “passive category income.” For purposes of the U.S. foreign tax credit limitation, dividends received by a U.S. receipt holder with respect to an underlying security of a foreign issuer generally will be treated as foreign-source income while any gain or loss recognized from the sale of such security generally will be treated as from sources within the United States. Accordingly, if any foreign income taxes are withheld upon the sale of an underlying security of a foreign issuer, the availability of foreign tax credits with respect to such taxes may be limited unless the U.S. receipt holder has other foreign-source income. The rules relating to the determination of the foreign tax credit are complex and we recommend that U.S. receipt holders consult their own tax advisors to determine whether and to what extent a credit would be available.
Dividends and distributions made by a foreign issuer may be subject to a foreign withholding tax. Some foreign issuers may make arrangements through which holders of their American depositary shares or global shares can apply for a refund of withheld taxes. With respect to these issuers, U.S. receipt holders of Regional Bank HOLDRS may be able to use these arrangements to apply for a refund of withheld taxes. In some cases, however, the U.S. receipt holders of Regional Bank HOLDRS may have to apply independently to a foreign tax authority for a refund of withheld taxes.
Furthermore, special U.S. federal income tax rules apply to U.S. persons owning shares of a PFIC. The initial depositor and the trustee do not undertake to review, periodically or otherwise, or make inquiries regarding the PFIC status of the underlying issuers or to notify the U.S. receipt holders of such status, and no assurances can be made that the applicable tax law or other relevant circumstances will not change in a manner that affects the PFIC determination. A foreign corporation generally will be classified as a PFIC for U.S. federal income tax purposes in any taxable year in which, after applying relevant look-through rules, either:
| · | at least 75% of its gross income is “passive income,” or |
| · | on average at least 50% of the gross value of its assets is attributable to assets that produce “passive income” or are held for the production of passive income. |
Passive income for this purpose generally includes, among other things, dividends, interest, royalties, rents and gains from commodities and securities transactions.
If a corporation were classified as a PFIC, a U.S. receipt holder could be subject to increased tax liability, possibly including an interest charge, upon the sale or other disposition of the Regional Bank HOLDRS or of the underlying securities or upon the receipt of “excess distributions.” To avoid the interest charge provisions described in the preceding sentence, a U.S. receipt holder may be able to make one of certain elections (to the extent available under specific rules and, if applicable, the underlying issuer provides certain requisite information) including an
election to be taxed currently on its pro rata portion of the corporation’s income. If such an election were made, a U.S. receipt holder would be required to include its pro rata share of the corporation’s income whether or not the income was distributed in the form of dividends or otherwise.
U.S. receipt holders also generally would be required to file Internal Revenue Service (“IRS”) Form 8621 in any year in which at least one of the underlying issuers is classified as a PFIC. U.S. receipt holders should also be aware that recently enacted legislation may broaden the current IRS Form 8621 filing requirements or impose an additional annual filing requirement for U.S. persons owning shares of a PFIC. The legislation does not describe what information would be required to be included in either situation, but grants the Secretary of the Treasury Department power to make this determination. U.S. receipt holders should consult their independent tax advisors regarding the application of the PFIC rules to their purchase, ownership and disposition of the Regional Bank HOLDRS, including the availability and advisability of making any elections thereunder and the application of the recently enacted legislation to their particular situations.
Non-U.S. receipt holders
A non-U.S. receipt holder generally will be subject to U.S. withholding tax at a rate of 30% or a lower rate as may be specified by an applicable tax treaty with respect to dividends received on underlying securities of U.S. issuers. A non-U.S. receipt holder who wishes to claim a reduction in withholding under the benefit of an applicable tax treaty must comply with certification requirements. However, if that income is effectively connected with a U.S. trade or business conducted by the non-U.S. receipt holder or, where a tax treaty applies, is attributable to a permanent establishment maintained in the United States by the non-U.S. receipt holder, then those dividends will be exempt from withholding tax, provided the non-U.S. receipt holder complies with applicable certification requirements.
A non-U.S. receipt holder generally will not be subject to U.S. federal income or withholding tax with respect to dividends received on any underlying securities of a foreign issuer, unless that income is effectively connected with a U.S. trade or business conducted by the non-U.S. receipt holder or, where a tax treaty applies, is attributable to a permanent establishment maintained in the United States by the non-U.S. receipt holder.
With respect to dividends of U.S. and any foreign issuers, a non-U.S. receipt holder’s dividends that are effectively connected with a U.S. trade or business or, where a tax treaty applies, dividends attributable to a U.S. permanent establishment generally will be subject to U.S. federal income taxation on a net income basis at the same graduated rates applicable to U.S. persons. In addition to this graduated tax, effectively connected dividends or, where a tax treaty applies, dividends attributable to a U.S. permanent establishment received by a corporate non-U.S. receipt holder may also be subject to a branch profits tax at a rate of 30% or a lower rate as may be specified by an applicable tax treaty. Under some circumstances, a corporate non-U.S. receipt holder whose dividends are effectively connected or attributable to a U.S. permanent establishment may be entitled to a dividends-received deduction equal to 70% or 80% of the amount of the dividend.
A non-U.S. receipt holder that is eligible for a reduced rate of withholding tax pursuant to a tax treaty may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS.
A non-U.S. receipt holder generally will not be subject to U.S. federal income or withholding tax with respect to gain recognized upon the sale or other disposition of Regional Bank HOLDRS or of the underlying securities unless:
| · | in the case of any gain realized by an individual non-U.S. receipt holder, the non-U.S. receipt holder is present in the United States for 183 days or more in the taxable year of the sale or other disposition and certain other conditions are met; |
| · | that gain is effectively connected with a U.S. trade or business conducted by the non-U.S. receipt holder or, where a tax treaty applies, is attributable to a permanent establishment maintained in the United States by the non-U.S. receipt holder; or |
| · | the underlying securities issuer is or has been a U.S. real property holding corporation for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of the disposition or the period during which the non-U.S. receipt holder held the common stock of such issuer and (a) the common stock is not considered to be “regularly traded on an established securities market” or (b) the non-U.S. receipt holder owned, actually or constructively, at any time during the shorter of the periods described above, more than five percent of the common stock of such issuer. It is expected that the underlying securities are currently “regularly traded on an established securities market” although no assurances can be made that the securities will continue to be so traded. |
A non-U.S. receipt holder described in the first bullet point above will be subject to U.S. federal income tax with respect to such gain at a rate of 30% (or lower applicable treaty rate), which gain may be offset by certain losses. A non-U.S. receipt holder described in the second or third bullet points above will be subject to U.S. federal income tax with respect to such gain on a net income basis at the applicable graduated individual or corporate rates (and, in the case of a corporate non-U.S. receipt holder, may also be subject to a 30% branch profits tax, subject to reduction by an applicable income tax treaty).
Backup withholding and information reporting
Information returns will be filed with the IRS in connection with dividend payments made with respect to the underlying securities, or the proceeds of the sale or other disposition of the Regional Bank HOLDRS (or the underlying securities). If you are a U.S. receipt holder, you will be subject to U.S. backup withholding tax at the applicable rate on these payments unless you are an exempt holder or provide your taxpayer identification number to the paying agent and comply with certain certification procedures. If you are a non-U.S. receipt holder, you may have to comply with certification procedures to establish that you are not a U.S. person in order to avoid the information reporting and backup withholding tax requirements. However, payments of dividends to non-U.S. receipt holders will be reported to the IRS even if such payments are not otherwise subject to the information reporting requirements.
The amount of any backup withholding from a payment to you will be allowed as a credit against your U.S. federal income tax liability and may entitle you to a refund, provided that the required information is furnished to the IRS on a timely basis.
In addition, U.S. receipt holders should be aware that recently enacted legislation imposes new reporting requirements with respect to the holding of certain foreign financial assets, including stock of foreign issuers which is not held in an account maintained by certain financial institutions, if the aggregate value of all of such assets exceeds U.S. $50,000. Similarly, non-U.S. receipt holders should be aware of recent legislation that, beginning on January 1, 2013, would impose a 30% withholding tax on certain payments (which could include dividends on and gross proceeds from the sale or other disposition of shares of stock of a U.S. issuer) made to a non-U.S. entity that fails to disclose the identity of its direct or indirect “substantial United States owners’’ or to certify that it has no such owners. Various exceptions are provided under the legislation and additional exceptions may be provided by subsequent guidance. Receipt holders should consult their independent tax advisors regarding the potential application and impact of these new requirements to their purchase, ownership and disposition of the Regional Bank HOLDRS based upon their particular situations. The preceding discussion does not address all aspects of U.S. federal income taxation that may be relevant in light of a receipt holder’s or an issuer’s particular facts and circumstances. We recommend that investors consult their own tax advisors.
Any plan fiduciary which proposes to have a plan acquire Regional Bank HOLDRS should consult with its counsel with respect to the potential applicability of the prohibited transaction provisions of Section 406 of the Employee Retirement Income Security Act of 1974, as amended, and Section 4975 of the Code to this investment, and whether any exemption would be applicable and determine on its own whether all conditions have been satisfied. Moreover, each plan fiduciary should determine whether, under the general fiduciary standards of investment prudence and diversification, an acquisition of Regional Bank HOLDRS is appropriate for the plan, taking into account the overall investment policy of the plan and the composition of the plan’s investment portfolio.
In accordance with the depositary trust agreement, the trust issued Regional Bank HOLDRS to Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Merrill Lynch, Pierce, Fenner & Smith Incorporated has deposited the underlying securities to receive Regional Bank HOLDRS. The trust delivered the initial distribution of Regional Bank HOLDRS against deposit of the underlying securities in New York, New York on approximately January 17, 2001.
Investors who purchase Regional Bank HOLDRS through a fee-based brokerage account will pay fees charged by the brokerage account. We recommend that investors review the terms of their brokerage accounts for details on applicable charges.
Merrill Lynch, Pierce, Fenner & Smith Incorporated has from time to time provided investment banking and other financial services to some of the issuers of the underlying securities and expects in the future to provide these services, for which they have received and will receive customary fees and commissions. Merrill Lynch, Pierce, Fenner & Smith Incorporated also may have served as counterparty in other transactions with some of the issuers of the underlying securities.
Merrill Lynch, Pierce, Fenner & Smith Incorporated has used and may continue to use this prospectus, as updated from time to time, in connection with offers and sales related to market-making transactions in the Regional Bank HOLDRS. Merrill Lynch, Pierce, Fenner & Smith Incorporated may act as principal or agent in these transactions. Market-making sales will be made at prices related to prevailing market prices at the time of sale.
Merrill Lynch, Pierce, Fenner & Smith Incorporated has agreed to indemnify the trustee against some civil liabilities related to acts performed or not performed by the trustee in accordance with the depositary trust agreement or periodic reports filed or not filed with the SEC with respect to the Regional Bank HOLDRS. Should a court determine not to enforce the indemnification provision, Merrill Lynch, Pierce, Fenner & Smith Incorporated also has agreed to contribute to payments the trustee may be required to make with respect to these liabilities.
Legal matters, including the validity of the Regional Bank HOLDRS, were passed upon for Merrill Lynch, Pierce, Fenner & Smith Incorporated, the initial depositor and the underwriter in connection with the initial offering of Regional Bank HOLDRS, by Shearman & Sterling LLP, New York, New York. Shearman & Sterling LLP, as special U.S. tax counsel to the trust, also rendered an opinion regarding the material U.S. federal income tax consequences relating to the Regional Bank HOLDRS.
Merrill Lynch, Pierce, Fenner & Smith Incorporated has filed a registration statement on Form S-1 with the SEC covering the Regional Bank HOLDRS. While this prospectus is a part of the registration statement, it does not contain all the exhibits filed as part of the registration statement. You should review the full text of those exhibits.
The registration statement is available over the Internet at the SEC’s Web site at http://www.sec.gov. You also may read and copy the registration statement at the SEC’s public reference rooms at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for more information on the public reference
rooms and their copy charges. Merrill Lynch, Pierce, Fenner & Smith Incorporated will not file any reports pursuant to the Exchange Act. The trust will file modified reports pursuant to the Exchange Act.
Since the securities of the issuers of the underlying securities are registered under the Exchange Act, the issuers of the underlying securities are required to file periodically financial and other information specified by the SEC.
For more information about the issuers of the underlying securities, information provided to or filed with the SEC by the issuers of the underlying securities with respect to their registered securities can be inspected at the SEC’s public reference facilities or accessed through the SEC’s Web site referenced above. However, some of the issuers of the underlying securities may be considered foreign issuers. The requirements for filing periodic financial and other information for foreign issuers differ from that of domestic issuers. In particular, foreign issuers are not required to file quarterly reports with the SEC and are not required to file periodic financial and other information on EDGAR. Therefore, this information may not be accessible through the SEC’s Web site. Information regarding the issuers of the underlying securities may also be obtained from other sources including, but not limited to, press releases, newspaper articles and other publicly disseminated information.
The trust and Merrill Lynch, Pierce, Fenner & Smith Incorporated and its affiliates are not affiliated with the issuers of the underlying securities, and the issuers of the underlying securities have no obligations with respect to Regional Bank HOLDRS. This prospectus relates only to Regional Bank HOLDRS and does not relate to the other securities of the issuers of the underlying securities. The information in this prospectus regarding the issuers of the underlying securities has been derived from the publicly available documents described in the preceding paragraph. We have not participated in the preparation of these documents or made any due diligence inquiries with respect to the issuers of the underlying securities in connection with Regional Bank HOLDRS. We make no representation that these publicly available documents or any other publicly available information regarding the issuers of the underlying securities are accurate or complete. Furthermore, we cannot assure you that all events occurring prior to the date of this prospectus, including events that would affect the accuracy or completeness of the publicly available documents described in the preceding paragraph, that would affect the trading price of the securities of the issuers of the underlying securities, and therefore the offering and trading prices of the Regional Bank HOLDRS have been publicly disclosed.
ANNEX A
This annex forms an integral part of the prospectus. The following information regarding the underlying securities was derived from publicly available information released by third-party sources. None of this information was prepared by us or our affiliates or on our or our affiliates’ behalf and none of Merrill, Lynch, Pierce, Fenner & Smith Incorporated, the Bank of New York Mellon or any of their respective affiliates assumes any responsibility for the accuracy or completeness of such information.
The following tables provide a brief description of the business of each of the issuers of the underlying securities and set forth the split-adjusted closing market prices, as reported on the applicable primary U.S. trading market, of each of the underlying securities in each month during 2006, 2007, 2008, 2009 and 2010 through to February 28, 2011. The historical prices of the underlying securities should not be taken as an indication of future performance.
BANK OF AMERICA CORPORATION (BAC)
Bank of America Corporation, a financial holding company, provides banking and nonbanking financial services and products to individuals, small- and middle-market businesses, large corporations, and governments in the United States and internationally. The company’s Deposits segment generates savings accounts, money market savings accounts, certificate of deposits, and checking accounts; and Global Card Services segment provides the U.S. consumer and business card, consumer lending, international card and debit card services. Its Home Loans & Insurance segment offers consumer real estate products and services, including mortgage loans, reverse mortgages, home equity lines of credit, and home equity loans. It also provides property, disability, and credit insurance. The company’s Global Commercial Banking segment offers lending products, including commercial loans and commitment facilities, real estate lending, leasing, trade finance, short-term credit, asset-based lending, and indirect consumer loans; and capital management and treasury solutions, such as treasury management, foreign exchange, and short-term investing options. Its Global Banking & Markets segment provides financial products, advisory services, settlement, and custody services; debt and equity underwriting and distribution, merger-related advisory services, and risk management products; and integrated working capital management and treasury solutions. The company’s Global Wealth & Investment Management segment offers investment and brokerage services, estate management, financial planning services, fiduciary management, credit and banking expertise, and asset management products.
2006 | Closing Price | 2007 | Closing Price | 2008 | Closing Price | 2009 | Closing Price | 2010 | Closing Price | 2011 | Closing Price | ||||||||||||||||||
| January | 44.23 | January | 52.58 | January | 44.15 | January | 6.58 | January | 15.18 | January | 13.73 | ||||||||||||||||||
| February | 45.85 | February | 50.83 | February | 39.74 | February | 3.95 | February | 16.66 | February | 14.29 | ||||||||||||||||||
| March | 45.54 | March | 51.02 | March | 37.91 | March | 6.82 | March | 17.85 | ||||||||||||||||||||
| April | 49.92 | April | 50.90 | April | 37.54 | April | 8.93 | April | 17.83 | ||||||||||||||||||||
| May | 48.40 | May | 50.71 | May | 34.01 | May | 11.27 | May | 15.74 | ||||||||||||||||||||
| June | 48.10 | June | 48.89 | June | 23.87 | June | 13.20 | June | 14.37 | ||||||||||||||||||||
| July | 51.53 | July | 47.42 | July | 32.90 | July | 14.79 | July | 14.04 | ||||||||||||||||||||
| August | 51.47 | August | 50.68 | August | 31.14 | August | 17.59 | August | 12.46 | ||||||||||||||||||||
| September | 53.57 | September | 50.27 | September | 35.00 | September | 16.92 | September | 13.10 | ||||||||||||||||||||
| October | 53.87 | October | 48.28 | October | 24.17 | October | 14.58 | October | 11.45 | ||||||||||||||||||||
| November | 53.85 | November | 46.13 | November | 16.25 | November | 15.85 | November | 10.95 | ||||||||||||||||||||
| December | 53.39 | December | 41.26 | December | 14.08 | December | 15.06 | December | 13.34 | ||||||||||||||||||||
THE BANK OF NEW YORK MELLON CORPORATION (BK)
The Bank of New York Mellon Corporation, a financial services company, provides various products and services for institutions and individuals worldwide. The company’s Asset Management segment offers a range of equity, fixed income, cash, and alternative/overlay products, as well as distributes investment management products. Its Wealth Management segment provides investment management, wealth and estate planning, and private banking solutions to high-net-worth individuals, families, endowments, and foundations and related entities. The company’s Asset Servicing segment offers global custody and fund services, securities lending, global liquidity services, outsourcing, government securities clearance, collateral management, and credit-related services to corporate and public retirement funds, foundations and endowments, and global financial institutions. Its Issuer Services segment provides a range of products and services to fixed income and equity issuers, including corporate trust, depositary receipts, employee investment plan services, and shareowner services. The company’s Clearing Services segment offers operational support; trading services; flexible technology; and various investment solutions, including managed accounts, mutual funds and cash management, practice management support, and service excellence to financial intermediaries, broker-dealers, independent registered investment advisors, and hedge fund managers. Its Treasury Services segment includes cash management solutions, trade finance services, international payment services, global markets, capital markets, and liquidity services.
2006 | Closing Price | 2007 | Closing Price | 2008 | Closing Price | 2009 | Closing Price | 2010 | Closing Price | 2011 | Closing Price | ||||||||||||||||||
| January | 33.72 | January | 42.41 | January | 46.52 | January | 25.74 | January | 29.09 | January | 31.23 | ||||||||||||||||||
| February | 36.29 | February | 43.07 | February | 43.87 | February | 22.17 | February | 28.52 | February | 30.39 | ||||||||||||||||||
| March | 38.20 | March | 42.98 | March | 41.73 | March | 28.25 | March | 30.88 | ||||||||||||||||||||
| April | 37.26 | April | 42.91 | April | 43.53 | April | 25.48 | April | 31.13 | ||||||||||||||||||||
| May | 35.22 | May | 42.99 | May | 44.53 | May | 27.78 | May | 27.20 | ||||||||||||||||||||
| June | 34.13 | June | 43.93 | June | 37.83 | June | 29.31 | June | 24.69 | ||||||||||||||||||||
| July | 35.63 | July* | 42.55 | July | 35.50 | July | 27.34 | July | 25.07 | ||||||||||||||||||||
| August | 35.77 | August | 40.43 | August | 34.61 | August | 29.61 | August | 24.26 | ||||||||||||||||||||
| September | 37.38 | September | 44.14 | September | 32.58 | September | 28.99 | September | 26.13 | ||||||||||||||||||||
| October | 36.43 | October | 48.85 | October | 32.99 | October | 26.66 | October | 25.06 | ||||||||||||||||||||
| November | 37.67 | November | 47.96 | November | 30.21 | November | 26.64 | November | 26.99 | ||||||||||||||||||||
| December | 41.73 | December | 48.76 | December | 28.33 | December | 27.97 | December | 30.20 | ||||||||||||||||||||
*As a result of the merger of Mellon Financial (NYSE ticker: “MEL”) and The Bank of New York Mellon (NYSE ticker: “BK”), The Bank of New York Mellon Corporation replaced Mellon Financial as an underlying security of the Regional Bank HOLDRS Trust. The closing prices prior to July 2, 2007 reflect those of Mellon Financial.
BB&T CORPORATION (BBT)
BB&T Corporation operates as the financial holding company for Branch Banking and Trust Company that provides banking and trust services to small and mid-size businesses, public agencies, local governments, and individuals in the United States. It accepts various deposit products, including noninterest-bearing checking accounts, interest-bearing checking accounts, savings accounts, money rate savings accounts, certificates of deposit, and individual retirement accounts. The company’s loan portfolio includes commercial, financial, and agricultural loans; real estate construction and land development, and mortgage loans; and consumer loans. BB&T Corporation, through its other subsidiaries, offers bankcard lending, consumer finance, home equity lending, home mortgage lending, insurance, investment brokerage services, payment solutions, sales finance, small business lending, and wealth management/private banking services to retail clients; and asset management, association services, capital markets services, commercial finance, commercial middle market lending, commercial mortgage lending, institutional trust services, insurance, insurance premium finance, international banking services, leasing, merchant services, mortgage warehouse lending, real estate lending, supply chain management, and venture capital services to commercial clients.
2006 | Closing Price | 2007 | Closing Price | 2008 | Closing Price | 2009 | Closing Price | 2010 | Closing Price | 2011 | Closing Price | ||||||||||||||||||
| January | 39.04 | January | 42.26 | January | 36.22 | January | 19.79 | January | 27.87 | January | 27.64 | ||||||||||||||||||
| February | 39.53 | February | 42.45 | February | 31.13 | February | 16.13 | February | 28.53 | February | 27.60 | ||||||||||||||||||
| March | 39.20 | March | 41.02 | March | 32.06 | March | 16.92 | March | 32.39 | ||||||||||||||||||||
| April | 42.94 | April | 41.62 | April | 34.29 | April | 23.34 | April | 33.24 | ||||||||||||||||||||
| May | 41.57 | May | 42.11 | May | 31.47 | May | 22.42 | May | 30.24 | ||||||||||||||||||||
| June | 41.59 | June | 40.68 | June | 22.77 | June | 21.98 | June | 26.31 | ||||||||||||||||||||
| July | 41.99 | July | 37.42 | July | 28.02 | July | 22.88 | July | 24.83 | ||||||||||||||||||||
| August | 42.80 | August | 39.73 | August | 30.00 | August | 27.94 | August | 22.12 | ||||||||||||||||||||
| September | 43.78 | September | 40.39 | September | 37.80 | September | 27.24 | September | 24.08 | ||||||||||||||||||||
| October | 43.52 | October | 36.97 | October | 35.85 | October | 23.91 | October | 23.41 | ||||||||||||||||||||
| November | 43.01 | November | 36.08 | November | 29.97 | November | 24.90 | November | 23.20 | ||||||||||||||||||||
| December | 43.93 | December | 30.67 | December | 27.46 | December | 25.37 | December | 26.29 | ||||||||||||||||||||
COMERICA INCORPORATED (CMA)
Comerica Incorporated, through its subsidiaries, provides financial products and services in the Midwest, Western, Texas, and Florida. The company’s Business Bank segment comprises middle market, commercial real estate, national dealer services, international finance, global corporate, leasing, financial services, and technology and life sciences businesses. This segment offers commercial loans and lines of credit, deposits, cash management, capital market products, international trade finance, letters of credit, foreign exchange management services, and loan syndication services to medium-size businesses, multinational corporations, and governmental entities. Its Retail Bank segment offers small business banking and personal financial services, including consumer lending, consumer deposit gathering, and mortgage loan origination. This segment also provides consumer products, including deposit accounts, installment loans, credit cards, student loans, home equity loans and lines of credit, and residential mortgage loans to small business customers. The company’s Wealth and Institutional Management segment offers products and services consisting of fiduciary services, private banking, retirement services, investment management and advisory services, investment banking, and discount securities brokerage services. This segment also sells annuity products, as well as life, disability, and long-term care insurance products.
2006 | Closing Price | 2007 | Closing Price | 2008 | Closing Price | 2009 | Closing Price | 2010 | Closing Price | 2011 | Closing Price | ||||||||||||||||||
| January | 55.47 | January | 59.30 | January | 43.56 | January | 16.66 | January | 34.51 | January | 38.20 | ||||||||||||||||||
| February | 57.32 | February | 60.39 | February | 36.24 | February | 15.01 | February | 36.08 | February | 38.90 | ||||||||||||||||||
| March | 57.97 | March | 59.12 | March | 35.08 | March | 18.31 | March | 38.04 | ||||||||||||||||||||
| April | 56.87 | April | 61.91 | April | 34.73 | April | 20.98 | April | 42.00 | ||||||||||||||||||||
| May | 54.75 | May | 62.83 | May | 37.18 | May | 21.68 | May | 38.10 | ||||||||||||||||||||
| June | 51.99 | June | 59.47 | June | 25.63 | June | 21.15 | June | 36.83 | ||||||||||||||||||||
| July | 58.55 | July | 52.66 | July | 28.72 | July | 23.84 | July | 38.36 | ||||||||||||||||||||
| August | 57.25 | August | 55.78 | August | 28.09 | August | 26.67 | August | 34.41 | ||||||||||||||||||||
| September | 56.92 | September | 51.28 | September | 32.79 | September | 29.67 | September | 37.15 | ||||||||||||||||||||
| October | 58.19 | October | 46.68 | October | 27.59 | October | 27.75 | October | 35.78 | ||||||||||||||||||||
| November | 58.25 | November | 45.78 | November | 22.55 | November | 28.47 | November | 36.49 | ||||||||||||||||||||
| December | 58.68 | December | 43.53 | December | 19.85 | December | 29.57 | December | 42.24 | ||||||||||||||||||||
FIFTH THIRD BANCORP (FITB)
Fifth Third Bancorp operates as a diversified financial services holding company. The company’s Commercial Banking segment offers banking, cash management, and financial services; traditional lending and depository products and services; and other services, including foreign exchange and international trade finance, derivatives and capital markets services, asset-based lending, real estate finance, public finance, commercial leasing, and syndicated finance for business, government, and professional customers. Its Branch Banking segment provides deposit and loan, and lease products to individuals and corporations. Its products include checking and savings accounts, home equity loans and lines of credit, credit cards, and loans for automobile and personal financing needs. The company’s Consumer Lending segment involves in mortgage and home equity lending activities, such as origination, retention, and servicing of mortgage and home equity loans; and other indirect lending activities, which include loans to consumers through mortgage brokers, automobile dealers, and federal and private student education loans. Its Investment Advisors segment offers investment alternatives for individuals, companies, and not-for-profit organizations. It offers retail brokerage services to individual clients, and broker dealer services to the institutional marketplace. This segment also provides asset management services; holistic strategies to affluent clients in wealth planning, investing, insurance, and wealth protection; and advisory services for institutional clients, as well as advises the company’s proprietary family of mutual funds.
2006 | Closing Price | 2007 | Closing Price | 2008 | Closing Price | 2009 | Closing Price | 2010 | Closing Price | 2011 | Closing Price | ||||||||||||||||||
| January | 37.57 | January | 39.90 | January | 27.10 | January | 2.39 | January | 12.44 | January | 14.87 | ||||||||||||||||||
| February | 38.65 | February | 40.28 | February | 22.90 | February | 2.11 | February | 12.21 | February | 14.60 | ||||||||||||||||||
| March | 39.36 | March | 38.69 | March | 20.92 | March | 2.92 | March | 13.56 | ||||||||||||||||||||
| April | 40.42 | April | 40.59 | April | 21.43 | April | 4.10 | April | 14.92 | ||||||||||||||||||||
| May | 38.00 | May | 42.36 | May | 18.70 | May | 6.90 | May | 13.00 | ||||||||||||||||||||
| June | 36.95 | June | 39.77 | June | 10.18 | June | 7.10 | June | 12.29 | ||||||||||||||||||||
| July | 38.14 | July | 36.89 | July | 13.97 | July | 9.50 | July | 12.71 | ||||||||||||||||||||
| August | 39.34 | August | 35.69 | August | 15.78 | August | 10.94 | August | 11.04 | ||||||||||||||||||||
| September | 38.08 | September | 33.88 | September | 11.90 | September | 10.13 | September | 12.03 | ||||||||||||||||||||
| October | 39.85 | October | 31.28 | October | 10.85 | October | 8.94 | October | 12.56 | ||||||||||||||||||||
| November | 39.43 | November | 29.91 | November | 9.56 | November | 10.08 | November | 11.95 | ||||||||||||||||||||
| December | 40.93 | December | 25.13 | December | 8.26 | December | 9.75 | December | 14.68 | ||||||||||||||||||||
JPMORGAN CHASE & CO. (JPM)
JPMorgan Chase & Co., a financial holding company, provides various financial services worldwide. The company’s Investment Bank segment provides investment banking products and services, including advising on corporate strategy and structure, capital raising in equity and debt markets, risk management, market-making in cash securities and derivative instruments, and prime brokerage and research. This segment serves corporations, financial institutions, governments, and institutional investors. Its Commercial Banking segment provides lending, treasury services, investment banking, and asset management services to corporations, municipalities, financial institutions, and not-for-profit entities. The company’s Treasury and Securities Services segment offers transaction, investment, and information services. It also offers cash management, trade, wholesale card, and liquidity products and services to small and mid-sized companies, multinational corporations, financial institutions, and government entities. Its Asset Management segment provides investment and wealth management services to institutions, retail investors, and high-net-worth individuals. It also offers global investment management in equities, fixed income, real estate, hedge funds, private equity, and liquidity products, including money market instruments and bank deposits; and trust and estate, banking, and brokerage services, as well as retirement services. The company’s Retail Financial Services segment offers retail banking and consumer lending services that include checking and savings accounts, mortgages, home equity and business loans, and investments through ATMs, online banking, and telephone banking, as well as auto dealerships and school financial-aid offices. Its Card Services segment issues credit cards and processes various credit card payments.
2006 | Closing Price | 2007 | Closing Price | 2008 | Closing Price | 2009 | Closing Price | 2010 | Closing Price | 2011 | Closing Price | ||||||||||||||||||
| January | 39.75 | January | 50.93 | January | 47.40 | January | 25.51 | January | 38.94 | January | 44.94 | ||||||||||||||||||
| February | 41.14 | February | 49.39 | February | 40.65 | February | 22.85 | February | 41.97 | February | 46.69 | ||||||||||||||||||
| March | 41.64 | March | 48.38 | March | 42.95 | March | 26.58 | March | 44.75 | ||||||||||||||||||||
| April | 45.38 | April | 52.10 | April | 47.65 | April | 33.00 | April | 42.58 | ||||||||||||||||||||
| May | 42.64 | May | 51.83 | May | 43.00 | May | 36.90 | May | 39.58 | ||||||||||||||||||||
| June | 42.00 | June | 48.45 | June | 34.31 | June | 34.11 | June | 36.61 | ||||||||||||||||||||
| July | 45.62 | July | 44.01 | July | 40.63 | July | 38.65 | July | 40.28 | ||||||||||||||||||||
| August | 45.66 | August | 44.52 | August | 38.49 | August | 43.46 | August | 36.36 | ||||||||||||||||||||
| September | 46.96 | September | 45.82 | September | 46.70 | September | 43.82 | September | 38.06 | ||||||||||||||||||||
| October | 47.44 | October | 47.00 | October | 41.25 | October | 41.77 | October | 37.63 | ||||||||||||||||||||
| November | 46.28 | November | 45.62 | November | 31.66 | November | 42.49 | November | 37.40 | ||||||||||||||||||||
| December | 48.30 | December | 43.65 | December | 31.53 | December | 41.67 | December | 42.42 | ||||||||||||||||||||
KEYCORP (KEY)
KeyCorp operates as a holding company for KeyBank National Association that provides various banking services in the United States. The company operates in Community Banking and National Banking divisions. The Community Banking division provides regional banking services, including deposit and investment products; personal finance services and loans comprising residential mortgages, home equity, and installment loans; deposits, investment and credit products, and business advisory services to small businesses; and financial, estate and retirement planning, and asset management services to high-net-worth clients. This division also provides commercial banking products and services, such as commercial lending, cash management, equipment leasing, investment and employee benefit programs, succession planning, access to capital markets, and derivatives and foreign exchange to mid size businesses. The National Banking division offers real estate capital and corporate banking services. Its real estate capital banking services include construction and interim lending, permanent debt placements and servicing, equity and investment banking, and other commercial banking products and services to developers, brokers, and owner-investors. This division’s corporate banking services comprise cash management, interest rate derivatives, and foreign exchange products and services. It also offers commercial lending, treasury management, derivatives, foreign exchange, equity and debt underwriting and trading, and syndicated finance products and services, as well as provides equipment financing services. KeyCorp also offers personal and corporate trust services, principal investing, community development financing, securities brokerage, and merchant services.
2006 | Closing Price | 2007 | Closing Price | 2008 | Closing Price | 2009 | Closing Price | 2010 | Closing Price | 2011 | Closing Price | ||||||||||||||||||
| January | 35.39 | January | 38.17 | January | 26.14 | January | 7.28 | January | 7.18 | January | 8.90 | ||||||||||||||||||
| February | 37.27 | February | 37.72 | February | 22.05 | February | 7.01 | February | 7.15 | February | 9.14 | ||||||||||||||||||
| March | 36.80 | March | 37.47 | March | 21.95 | March | 7.87 | March | 7.75 | ||||||||||||||||||||
| April | 38.22 | April | 35.68 | April | 24.13 | April | 6.15 | April | 9.02 | ||||||||||||||||||||
| May | 35.72 | May | 35.61 | May | 19.47 | May | 5.00 | May | 8.02 | ||||||||||||||||||||
| June | 35.68 | June | 34.33 | June | 10.98 | June | 5.24 | June | 7.69 | ||||||||||||||||||||
| July | 36.90 | July | 34.69 | July | 10.55 | July | 5.78 | July | 8.46 | ||||||||||||||||||||
| August | 36.79 | August | 33.30 | August | 12.01 | August | 6.66 | August | 7.37 | ||||||||||||||||||||
| September | 37.44 | September | 32.33 | September | 11.94 | September | 6.50 | September | 7.96 | ||||||||||||||||||||
| October | 37.14 | October | 28.45 | October | 12.41 | October | 5.39 | October | 8.20 | ||||||||||||||||||||
| November | 36.10 | November | 26.34 | November | 9.38 | November | 5.86 | November | 7.53 | ||||||||||||||||||||
| December | 38.03 | December | 23.45 | December | 8.52 | December | 5.55 | December | 8.85 | ||||||||||||||||||||
MARSHALL & ILSLEY CORPORATION (MI)
Marshall & Ilsley Corporation, through its subsidiaries, provides diversified financial services to corporate, institutional, government, and individual customers in the United States. Its Commercial Banking segment provides various products and services, including secured and unsecured loans and lines of credit, letters of credit, asset-based lending, equipment financing, mezzanine financing, global trade services, treasury management, demand deposit accounts, interest bearing accounts, and time deposits, as well as construction loans for commercial and residential development, and land acquisition and development loans. The company’s Community Banking segment provides consumer and business banking products and services comprising loan and deposit products, such as mortgages, home equity loans and lines, credit cards, student loans, personal lines of credit and term loans, demand deposit accounts, interest bearing transaction accounts, and time deposits, as well as loans for working capital, inventory, and general corporate use; commercial real estate construction loans; and agricultural loans. Its Wealth Management segment provides asset management, trust, and banking services, as well as offers retirement plan services, Taft-Hartley services, not-for-profit services, north Star deferred exchange, and trust operations outsourcing services. The company also provides derivative solutions and investment services, currency conversion and foreign exchange services, and risk management to corporate, business banking, and financial institution clients.
2006 | Closing Price | 2007 | Closing Price | 2008 | Closing Price | 2009 | Closing Price | 2010 | Closing Price | 2011 | Closing Price | ||||||||||||||||||
| January | 33.24 | January | 37.30 | January | 27.90 | January | 5.71 | January | 6.91 | January | 6.99 | ||||||||||||||||||
| February | 34.87 | February | 37.71 | February | 23.20 | February | 4.58 | February | 7.08 | February | 7.77 | ||||||||||||||||||
| March | 34.54 | March | 36.71 | March | 23.20 | March | 5.63 | March | 8.05 | ||||||||||||||||||||
| April | 36.24 | April | 38.06 | April | 24.98 | April | 5.78 | April | 9.10 | ||||||||||||||||||||
| May | 35.94 | May | 38.04 | May | 23.24 | May | 6.58 | May | 8.15 | ||||||||||||||||||||
| June | 36.25 | June | 37.75 | June | 15.33 | June | 4.80 | June | 7.18 | ||||||||||||||||||||
| July | 37.23 | July | 32.66 | July | 15.20 | July | 6.04 | July | 7.03 | ||||||||||||||||||||
| August | 36.96 | August | 34.64 | August | 15.40 | August | 7.12 | August | 6.55 | ||||||||||||||||||||
| September | 38.19 | September | 34.69 | September | 20.15 | September | 8.07 | September | 7.04 | ||||||||||||||||||||
| October | 38.00 | October | 33.84 | October | 18.03 | October | 5.32 | October | 5.95 | ||||||||||||||||||||
| November | 36.29 | November | 31.47 | November | 15.45 | November | 5.75 | November | 4.79 | ||||||||||||||||||||
| December | 38.13 | December | 26.48 | December | 13.64 | December | 5.45 | December | 6.92 | ||||||||||||||||||||
NORTHERN TRUST CORPORATION (NTRS)
Northern Trust Corporation, through its subsidiaries, provides asset servicing, fund administration, investment management, banking, and fiduciary solutions for corporations, institutions, and individuals worldwide. It offers various deposit products, including demand and other noninterest bearing, savings, money market, savings certificates, and time deposit accounts. The company’s loan portfolio comprises residential real estate, commercial real estate, commercial, and personal loans, as well as provides lease financing solutions. It also provides asset servicing, asset management, and related services to corporate and public retirement funds, foundations, endowments, fund managers, insurance companies, and government funds, as well as offers foreign exchange services. In addition, the company offers personal trust, investment management, custody, and philanthropic services; financial consulting services; guardianship and estate administration services; brokerage services; and private and business banking services focusing on high net worth individuals and families, business owners, executives, professionals, retirees, and established privately-held businesses. Further, it provides securities lending, transition management, and related services.
2006 | Closing Price | 2007 | Closing Price | 2008 | Closing Price | 2009 | Closing Price | 2010 | Closing Price | 2011 | Closing Price | ||||||||||||||||||
| January | 52.21 | January | 60.75 | January | 73.36 | January | 57.52 | January | 50.52 | January | 51.98 | ||||||||||||||||||
| February | 52.72 | February | 60.30 | February | 67.63 | February | 55.55 | February | 53.29 | February | 51.57 | ||||||||||||||||||
| March | 52.50 | March | 60.14 | March | 66.47 | March | 59.82 | March | 55.26 | ||||||||||||||||||||
| April | 58.89 | April | 62.95 | April | 74.11 | April | 54.36 | April | 54.98 | ||||||||||||||||||||
| May | 55.92 | May | 65.08 | May | 76.00 | May | 57.65 | May | 50.81 | ||||||||||||||||||||
| June | 55.30 | June | 64.24 | June | 68.57 | June | 53.68 | June | 46.70 | ||||||||||||||||||||
| July | 57.11 | July | 62.46 | July | 78.17 | July | 59.81 | July | 46.99 | ||||||||||||||||||||
| August | 55.99 | August | 61.46 | August | 80.39 | August | 58.46 | August | 46.13 | ||||||||||||||||||||
| September | 58.43 | September | 66.27 | September | 72.20 | September | 58.16 | September | 48.24 | ||||||||||||||||||||
| October | 58.72 | October | 75.21 | October | 56.31 | October | 50.25 | October | 49.63 | ||||||||||||||||||||
| November | 56.96 | November | 80.99 | November | 45.89 | November | 49.49 | November | 50.30 | ||||||||||||||||||||
| December | 60.69 | December | 76.58 | December | 52.14 | December | 52.40 | December | 55.41 | ||||||||||||||||||||
PIPER JAFFRAY COMPANIES (PJC)
Piper Jaffray Companies provides investment banking services, institutional sales, trading and research services, and asset management services worldwide. The company primarily raises capital through equity and debt financings for its middle-market clients operating in various industries, including the business services, clean technology and renewables, consumer, financial institutions, health care, industrial growth, media, telecommunications, and technology. It provides financial advisory services relating to mergers and acquisitions; underwrites debt issuances; and offers financial advisory and interest rate risk management services. The company’s public finance investment banking capabilities focus on state and local governments, healthcare, higher education, housing, hospitality, and commercial real estate industries. Piper Jaffray Companies also offers both equity and fixed income advisory and trade execution services for institutional investors, public and private corporations, public entities, and non-profit clients; has equity sales and trading relationships with institutional investors in the United States, Europe, and Asia; and engages in proprietary trading. In addition, it provides asset management services; offers an array of investment products, including flex equity, master limited partnerships, fixed income balance, and quantitative equity funds; and invests in private equity and venture capital funds.
2006 | Closing Price | 2007 | Closing Price | 2008 | Closing Price | 2009 | Closing Price | 2010 | Closing Price | 2011 | Closing Price | ||||||||||||||||||
| January | 44.83 | January | 68.94 | January | 47.40 | January | 28.71 | January | 48.58 | January | 41.80 | ||||||||||||||||||
| February | 49.68 | February | 65.23 | February | 38.73 | February | 21.99 | February | 43.29 | February | 41.15 | ||||||||||||||||||
| March | 55.00 | March | 61.94 | March | 33.96 | March | 25.79 | March | 40.30 | ||||||||||||||||||||
| April | 69.90 | April | 63.81 | April | 37.26 | April | 34.67 | April | 39.36 | ||||||||||||||||||||
| May | 63.29 | May | 66.90 | May | 38.00 | May | 36.07 | May | 33.11 | ||||||||||||||||||||
| June | 61.21 | June | 55.73 | June | 29.33 | June | 43.67 | June | 32.22 | ||||||||||||||||||||
| July | 51.19 | July | 47.92 | July | 35.50 | July | 45.86 | July | 31.19 | ||||||||||||||||||||
| August | 58.58 | August | 51.36 | August | 38.01 | August | 50.68 | August | 27.62 | ||||||||||||||||||||
| September | 60.62 | September | 53.60 | September | 43.25 | September | 47.72 | September | 29.13 | ||||||||||||||||||||
| October | 69.15 | October | 51.40 | October | 39.45 | October | 46.39 | October | 30.97 | ||||||||||||||||||||
| November | 65.07 | November | 46.32 | November | 37.89 | November | 43.35 | November | 29.97 | ||||||||||||||||||||
| December | 65.15 | December | 46.32 | December | 39.76 | December | 50.61 | December | 35.01 | ||||||||||||||||||||
PNC FINANCIAL SERVICES GROUP, INC. (PNC)
The PNC Financial Services Group, Inc. operates as a diversified financial services company. It offers retail banking, corporate and institutional banking, asset management, and residential mortgage banking services. Its retail banking products and services comprise deposit, lending, brokerage, trust, investment management, and cash management services. The company also offers corporate and institutional banking products and services, including lending products, such as secured and unsecured loans, letters of credit and equipment leases; treasury management services comprising cash and investment management, receivables management, disbursement, funds transfer, information reporting, and global trade services; and capital markets-related services, such as foreign exchange, derivatives, loan syndications, mergers and acquisitions advisory and related services for mid-sized corporations, government, not-for-profit entities, and large corporations, as well as offers commercial loan servicing, real estate advisory, and technology solutions for the commercial real estate finance industry. In addition, it manages assets on behalf of institutional and individual investors through equity, fixed income, alternative and cash management separate accounts, and funds, as well as offers market risk management, financial markets advisory, and enterprise investment system services worldwide. Further, the company offers distressed assets, such as commercial residential development loans, cross-border leases, consumer brokered home equity loans, retail and non-prime mortgages, and residential construction loans.
2006 | Closing Price | 2007 | Closing Price | 2008 | Closing Price | 2009 | Closing Price | 2010 | Closing Price | 2011 | Closing Price | ||||||||||||||||||
| January | 64.86 | January | 73.77 | January | 65.60 | January | 32.52 | January | 55.43 | January | 60.00 | ||||||||||||||||||
| February | 70.35 | February | 73.29 | February | 61.43 | February | 27.34 | February | 53.76 | February | 61.70 | ||||||||||||||||||
| March | 67.31 | March | 71.97 | March | 65.57 | March | 29.29 | March | 59.70 | ||||||||||||||||||||
| April | 71.47 | April | 74.10 | April | 69.35 | April | 39.70 | April | 67.21 | ||||||||||||||||||||
| May | 68.91 | May | 73.80 | May | 64.25 | May | 45.55 | May | 62.75 | ||||||||||||||||||||
| June | 70.17 | June | 71.58 | June | 57.10 | June | 38.81 | June | 56.50 | ||||||||||||||||||||
| July | 70.84 | July | 66.65 | July | 71.29 | July | 36.66 | July | 59.39 | ||||||||||||||||||||
| August | 70.79 | August | 70.37 | August | 71.95 | August | 42.59 | August | 50.99 | ||||||||||||||||||||
| September | 72.44 | September | 68.10 | September | 74.70 | September | 48.59 | September | 51.91 | ||||||||||||||||||||
| October | 70.03 | October | 72.16 | October | 66.67 | October | 48.94 | October | 53.90 | ||||||||||||||||||||
| November | 70.69 | November | 73.21 | November | 52.77 | November | 57.01 | November | 53.85 | ||||||||||||||||||||
| December | 74.04 | December | 65.65 | December | 49.00 | December | 52.79 | December | 60.72 | ||||||||||||||||||||
REGIONS FINANCIAL CORPORATION (RF)
Regions Financial Corporation operates as the holding company for the Regions Bank that provides a range of commercial, retail, and mortgage banking services in Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Mississippi, Missouri, North Carolina, South Carolina, Tennessee, Texas, and Virginia. It offers various deposit products, including savings accounts, transaction accounts, money market accounts, and foreign deposits, as well as time deposits, including certificate of deposits and individual retirement accounts. The company’s loan portfolio comprises commercial and industrial loans, including financial and agricultural, and owner occupied mortgage and construction loans; investor real estate loans, such as commercial real estate mortgage and construction loans; and consumer loans consisting of residential first mortgage, home equity, indirect, and other consumer loans. Regions Financial Corporation, through other subsidiaries, also provides regional brokerage and investment banking products and services, such as securities brokerage, asset management, financial planning, mutual funds, securities underwriting, sales and trading, investment banking services, and trust services, as well as insurance brokerage services for various lines of personal and commercial insurance, including property, casualty, life, health, accident, credit-related insurance, and debt cancellation products. In addition, the company provides domestic and international equipment financing products primarily to commercial clients.
2006 | Closing Price | 2007 | Closing Price | 2008 | Closing Price | 2009 | Closing Price | 2010 | Closing Price | 2011 | Closing Price | ||||||||||||||||||
| January | 33.18 | January | 36.26 | January | 25.17 | January | 3.46 | January | 6.35 | January | 7.10 | ||||||||||||||||||
| February | 34.78 | February | 35.82 | February | 21.20 | February | 3.42 | February | 6.75 | February | 7.64 | ||||||||||||||||||
| March | 35.17 | March | 35.37 | March | 19.75 | March | 4.26 | March | 7.85 | ||||||||||||||||||||
| April | 36.51 | April | 35.09 | April | 21.92 | April | 4.49 | April | 8.84 | ||||||||||||||||||||
| May | 33.85 | May | 35.67 | May | 17.82 | May | 4.19 | May | 7.63 | ||||||||||||||||||||
| June | 33.12 | June | 33.10 | June | 10.91 | June | 4.04 | June | 6.58 | ||||||||||||||||||||
| July | 36.29 | July | 30.07 | July | 9.48 | July | 4.42 | July | 7.33 | ||||||||||||||||||||
| August | 35.99 | August | 31.30 | August | 9.27 | August | 5.86 | August | 6.43 | ||||||||||||||||||||
| September | 36.79 | September | 29.48 | September | 9.60 | September | 6.21 | September | 7.27 | ||||||||||||||||||||
| October | 37.95 | October | 27.12 | October | 11.09 | October | 4.84 | October | 6.30 | ||||||||||||||||||||
| November* | 36.65 | November | 26.43 | November | 10.19 | November | 5.86 | November | 5.38 | ||||||||||||||||||||
| December | 37.40 | December | 23.65 | December | 7.96 | December | 5.29 | December | 7.00 | ||||||||||||||||||||
*As a result of the merger of AmSouth Bancorporation (NYSE Ticker: “ASO”) and Regions Financial Corporation (NYSE Ticker: “RF”), Regions Financial Corporation replaced AmSouth Bancorporation as an underlying security of the Regional Bank HOLDRS Trust. The closing prices prior to November 6, 2006 reflect those of Amsouth Bancorporation.
STATE STREET CORPORATION (STT)
State Street Corporation, through its subsidiaries, provides various products and services for the institutional investors worldwide. Its investment servicing business provides services, such as custody, product- and participant-level accounting, daily pricing, and administration; master trust and master custody; recordkeeping; shareholder services, including mutual fund and collective investment fund shareholder accounting; foreign exchange, brokerage, and other trading services; securities finance; deposit and short-term investment facilities; loans and lease financing; investment manager and alternative investment manager operations outsourcing; performance, risk, and compliance analytics; and shareholder comprising mutual fund and collective investment fund shareholder accounting. State Street Corporation’s investment management business offers a range of services for managing financial assets, such as investment research services and investment management, including the passive and active U.S. and the non-U.S. equity and fixed-income strategies; and other related services, such as securities finance. The company serves mutual funds, collective investment funds and other investment pools, corporate and public retirement plans, insurance companies, foundations, endowments, and investment managers.
2006 | Closing Price | 2007 | Closing Price | 2008 | Closing Price | 2009 | Closing Price | 2010 | Closing Price | 2011 | Closing Price | ||||||||||||||||||
| January | 60.46 | January | 71.05 | January | 82.12 | January | 23.27 | January | 42.88 | January | 46.72 | ||||||||||||||||||
| February | 62.48 | February | 65.51 | February | 78.55 | February | 25.27 | February | 44.91 | February | 44.72 | ||||||||||||||||||
| March | 60.43 | March | 64.75 | March | 79.00 | March | 30.78 | March | 45.14 | ||||||||||||||||||||
| April | 65.32 | April | 68.87 | April | 72.14 | April | 34.13 | April | 43.50 | ||||||||||||||||||||
| May | 62.10 | May | 68.27 | May | 72.02 | May | 46.45 | May | 38.17 | ||||||||||||||||||||
| June | 58.09 | June | 68.40 | June | 63.99 | June | 47.20 | June | 33.82 | ||||||||||||||||||||
| July | 60.06 | July | 67.03 | July | 71.64 | July | 50.30 | July | 38.92 | ||||||||||||||||||||
| August | 61.80 | August | 61.36 | August | 67.67 | August | 52.48 | August | 35.08 | ||||||||||||||||||||
| September | 62.40 | September | 68.16 | September | 56.88 | September | 52.60 | September | 37.66 | ||||||||||||||||||||
| October | 64.23 | October | 79.77 | October | 43.35 | October | 41.98 | October | 41.76 | ||||||||||||||||||||
| November | 62.17 | November | 79.89 | November | 42.11 | November | 41.30 | November | 43.20 | ||||||||||||||||||||
| December | 67.44 | December | 81.20 | December | 39.33 | December | 43.54 | December | 46.34 | ||||||||||||||||||||
SUNTRUST BANKS, INC. (STI)
SunTrust Banks, Inc. operates as the holding company for SunTrust Bank, which provides various financial services to consumer and corporate customers in the United States. The company operates in four segments: Retail and Commercial, Wealth and Investment Management, Corporate and Investment Banking, and Household Lending. The Retail and Commercial segment offers various financial products and services that include consumer deposits; home equity lines; consumer lines; commercial and commercial real estate lending; financial risk management; insurance premium financing; treasury and payment solutions, including commercial card services; and specialized commercial real estate investments. The Wealth and Investment Management segment provides brokerage, professional investment management services, trust services, and family office solutions. This segment also offers administration and custody services; bundled administrative and investment solutions, including planned giving, charitable trustee, and foundation grant administration services for non-profit organizations; escrow services; portfolio construction and manager due diligence services; and investment advisory services. The Corporate and Investment Banking segment provides investment banking products and services to its clients, such as strategic advice, capital raising, and financial risk management. This segment also offers traditional lending, leasing, treasury management services, and institutional investment management to its clients. The Household Lending segment offers residential mortgages, home equity lines and loans, indirect auto, student, bank card, and other consumer loan products. The company also provides mortgage banking, credit-related insurance, asset management, securities brokerage, and capital markets services.
2006 | Closing Price | 2007 | Closing Price | 2008 | Closing Price | 2009 | Closing Price | 2010 | Closing Price | 2011 | Closing Price | ||||||||||||||||||
| January | 71.45 | January | 83.10 | January | 68.85 | January | 12.26 | January | 24.33 | January | 30.43 | ||||||||||||||||||
| February | 72.37 | February | 84.31 | February | 58.13 | February | 12.03 | February | 23.81 | February | 30.17 | ||||||||||||||||||
| March | 72.76 | March | 83.04 | March | 55.14 | March | 11.74 | March | 26.79 | ||||||||||||||||||||
| April | 77.33 | April | 84.42 | April | 55.75 | April | 14.44 | April | 29.60 | ||||||||||||||||||||
| May | 75.71 | May | 89.29 | May | 52.21 | May | 13.17 | May | 26.95 | ||||||||||||||||||||
| June | 76.26 | June | 85.74 | June | 36.22 | June | 16.45 | June | 23.30 | ||||||||||||||||||||
| July | 78.87 | July | 78.30 | July | 41.06 | July | 19.50 | July | 25.95 | ||||||||||||||||||||
| August | 76.40 | August | 78.75 | August | 41.89 | August | 23.37 | August | 22.51 | ||||||||||||||||||||
| September | 77.28 | September | 75.67 | September | 44.99 | September | 22.55 | September | 25.83 | ||||||||||||||||||||
| October | 78.99 | October | 72.60 | October | 40.14 | October | 19.11 | October | 25.01 | ||||||||||||||||||||
| November | 81.65 | November | 70.11 | November | 31.73 | November | 23.63 | November | 23.36 | ||||||||||||||||||||
| December | 84.45 | December | 62.49 | December | 29.54 | December | 20.29 | December | 29.51 | ||||||||||||||||||||
SYNOVUS FINANCIAL CORP. (SNV)
Synovus Financial Corp., a diversified financial services and bank holding company, provides commercial and retail banking, financial management, insurance, and mortgage services in Georgia, Alabama, South Carolina, Florida, and Tennessee. Its retail banking services include accepting customary types of demand and savings deposits; individual, consumer, installment, and mortgage loans; safe deposit services; automated banking services; automated fund transfers; Internet based banking services; and bank credit card services, including mastercard and visa services, as well as commercial banking services comprise commercial, financial, agricultural, and real estate loans. The company also provides various other financial services, which include the portfolio management for fixed-income securities, investment banking, the execution of securities transactions as a broker/dealer, and the provision of individual investment advice on equity and other securities; trust services; mortgage services; financial planning services; and asset management services.
2006 | Closing Price | 2007 | Closing Price | 2008 | Closing Price | 2009 | Closing Price | 2010 | Closing Price | 2011 | Closing Price | ||||||||||||||||||
| January | 12.10 | January | 13.96 | January | 13.18 | January | 3.96 | January | 2.76 | January | 2.64 | ||||||||||||||||||
| February | 12.40 | February | 14.16 | February | 11.53 | February | 3.48 | February | 2.85 | February | 2.55 | ||||||||||||||||||
| March | 11.85 | March | 14.14 | March | 11.06 | March | 3.25 | March | 3.29 | ||||||||||||||||||||
| April | 12.24 | April | 13.80 | April | 11.84 | April | 3.23 | April | 3.01 | ||||||||||||||||||||
| May | 11.51 | May | 14.46 | May | 11.49 | May | 3.27 | May | 2.96 | ||||||||||||||||||||
| June | 11.71 | June | 13.43 | June | 8.73 | June | 2.99 | June | 2.54 | ||||||||||||||||||||
| July | 12.36 | July | 12.23 | July | 9.51 | July | 3.51 | July | 2.62 | ||||||||||||||||||||
| August | 12.72 | August | 12.08 | August | 9.20 | August | 3.70 | August | 2.06 | ||||||||||||||||||||
| September | 12.84 | September | 12.27 | September | 10.35 | September | 3.75 | September | 2.46 | ||||||||||||||||||||
| October | 12.85 | October | 11.53 | October | 10.33 | October | 2.22 | October | 2.16 | ||||||||||||||||||||
| November | 13.13 | November | 10.88 | November | 8.32 | November | 1.95 | November | 2.03 | ||||||||||||||||||||
| December | 13.48 | December | 10.53 | December | 8.30 | December | 2.05 | December | 2.64 | ||||||||||||||||||||
U.S. BANCORP (USB)
U.S. Bancorp, a financial bank holding company, provides various banking and financial services in the United States. It generates various deposit products, including checking accounts, savings accounts, money market savings, and time certificates of deposit accounts. The company originates a portfolio of loans comprising commercial loans and lease financing; commercial real estate; residential mortgage; and retail loans, including credit card, retail leasing, home equity and second mortgages, and other retail loans. It also offers wholesale lending, equipment finance, small-ticket leasing, depository, treasury management, capital markets, foreign exchange, and international trade services to middle market, large corporate, commercial real estate, and public sector clients. In addition, U.S. Bancorp provides telebanking, online banking, direct mail, and automated teller machine (ATM) services. The company, through other subsidiaries, provides trust, private banking, financial advisory, investment management, retail brokerage services, insurance, and custody and mutual fund services; and payment services, including consumer and business credit cards, stored-value cards, debit cards, corporate and purchasing card services, consumer lines of credit, ATM processing, and merchant processing. U.S. Bancorp primarily serves individuals, estates, foundations, business corporations, and charitable organizations.
2006 | Closing Price | 2007 | Closing Price | 2008 | Closing Price | 2009 | Closing Price | 2010 | Closing Price | 2011 | Closing Price | ||||||||||||||||||
| January | 29.91 | January | 35.60 | January | 33.95 | January | 14.84 | January | 25.08 | January | 27.00 | ||||||||||||||||||
| February | 30.91 | February | 35.66 | February | 32.02 | February | 14.31 | February | 24.61 | February | 27.73 | ||||||||||||||||||
| March | 30.50 | March | 34.97 | March | 32.36 | March | 14.61 | March | 25.88 | ||||||||||||||||||||
| April | 31.44 | April | 34.35 | April | 33.89 | April | 18.22 | April | 26.77 | ||||||||||||||||||||
| May | 30.87 | May | 34.58 | May | 33.19 | May | 19.20 | May | 23.96 | ||||||||||||||||||||
| June | 30.88 | June | 32.95 | June | 27.89 | June | 17.92 | June | 22.35 | ||||||||||||||||||||
| July | 32.00 | July | 29.95 | July | 30.61 | July | 20.41 | July | 23.90 | ||||||||||||||||||||
| August | 32.07 | August | 32.35 | August | 31.86 | August | 22.62 | August | 20.80 | ||||||||||||||||||||
| September | 33.22 | September | 32.53 | September | 36.02 | September | 21.86 | September | 21.62 | ||||||||||||||||||||
| October | 33.84 | October | 33.16 | October | 29.81 | October | 23.22 | October | 24.20 | ||||||||||||||||||||
| November | 33.64 | November | 33.09 | November | 26.98 | November | 24.13 | November | 23.78 | ||||||||||||||||||||
| December | 36.19 | December | 31.74 | December | 25.01 | December | 22.51 | December | 26.97 | ||||||||||||||||||||
WELLS FARGO & COMPANY (WFC)
Wells Fargo & Company, through its subsidiaries, provides retail, commercial, and corporate banking services principally in the United States. The company operates through three segments: Community Banking; Wholesale Banking; and Wealth, Brokerage, and Retirement. The Community Banking segment offers deposit products, including checking accounts, savings deposits, market rate accounts, individual retirement accounts, time deposits, and debit cards. Its loan products include lines of credit, equity lines and loans, equipment and transportation loans, education loans, residential mortgage loans, and credit cards. This segment also provides receivables and inventory financing, equipment leases, real estate financing, small business administration financing, venture capital financing, cash management, payroll services, retirement plans, and merchant payment processing services; consumer and real estate loans to individuals; and loans secured by autos, as well as purchases sales finance contracts from retail merchants. The Wholesale Banking segment provides commercial and corporate banking products and services, including commercial loans and lines of credit, letters of credit, asset-based lending, equipment leasing, mezzanine financing, high-yield debt, foreign exchange services, treasury management, investment management, institutional fixed-income sales, commodity and equity risk management, insurance, corporate trust fiduciary and agency services, and investment banking services. This segment also provides banking products for commercial real estate market, and mortgage brokerage services. The Wealth, Brokerage, and Retirement segment offers financial advisory, lending, fiduciary, and investment management services.
2006 | Closing Price | 2007 | Closing Price | 2008 | Closing Price | 2009 | Closing Price | 2010 | Closing Price | 2011 | Closing Price | ||||||||||||||||||
| January | 31.18 | January | 35.92 | January | 34.08 | January | 18.90 | January | 28.43 | January | 32.42 | ||||||||||||||||||
| February | 32.10 | February | 34.70 | February | 29.23 | February | 12.10 | February | 27.34 | February | 32.26 | ||||||||||||||||||
| March | 31.94 | March | 34.43 | March | 29.10 | March | 14.24 | March | 31.12 | ||||||||||||||||||||
| April | 34.35 | April | 35.89 | April | 29.75 | April | 20.01 | April | 33.11 | ||||||||||||||||||||
| May | 33.19 | May | 36.09 | May | 27.57 | May | 25.50 | May | 28.69 | ||||||||||||||||||||
| June | 33.54 | June | 35.17 | June | 23.75 | June | 24.26 | June | 25.60 | ||||||||||||||||||||
| July | 36.17 | July | 33.77 | July | 30.27 | July | 24.46 | July | 27.73 | ||||||||||||||||||||
| August | 34.75 | August | 36.54 | August | 30.27 | August | 27.52 | August | 23.55 | ||||||||||||||||||||
| September | 36.18 | September | 35.62 | September | 37.53 | September | 28.18 | September | 25.12 | ||||||||||||||||||||
| October | 36.29 | October | 34.01 | October | 34.05 | October | 27.52 | October | 26.06 | ||||||||||||||||||||
| November | 35.24 | November | 32.43 | November | 28.89 | November | 28.04 | November | 27.21 | ||||||||||||||||||||
| December | 35.56 | December | 30.19 | December | 29.48 | December | 26.99 | December | 30.99 | ||||||||||||||||||||
1,000,000,000 Depositary Receipts
Regional Bank HOLDRSSM Trust
_____________________
PROSPECTUS
_____________________
March 15, 2011
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of the State of Delaware, as amended, provides that under certain circumstances a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a director, officer, employee or agent of the corporation or is or was serving at its request in such capacity in another corporation or business association, against expenses (including attorney’s fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful.
Article XIV, Section 2 of the Restated Certificate of Incorporation of Merrill Lynch, Pierce, Fenner & Smith Incorporated provides in effect that, subject to certain limited exceptions, Merrill Lynch, Pierce, Fenner & Smith Incorporated shall indemnify its directors and officers to the full extent authorized or permitted by law.
The directors and officers of Merrill Lynch, Pierce, Fenner & Smith Incorporated are insured under policies of insurance maintained by Merrill Lynch, Pierce, Fenner & Smith Incorporated, subject to the limits of the policies, against certain losses arising from any claim made against them by reason of being or having been such directors or officers. In addition, Merrill Lynch, Pierce, Fenner & Smith Incorporated has entered into contracts with all of its directors providing for indemnification of such persons by Merrill Lynch, Pierce, Fenner & Smith Incorporated to the full extent authorized or permitted by law, subject to certain limited exceptions.
Item 16. Exhibits.
See Index to Exhibits.
Item 17. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities Act.
(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of the prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
(5) For purposes of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(6) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to Item 14 of this registration statement, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Post-Effective Amendment No. 10 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, on March 15, 2011.
| Merrill Lynch, Pierce, Fenner & Smith Incorporated | |||
| By: | * | ||
| Name: | Sallie L. Krawcheck | ||
| Title: | Co-Chief Executive Officer | ||
| Executive Vice President and Director | |||
Pursuant to the requirements of the Securities Act of 1933, this Post-Effective Amendment No. 10 to the Registration Statement has been signed by the following persons in the capacities indicated below on March 15, 2011.
| Signature | Title | |||
| * | Co-Chief Executive Officer, Executive Vice President and Director | |||
Sallie L. Krawcheck | (Principal Executive Officer) | |||
| * | Co-Chief Executive Officer, Executive Vice President and Director | |||
Thomas K. Montag | (Principal Executive Officer) | |||
| * | Chief Financial Officer and Senior Vice President | |||
Robert Qutub | (Principal Financial Officer and Principal Accounting Officer) | |||
| * | Executive Vice President and Director | |||
Bruce R. Thompson | ||||
| *By: | /s/ Liam B. O’Neil | Attorney-in-Fact | ||
Liam B. O’Neil | ||||
INDEX TO EXHIBITS
Exhibits
| 4.1 | Standard Terms for Depositary Trust Agreements between Merrill Lynch, Pierce, Fenner & Smith Incorporated and The Bank of New York Mellon (formerly known as The Bank of New York), as Trustee dated as of September 2, 1999, and included as exhibits thereto, form of Depositary Trust Agreement and form of HOLDRS, filed on May 5, 2000 as an exhibit to the registration statement filed on Form S-1 for Regional Bank HOLDRS. |
| *4.2 | Amendment No. 2 to the Standard Terms for Depositary Trust Agreements, dated as of November 22, 2000, filed on May 5, 2000 as an exhibit to the registration statement filed on Form S-1 for Regional Bank HOLDRS. |
| *5.1 | Opinion of Shearman & Sterling LLP regarding the validity of the Regional Bank HOLDRS Receipts, filed on May 5, 2000 as an exhibit to the registration statement filed on Form S-1 for Regional Bank HOLDRS. |
| *8.1 | Opinion of Shearman & Sterling LLP, as special U.S. tax counsel, regarding the material federal income tax consequences, filed on May 5, 2000 as an exhibit to the registration statement filed on Form S-1 for Regional Bank HOLDRS. |
| *8.2 | Opinion of Shearman & Sterling LLP, as special U.S. tax counsel regarding the material federal income tax consequences, filed on July 14, 2003 as an exhibit to Amendment No. 4 to the registration statement filed on Form S-1 for Regional Bank HOLDRS. |
| *24.1 | Power of Attorney of Sallie L. Krawcheck, Thomas K. Montag, Robert Qutub and Bruce R. Thompson. |
_________________
*Previously filed
II-4