As filed with the Securities and Exchange Commission on June 15, 2010

1933 Act File No. 333-166339
1940 Act File No. 811-03763

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

AMENDMENT NO. 1
TO
FORM S-6

For Registration under the Securities Act of 1933 of Securities of Unit
Investment Trusts Registered on Form N-8B-2

A. Exact name of Trust: CLAYMORE SECURITIES DEFINED PORTFOLIOS,
SERIES 688

B. Name of Depositor: CLAYMORE SECURITIES, INC.

C. Complete address of Depositor's principal executive offices:

2455 Corporate West Drive
Lisle, Illinois 60532

D. Name and complete address of agents for service:

CLAYMORE SECURITIES, INC.
Attention: Kevin Robinson, Esq.
Senior Managing Director, General Counsel and Secretary
2455 Corporate West Drive
Lisle, Illinois 60532

CHAPMAN AND CUTLER LLP
Attention: Eric F. Fess, Esq.
111 West Monroe Street
Chicago, Illinois 60603

It is proposed that this filing will become effective (check appropriate box)

/ / immediately upon filing pursuant to paragraph (b)

/ / on (date) pursuant to paragraph (b)

/ / 60 days after filing pursuant to paragraph (a)

/ / on (date) pursuant to paragraph (a) of rule 485 or 486

E. Title of securities being registered: Units of fractional undivided
beneficial interest.

F. Approximate date of proposed sale to the public: As soon as
practicable after the effective date of the Registration Statement.

/ / Check box if it is proposed that this filing will become effective on
(date) at (time) Eastern Time pursuant to Rule 487.

Claymore Securities Defined Portfolios, Series 688

Guggenheim Moderate Asset Allocation Portfolio of ETFs, Series 3

Guggenheim Growth Asset Allocation Portfolio of ETFs, Series 3

CLAYMORE LOGO

GUGGENHEIM LOGO

PROSPECTUS PART A DATED JUNE 15, 2010

Diversified portfolios of securities selected by Claymore Securities, Inc. with
the assistance of Guggenheim Partners Asset Management, Inc.

The Securities and Exchange Commission has not approved or
disapproved of these securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal offense.

================================================================================
INVESTMENT SUMMARY

Overview

Claymore Securities Defined Portfolios, Series 688 is a unit investment
trust that consists of the Guggenheim Moderate Asset Allocation Portfolio of
ETFs, Series 3 (the "Moderate Asset Allocation Trust") and the Guggenheim
Growth Asset Allocation Portfolio of ETFs, Series 3 (the "Growth Asset
Allocation Trust") (collectively referred to as the "trusts" and individually
referred to as a "trust"). Claymore Securities, Inc.
("Claymore" or the "sponsor") serves as the sponsor of the trusts.

The trusts are scheduled to terminate in approximately 15 months.

================================================================================
GUGGENHEIM MODERATE ASSET ALLOCATION PORTFOLIO OF ETFs, SERIES 3

Use this Investment Summary to help you decide whether an investment in
this trust is right for you. More detailed information can be found later in
this prospectus.

Investment Objective

The Moderate Asset Allocation Trust seeks to provide capital appreciation
and current income by investing in a diversified portfolio of exchange-traded
funds ("ETFs").

Principal Investment Strategy

Under normal circumstances, the trust will invest at least 80% of the
value of its assets in shares of ETFs. The trust is comprised of ETFs across
three different asset classes:

o Equity funds;

o Commodity funds; and

o Fixed-income funds.

The trust has been designed to provide investors with broad
diversification by investing in three different, historically low correlated
asset classes to potentially reduce volatility in a rising inflationary
environment. The portfolio is constructed to provide investors with broad
diversification by investing in ETFs that invest in common stocks of various
market capitalizations, growth and value styles, sectors and countries as well
as taxable and government bonds.

See "Investment Policies" in Part B of the prospectus for additional
information.

Security Selection

The sponsor, with the assistance of Guggenheim Partners Asset Management
Inc. ("GPAM"), has selected a portfolio of ETFs believed to have the best
potential for capital appreciation and the potential for current income. As of
the trust's initial date of deposit (the "Inception Date"), the asset classes
represented in the portfolio will be approximately weighted as follows: equity
funds, 40%; commodity funds, 20%; and fixed-income funds, 40%.

When selecting the ETFs for the trust, the sponsor considers a number of
factors including, but not limited to, the size, liquidity and daily trading
volume, the current dividend yield, the strategy and investment objective, the
securities held by the ETF, the expense ratio and limitations on the overlap of
the underlying securities held by the ETFs.

Guggenheim Partners
Asset Management, Inc.

Guggenheim Partners Asset Management, Inc., is a wholly-owned subsidiary
of Guggenheim Partners, LLC and an affiliate of the

sponsor, which offers financial services expertise within its asset management,
investment advisory, capital markets, institutional finance and merchant
banking business lines. Clients consist of an elite mix of individuals, family
offices, endowments, foundations, insurance companies, pension plans and other
institutions that together have entrusted the firm with supervision of more
than $100 billion in assets. A global diversified financial services firm,
Guggenheim Partners, LLC office locations include New York, Chicago, Los
Angeles, Miami, Boston, Philadelphia, St. Louis, Houston, London, Dublin,
Geneva, Hong Kong, Singapore, Mumbai and Dubai.

The sponsor is also indirectly owned by Guggenheim Partners, LLC and is an
affiliate of GPAM.

Exchange-Traded Funds

ETFs are investment pools that hold securities. ETFs provide an efficient
and relatively simple way to invest in that they offer investors the
opportunity to buy and sell an entire basket of securities with a single
transaction throughout the trading day. ETFs are built like an index fund, but
trade like a stock. They are generally designed to track a specific index and
offer investors lower costs and improved tax efficiency over traditional,
actively managed mutual funds. ETFs generally offer advantages similar to those
found in index funds such as low operating costs, performance designed to track
an index, the potential for high tax efficiency and consistent investment
strategies. Unlike conventional mutual funds, ETFs normally issue and redeem
shares on a continuous basis at their net asset value in large specified blocks
of shares, known as "creation units."

Future Trusts

The sponsor may create future trusts that follow the same investment
strategy. One such trust is expected to be available approximately three months
after the Inception Date. If these future trusts are available, you may be able
to reinvest into one of the trusts at a reduced sales charge. Each trust is
designed to be part of a longer term strategy.

- --------------------------------------------------------------------------------
Essential Information
(as of the Inception Date)

Inception Date June 15, 2010

Unit Price $10.00

Termination Date September 16, 2011

Distribution Date 25th day of each month
(commencing July 25, 2010, if any)

Record Date 15th day of each month
(commencing July 15, 2010, if any)

CUSIP Numbers

Cash Distributions
Standard Accounts 18387M387
Fee Account Cash 18387M403

Reinvested Distributions
Standard Accounts 18387M395
Fee Account Reinvest 18387M411

Ticker CEFFCX

Portfolio Diversification

Approximate
Sector Portfolio Percentage
- ------------------ --------------------
Commodity 19.88%
Equity 39.91
Fixed-Income 40.21
------
Total 100.00%
======

Market Approximate
Capitalization Portfolio Percentage
- ------------------ --------------------
Small-Capitalization 20.37%
Mid-Capitalization 46.45
Large-Capitalization 33.18
------
Total 100.00%
======

Minimum Investment
All accounts $250
- --------------------------------------------------------------------------------

Principal Risks

As with all investments, you may lose some or all of your investment in
the trust. No assurance can be given that the trust's investment objective will
be achieved. The trust also might not perform as well as you expect. This can
happen for reasons such as these:

o Securities prices can be volatile. The value of your investment may
fall over time. Market value fluctuates in response to various
factors. These can include stock market movements, purchases or sales
of securities by the trust, government policies, litigation, and
changes in interest rates, inflation, the financial condition of the
securities' issuer or even perceptions of the issuer. Units of the
trust are not deposits of any bank and are not insured or guaranteed
by the Federal Deposit Insurance Corporation or any other government
agency.

o Due to the current state of the economy, the value of the securities
held by the trust may be subject to steep declines or increased
volatility due to changes in performance or perception of the issuers.
Starting in December 2007, economic activity declined across all
sectors of the economy, and the United States experienced increased
unemployment. The economic crisis affected the global economy with
European and Asian markets also suffering historic losses. Although
the latest economic data suggests slightly increased activity in the
U.S. economy, unemployment remains high. Extraordinary steps have been
taken by the governments of several leading countries to combat the
economic crisis; however, the impact of these measures is not yet
fully known and cannot be predicted.

o Share prices or dividend rates on the securities in the trust may
decline during the life of the trust. There is no guarantee that the
issuers of the securities will declare dividends in the future and, if
declared, whether they will remain at current levels or increase over
time.

o The trust invests in shares of ETFs. ETFs are investment pools that
hold other securities. The ETFs in the trust are usually
passively-managed index funds that seek to replicate the performance
or composition of a recognized securities index. ETFs are subject to
various risks, including management's ability to meet the fund's
investment objective, and to manage the fund's portfolio when the
underlying securities are redeemed or sold, during periods of market
turmoil and as investors' perceptions regarding ETFs or their
underlying investments change. You will bear not only your share of
your trust's expenses, but also the expenses of the underlying funds.
By investing in ETFs, the trust incurs greater expenses than you would
incur if you invested directly in the ETFs.

o The trust is subject to index correlation risk. Index correlation risk
is the risk that the performance of an ETF will vary from the actual
performance of the fund's target index, known as "tracking error."
This can happen due to transaction costs, market impact, corporate
actions (such as mergers and spin-offs) and timing variances.

o The value of the fixed-income securities ETFs will generally fall if

interest rates, in general, rise. Typically, fixed-income securities
with longer periods before maturity are more sensitive to interest
rate changes.

o An ETF or an issuer of securities held by an ETF may be unwilling or
unable to make principal payments and/or to declare dividends in the
future, may call a security before its stated maturity, or may reduce
the level of dividends declared. This may result in a reduction in the
value of your units.

o The financial condition of an ETF or an issuer of securities held by
an ETF may worsen or its credit ratings may drop, resulting in a
reduction in the value of your units. This may occur at any point in
time, including during the primary offering period.

o The trust is exposed to commodities through its investment in the
underlying ETFs. Commodities prices are highly volatile and are
affected by numerous factors in addition to economic activity. These
include political events, weather, labor activity, direct government
intervention, such as embargos, and supply disruptions in major
producing or consuming regions. Those events tend to affect prices
worldwide, regardless of the location of the event.

o The trust invests in ETFs that hold securities issued by
small-capitalization and mid-capitalization companies. These
securities customarily involve more investment risk than securities of
larger capitalization companies. Small- capitalization and
mid-capitalization companies may have limited product lines, markets
or financial resources and may be more vulnerable to adverse general
market or economic developments.

o Certain ETFs held by the trust invest in foreign securities.
Investment in foreign securities presents additional risk. Foreign
risk is the risk that foreign securities will be more volatile than
U.S. securities due to such factors as adverse economic, currency,
political, social or regulatory developments in a country, including
government seizure of assets, excessive taxation, limitations on the
use or transfer of assets, the lack of liquidity or regulatory
controls with respect to certain industries or differing legal and/or
accounting standards.

o Certain ETFs held by the trust invest in securities issued by
companies headquartered or incorporated in countries considered to be
emerging markets. Emerging markets are generally defined as countries
with low per capita income in the initial stages of their
industrialization cycles. Risks of investing in developing or emerging
countries include the possibility of investment and trading
limitations, liquidity concerns, delays and disruptions in settlement
transactions, political uncertainties and dependence on international
trade and development assistance. Companies headquartered in emerging
market countries may be exposed to greater volatility and market risk.

o The sponsor does not actively manage the portfolio. The trust will
generally hold, and may continue to buy, the same securities even
though a security's outlook, market value or yield may have changed.

o Inflation may lead to a decrease in the value of assets or income from
investments.

See "Investment Risks" in Part A of the prospectus and "Risk Factors" in
Part B of the prospectus for additional information.

Who Should Invest

You should consider this investment if:

o The trust represents only a portion of your overall investment
portfolio;

o The trust is part of a longer-term investment strategy that includes
investment in subsequent portfolios, if available; and

o The trust is combined with other investment vehicles to provide
diversification of method to your overall portfolio.

You should not consider this investment if:

o You are uncomfortable with the trust's investment strategy;

o You are uncomfortable with the risks of an unmanaged investment in
securities; or

o You are seeking capital preservation as a primary investment
objective.

Fees and Expenses

The amounts below are estimates of the direct and indirect expenses that
you may incur based on a $10 unit price. Actual expenses may vary.

Percentage
of Public Amount Per
Offering $1,000
Investor Fees Price (4) Invested
- ------------------------- ----------- ---------
Initial sales fee
paid on purchase (1) 1.00% $ 10.00
Deferred sales fee (2) 1.45 14.50
Creation and
development fee (3) 0.50 5.00
-------- -------
Maximum sales fees
(including creation
and development fee) 2.95% $ 29.50
======== =======

Estimated organization costs
(amount per 100 units paid
by the trust at the end of the
initial offering period or
after six months, at the
discretion of the sponsor) $7.50
========

Approximate
Annual Fund % of Public
Operating Offering Amount Per
Expenses Price (4) 100 Units
- ------------------------- ----------- ---------
Trustee's fee 0.1050% $1.050
Sponsor's supervisory fee 0.0300 0.300
Evaluator's fee 0.0350 0.350
Bookkeeping and
administrative fee 0.0350 0.350
Estimated other trust
operating expenses (5) 0.0199 0.199
Estimated acquired Fund
expenses (6) 0.2653 2.653
-------- ------
Total 0.4902% $4.902
======== ======

(1) The initial sales fee provided above is based on the unit price on the
Inception Date. Because the initial sales fee equals the difference between
the maximum sales fee and the sum of the remaining deferred sales fee and
the creation and development fee ("C&D Fee") (as described below), the
percentage and dollar amount of the initial sales fee will vary as the unit
price varies and after deferred fees begin. Despite the variability of the
initial sales fee, each investor is obligated to pay the entire applicable
maximum sales fee.

(2) The deferred sales fee is fixed at $0.145 per unit and is deducted in
monthly installments of $0.0483 per unit on the last business day of
October 2010 and November 2010 and $0.0484 on the last business day of
December 2010. The percentage provided is based on a $10 unit as of the
Inception Date and the percentage amount will vary over time. If units are
redeemed prior to the deferred sales fee period, the entire deferred sales
fee will be collected.

provided are based on a $10 unit as of the Inception Date and the
percentage amount will vary over time. If the unit price exceeds $10.00 per
unit, the C&D Fee will be less than 0.50% of the Public Offering Price; if
the unit price is less than $10.00 per unit, the C&D Fee will exceed 0.50%
of the Public Offering Price. However, in no event will the maximum sales
fee exceed 2.95% of a unitholder's initial investment.

(4) Based on 100 units with a $10.00 per unit Public Offering Price as of the
Inception Date.

(5) The estimated trust operating expenses are based upon an estimated trust
size of approximately $10 million. Because certain of the operating
expenses are fixed amounts, if the trust does not reach such estimated size
or falls below the estimated size over its life, the actual amount of the
operating expenses may exceed the amounts reflected. In some cases, the
actual amount of the operating expenses may greatly exceed the amounts
reflected. Other operating expenses do not include brokerage costs and
other transactional fees.

(6) Although not an actual trust operating expense, the trust, and therefore
the unitholders of the trust, will indirectly bear similar operating
expenses of the ETFs held by the trust in the estimated amount provided
above. Estimated ETF expenses are based upon the net asset value of the
number of ETF shares held by the trust per unit multiplied by the Annual
Operating Expenses of the ETFs for the most recent fiscal year. Please note
that the sponsor or an affiliate may be engaged as a service provider to
certain ETFs held by your trust and therefore certain fees paid by your
trust to such ETFs will be paid to the sponsor or an affiliate for its
services to such ETFs.

Example

This example helps you compare the costs of this trust with other unit
trusts and mutual funds. In the example we assume that you reinvest your
investment in a new trust every year at a reduced sales charge, the trust's
operating expenses do not change and the trust's annual return is 5%. Your
actual returns and expenses will vary. Based on these assumptions, you would
pay these expenses for every $10,000 you invest:

1 year $ 422
3 years 1,075
5 years 1,750
10 years 3,535

These amounts are the same regardless of whether you sell your investment
at the end of a period or continue to hold your investment. The example does not
consider any brokerage fees or transaction fees that broker-dealers may charge
for processing redemption requests.

See "Expenses of the Trust" in Part B of the prospectus for additional
information.

Trust Portfolio

Claymore Securities Defined Portfolios, Series 688
Guggenheim Moderate Asset Allocation Portfolio of ETFs, Series 3
The Trust Portfolio as of the Inception Date, June 15, 2010
- ---------------------------------------------------------------------------------------------------------------
Percentage
of Aggregate Initial Per Share Cost To
Ticker Company Name (1) Offer Price Shares Price Portfolio (2)(3)
- ---------------------------------------------------------------------------------------------------------------

EXCHANGE-TRADED FUNDS (100.00%)
Commodity (19.88%)
IXC iShares S&P Global Energy Sector Index Fund 1.98% 93 $ 31.8800 $ 2,965
MXI iShares S&P Global Materials Sector Index Fund 1.99 53 55.8700 2,961
SLV iShares Silver Trust ^ 1.98 166 17.8600 2,965
MOO Market Vectors - Agribusiness ETF 4.94 193 38.2300 7,378
KOL Market Vectors - Coal ETF 3.95 183 32.2400 5,900
GLD SPDR Gold Trust ^ 5.04 63 119.6000 7,535
Equity (39.91%)
XLP Consumer Staples Select Sector SPDR Fund 2.51 141 26.6200 3,753
XLV Health Care Select Sector SPDR Fund 2.50 128 29.2100 3,739
IVW iShares S&P 500 Growth Index Fund 7.93 211 56.1800 11,854
IVE iShares S&P 500 Value Index Fund 3.99 113 52.8000 5,966
IXP iShares S&P Global Telecommunications Sector
Index Fund 2.49 74 50.3400 3,725
IJH iShares S&P MidCap 400 Index Fund 3.98 78 76.2200 5,945
IJR iShares S&P SmallCap 600 Index Fund 3.98 103 57.6800 5,941
XLU Utilities Select Sector SPDR Fund 2.52 128 29.3900 3,762
VWO Vanguard Emerging Markets ETF 2.99 115 38.8400 4,467
VGK Vanguard European ETF 2.00 71 42.0400 2,985
VPL Vanguard Pacific ETF 5.02 152 49.2900 7,492
Fixed-Income (40.21%)
CSJ iShares Barclays 1-3 Year Credit Bond Fund 10.04 145 103.4700 15,003
TIP iShares Barclays TIPS Bond Fund 5.03 71 105.7300 7,507
LQD iShares iBoxx Investment Grade Corporate Bond Fund 20.12 284 105.8300 30,056
JNK SPDR Barclays Capital High Yield Bond ETF 5.02 199 37.6500 7,492
------------
$ 149,391
============

(1) All securities are represented entirely by contracts to purchase
securities, which were entered into by the sponsor on June 14, 2010. All
contracts for securities are expected to be settled by the initial
settlement date for the purchase of units.

(2) Valuation of securities by the trustee was performed as of the Evaluation
Time on June 14, 2010. For securities quoted on a national exchange,
including the Nasdaq Stock Market, Inc., securities are generally valued at
the closing sales price using the market value per share. For foreign
securities traded on a foreign exchange, securities are generally valued at
their fair value. The trust's investments are classified as Level 1, which
refers to security prices determined using quoted prices in active markets
for identical securities.

(3) There was a $83 loss to the sponsor on the Inception Date.

^ Non-income producing security.

================================================================================
GUGGENHEIM GROWTH ASSET ALLOCATION PORTFOLIO OF ETFs, SERIES 3

Use this Investment Summary to help you decide whether an investment in
this trust is right for you. More detailed information can be found later in
this prospectus.

Investment Objective

The Growth Asset Allocation Trust seeks to provide capital appreciation
and current income by investing in a diversified portfolio of exchange-traded
funds ("ETFs").

Principal Investment Strategy

Under normal circumstances, the trust will invest at least 80% of the
value of its assets in shares of ETFs. The trust is comprised of ETFs across
three different asset classes:

o Equity funds;

o Commodity funds; and

o Fixed-income funds.

See "Investment Policies" in Part B of the prospectus for additional
information.

Security Selection

The sponsor, with the assistance of Guggenheim Partners Asset Management
Inc. ("GPAM"), has selected a portfolio of ETFs believed to have the best
potential for capital appreciation and the potential for current income. As of
the trust's initial date of deposit (the "Inception Date"), the asset classes
represented in the portfolio will be approximately weighted as follows: equity
funds, 60%; commodity funds, 20%; and fixed-income funds, 20%.

Guggenheim Partners
Asset Management, Inc.

Guggenheim Partners Asset Management, Inc., is a wholly-owned subsidiary
of Guggenheim Partners, LLC and an affiliate of the sponsor, which offers
financial services expertise within its asset management, investment advisory,
capital markets, institutional finance and merchant banking business lines.
Clients consist of an elite mix of individuals, family offices, endowments,
foundations, insurance companies, pension plans and other institutions that
together have entrusted the firm with supervision of more than $100 billion in
assets. A global diversified financial services firm, Guggenheim Partners, LLC
office locations include New York, Chicago, Los Angeles, Miami, Boston,
Philadelphia, St. Louis, Houston, London, Dublin, Geneva, Hong Kong, Singapore,
Mumbai and Dubai.

The sponsor is also indirectly owned by Guggenheim Partners, LLC and is an
affiliate of GPAM.

Exchange-Traded Funds

Future Trusts

- --------------------------------------------------------------------------------
Essential Information
(as of the Inception Date)

Inception Date June 15, 2010

Unit Price $10.00

Termination Date September 16, 2011

Distribution Date 25th day of each month
(commencing July 25, 2010, if any)

Record Date 15th day of each month
(commencing July 15, 2010, if any)

CUSIP Numbers

Cash Distributions
Standard Accounts 18387M429
Fee Account Cash 18387M445

Reinvested Distributions
Standard Accounts 18387M437
Fee Account Reinvest 18387M452

Ticker CESTCX

Portfolio Diversification

Approximate
Sector Portfolio Percentage
- ------------------ --------------------
Commodity 19.90%
Equity 59.90
Fixed-Income 20.20
------
Total 100.00%
======

Market Approximate
Capitalization Portfolio Percentage
- ------------------ --------------------
Small-Capitalization 24.40%
Mid-Capitalization 52.96
Large-Capitalization 22.64
------
Total 100.00%
======

Minimum Investment
All accounts $250
- --------------------------------------------------------------------------------

Principal Risks

o The value of the fixed-income securities ETFs will generally fall if
interest rates, in general, rise. Typically, fixed-income securities
with longer periods before maturity are more sensitive to interest
rate changes.

dividends declared. This may result in a reduction in the value of
your units.

o Inflation may lead to a decrease in the value of assets or income from
investments.

See "Investment Risks" in Part A of the prospectus and "Risk Factors" in
Part B of the prospectus for additional information.

Who Should Invest

You should consider this investment if:

o The trust represents only a portion of your overall investment
portfolio;

o The trust is part of a longer-term investment strategy that includes
investment in subsequent portfolios, if available; and

o The trust is combined with other investment vehicles to provide
diversification of method to your overall portfolio.

You should not consider this investment if:

o You are uncomfortable with the trust's investment strategy;

o You are uncomfortable with the risks of an unmanaged investment in
securities; or

o You are seeking capital preservation as a primary investment
objective.

Fees and Expenses

The amounts below are estimates of the direct and indirect expenses that
you may incur based on a $10 unit price. Actual expenses may vary.

Percentage
of Public Amount Per
Offering $1,000
Investor Fees Price (4) Invested
- ------------------------- ----------- ---------
Initial sales fee
paid on purchase (1) 1.00% $ 10.00
Deferred sales fee (2) 1.45 14.50
Creation and
development fee (3) 0.50 5.00
------- -------
Maximum sales fees
(including creation
and development fee) 2.95% $ 29.50
======= =======

Estimated organization costs
(amount per 100 units paid
by the trust at the end of the
initial offering period or
after six months, at the
discretion of the sponsor) $7.50
========

Approximate
Annual Fund % of Public
Operating Offering Amount Per
Expenses Price (4) 100 Units
- ------------------------- ----------- ---------
Trustee's fee 0.1050% $1.050
Sponsor's supervisory fee 0.0300 0.300
Evaluator's fee 0.0350 0.350
Bookkeeping and
administrative fee 0.0350 0.350
Estimated other trust
operating expenses (5) 0.0199 0.199
Estimated acquired Fund
expenses (6) 0.2671 2.671
-------- ------
Total 0.4920% $4.920
======== ======

(3) The C&D Fee compensates the sponsor for creating and developing your trust.
The actual C&D Fee is $0.050 per unit and is paid to the sponsor at the
close of the initial offering period, which is expected to be approximately
three months from the Inception Date. The percentages provided are based on
a $10 unit as of the Inception Date and the percentage amount will vary
over time. If the unit price exceeds $10.00 per unit, the C&D Fee will be
less than 0.50% of the Public Offering Price; if the unit price is less
than $10.00 per unit, the C&D Fee will exceed 0.50% of the Public Offering
Price. However, in no event will the maximum sales fee exceed 2.95% of a
unitholder's initial investment.

(4) Based on 100 units with a $10.00 per unit Public Offering Price as of the
Inception Date.

Example

1 year $ 422
3 years 1,075
5 years 1,750
10 years 3,535

These amounts are the same regardless of whether you sell your investment
at the end of a period or continue to hold your investment. The example does
not consider any brokerage fees or transaction fees that broker-dealers may
charge for processing redemption requests.

See "Expenses of the Trust" in Part B of the prospectus for additional
information.

Trust Portfolio

Claymore Securities Defined Portfolios, Series 688
Guggenheim Growth Asset Allocation Portfolio of ETFs, Series 3
The Trust Portfolio as of the Inception Date, June 15, 2010
- ---------------------------------------------------------------------------------------------------------------
Percentage
of Aggregate Initial Per Share Cost To
Ticker Company Name (1) Offer Price Shares Price Portfolio (2)(3)
- ---------------------------------------------------------------------------------------------------------------

EXCHANGE-TRADED FUNDS (100.00%)
Commodity (19.90%)
IXC iShares S&P Global Energy Sector Index Fund 1.99% 93 $ 31.8800 $ 2,965
MXI iShares S&P Global Materials Sector Index Fund 1.98 53 55.8700 2,961
SLV iShares Silver Trust ^ 1.99 166 17.8600 2,965
MOO Market Vectors - Agribusiness ETF 4.94 193 38.2300 7,378
KOL Market Vectors - Coal ETF 3.95 183 32.2400 5,900
GLD SPDR Gold Trust ^ 5.05 63 119.6000 7,535
Equity (59.90%)
XLP Consumer Staples Select Sector SPDR Fund 3.51 197 26.6200 5,244
XLV Health Care Select Sector SPDR Fund 3.50 179 29.2100 5,229
IVW iShares S&P 500 Growth Index Fund 11.93 317 56.1800 17,809
IVE iShares S&P 500 Value Index Fund 5.98 169 52.8000 8,923
IXP iShares S&P Global Telecommunications Sector
Index Fund 3.51 104 50.3400 5,235
IJH iShares S&P MidCap 400 Index Fund 5.98 117 76.2200 8,918
IJR iShares S&P SmallCap 600 Index Fund 5.99 155 57.6800 8,940
XLU Utilities Select Sector SPDR Fund 3.51 178 29.3900 5,231
VWO Vanguard Emerging Markets ETF 4.97 191 38.8400 7,418
VGK Vanguard European ETF 2.99 106 42.0400 4,456
VPL Vanguard Pacific ETF 8.03 243 49.2900 11,977
Fixed-Income (20.20%)
CSJ iShares Barclays 1-3 Year Credit Bond Fund 5.06 73 103.4700 7,553
TIP iShares Barclays Treasury Inflation Protected
Securities (TIPS) Bond Fund 2.55 36 105.7300 3,806
LQD iShares iBoxx Investment Grade Corporate Bond Fund 10.07 142 105.8300 15,028
JNK SPDR Barclays Capital High Yield Bond ETF 2.52 100 37.6500 3,765
------------
$ 149,236
============

(3) There was a $92 loss to the sponsor on the Inception Date.

^ Non-income producing security.

================================================================================
UNDERSTANDING YOUR INVESTMENTS

How to Buy Units

You can buy units of your trust on any business day by contacting your
financial professional. Public offering prices of units are available daily on
the Internet at www.claymore.com. The unit price includes:

o the value of the securities,

o organization costs,

o the maximum sales fee (which includes an initial sales fee, a deferred
sales fee and the creation and development fee), and

o cash and other net assets in the portfolio.

We often refer to the purchase price of units as the "offer price" or the
"Public Offering Price." We must receive your order to buy units prior to the
close of the New York Stock Exchange (normally 4:00 p.m. Eastern time) to give
you the price for that day. If we receive your order after this time, you will
receive the price computed on the next business day.

Value of the Securities. The sponsor serves as the evaluator of the trust
(the "evaluator"). We cause the trustee to determine the value of the
securities as of the close of the New York Stock Exchange on each day that the
exchange is open (the "Evaluation Time").

Pricing the Securities. The value of securities is generally determined by
using the last sale price for securities traded on a national or foreign
securities exchange or the Nasdaq Stock Market. In some cases we will price a
security based on the last asked or bid price in the over-the-counter market or
by using other recognized pricing methods. We will only do this if a security is
not principally traded on a national or foreign securities exchange or the
Nasdaq Stock Market, or if the market quotes are unavailable or inappropriate.

The trustee determined the initial prices of the securities shown in
"Trust Portfolio" for your trust in this prospectus. Such prices were
determined as described above at the close of the New York Stock Exchange on
the business day before the date of this prospectus. On the first day we sell
units we will compute the unit price as of the close of the New York Stock
Exchange or the time the registration statement filed with the Securities and
Exchange Commission becomes effective, if later.

Organization Costs. During the initial offering period, part of your
purchase price includes a per unit amount sufficient to reimburse us for some
or all of the costs of creating your trust. These costs include the costs of
preparing the registration statement and legal documents, legal fees, federal
and state registration fees and the initial fees and expenses of the trustee.
Your trust will sell securities to reimburse us for these costs at the end of
the initial offering period or after six months, at the discretion of the
sponsor. Organization costs will not exceed the estimate set forth under "Fees
and Expenses."

Transactional Sales Fee. You pay a fee when you buy units. We refer to
this fee as the "transactional sales fee." The transaction sales fee has both
an initial and a deferred component and is 2.45% of the Public Offering Price,
based on a $10 unit. This percentage amount of the transactional sales fee is
based on the unit price on the Inception Date. Because the transactional sales
fee equals the difference between the maximum sales fee and the C&D Fee, the
percentage and dollar

amount of the transactional sales fee will vary as the unit price varies.

The transactional sales fee does not include the C&D Fee which is
described under "Expenses of the Trust" in Part B of the prospectus and in
"Fees and Expenses" in Part A of the prospectus.

Initial Sales Fee. Based on a $10 unit, the initial sales fee is initially
1% of the Public Offering Price. The initial sales fee, which you will pay at
the time of purchase, is equal to the difference between the maximum sales fee
(2.95% of the Public Offering Price) and the sum of the maximum remaining
deferred sales fees and the C&D Fee (initially $0.195 per unit). The dollar
amount and percentage amount of the initial sales fee will vary over time.

Deferred Sales Fee. To keep your money working longer, we defer payment of
the rest of the transactional sales fee through the deferred sales fee ($0.145
per unit).

In limited circumstances and only if deemed in the best interests of
unitholders, the sponsor may delay the payment of the deferred sales fee from
the dates listed under "Fees and Expenses."

Reducing Your Sales Fee. We offer a variety of ways for you to reduce the
maximum sales fee you pay. It is your financial professional's responsibility to
alert us of any discount when you order units. Since the deferred sales fee and
the C&D Fee are a fixed dollar amount per unit, your trust must charge the
deferred sales fee and the C&D Fee per unit regardless of any discounts.
However, when you purchase units of the trust, if you are eligible to receive a
discount such that your total maximum sales fee is less than the fixed dollar
amount of the deferred sales fee and the C&D Fee, the sponsor will credit you
the difference between your maximum sales fee and the sum of the deferred sales
fee and the C&D Fee at the time you buy units by providing you with additional
units.

Large Purchases. You can reduce your maximum sales fee by increasing the
size of your investment.

Investors who make large purchases are entitled to the following sales
charge reductions:

Sales Charge
Reductions (as a
% of the Public
Purchase Amount Offering Price)
- ------------------ ----------------
Less than $50,000 0.00%
$50,000 - $99,999 0.25
$100,000 - $249,999 0.50
$250,000 - $499,999 0.75
$500,000 - $999,999 1.00
$1,000,000 or more 1.50

You may aggregate unit purchases by the same person on any single day from
any one broker-dealer to qualify for a purchase level. You can include these
purchases as your own for purposes of this aggregation:

o purchases by your spouse or minor children, and

o purchases by your trust estate or fiduciary accounts.

The discounts described above apply only during the initial offering
period.

There can be no assurance that the sponsor will create future trusts with
investment strategies similar to your trust or that may fit within your
investment parameters.

Advisory and Fee Accounts. We eliminate your transactional sales fee for
purchases made through registered investment advisers, certified financial
planners or registered broker-dealers who charge periodic fees in lieu of
commissions or who charge for financial planning or for investment advisory or
asset management services or provide these services as part of an investment
account where a comprehensive "wrap fee" is imposed (a "Fee Account").

This discount applies during the initial offering period and in the
secondary market. Your financial professional may purchase units with the Fee
Account CUSIP numbers to facilitate purchases under this discount, however, we
do not require that you buy units with these CUSIP numbers to qualify for the
discount. If you purchase units with these special CUSIP numbers, you should be
aware that you may have the distributions automatically reinvest into
additional units of your trust or receive cash distributions. We reserve the
right to limit or deny purchases of units not subject to the transactional
sales fee by investors whose frequent trading activity we determine to be
detrimental to your trust. We, as sponsor, will receive and you will pay the
C&D Fee. See "Expenses of the Trust" in Part B of the prospectus for additional
information.

Exchange or Rollover Option. If you are buying units of the trust in the
primary market with redemption or termination proceeds from any other Claymore
unit trust, you may purchase units at 99% of the maximum Public Offering Price,
which may include an up-front sales fee and a deferred sales fee. You may also
buy units with this reduced sales fee if you are purchasing units in the primary
market with (1) the termination proceeds from a non-Claymore unit trust with a
similar investment strategy or (2) the redemption proceeds from a non-Claymore
trust if such trust has a similar investment strategy and that trust is
scheduled to terminate within 30 days of redemption. To qualify for this sales
charge reduction, the termination or redemption proceeds being used to purchase
units of the trust must be no more than 30 days old. Such purchases entitled to
this sales charge reduction may be classified as "Rollover Purchases." An
exchange or rollover is generally treated as a sale for federal income tax
purposes. See "Taxes" in Part B of the prospectus.

Rollover Purchases are also subject to the C&D Fee. See "Expenses of the
Trust" in Part B of the prospectus.

Employees. We do not charge the portion of the transactional sales fee
that we would normally pay to your financial professional for purchases made by
officers, directors and employees and their family members (spouses, children
and parents) of Claymore and its affiliates, or by registered representatives
of selling firms and their family members (spouses, children and parents). You
pay only the portion of the fee that the sponsor retains. Such purchases are
also subject to the C&D Fee. This discount applies during the initial offering
period and in the secondary market. Only those broker-dealers that allow their
employees to participate in employee discount programs will be eligible for
this discount.

Dividend Reinvestment Plan. We do not charge any transactional sales fee
when you reinvest distributions from your trust into additional units of the
trust. Since the deferred sales fee is a fixed dollar amount per unit, your
trust must charge the deferred sales fee per unit regardless of this discount.
If you elect the distribution reinvestment plan, we will credit you with
additional units with a dollar value sufficient to cover the amount of any
remaining

deferred sales fee that will be collected on such units at the time of
reinvestment. The dollar value of these units will fluctuate over time. This
discount applies during the initial offering period and in the secondary
market.

See "Purchase, Redemption and Pricing of Units" in Part B of the
prospectus for more information regarding buying units.

How We Distribute Units. We sell units to the public through
broker-dealers and other firms. We pay part of the sales fee you pay to these
distribution firms when they sell units. The distribution fee paid for a given
transaction is as follows:

Concession
per Unit (as a
Purchase Amount/ % of the Public
Form of Purchase Offering Price)
- ------------------- ---------------
Less than $50,000 2.25%
$50,000 - $99,999 2.00
$100,000 - $249,999 1.75
$250,000 - $499,999 1.50
$500,000 - $999,999 1.25
$1,000,000 or more 0.75
Rollover Purchases 1.30
Fee Account and
Employee Purchases 0.00

We apply these amounts as a percent of the unit price per transaction at
the time of the transaction.

Broker-dealers and other firms that sell units of certain Claymore unit
trusts are eligible to receive additional compensation for volume sales. Such
payments will be in addition to the regular concessions paid to dealer firms as
set forth in the applicable trust's prospectus. The additional payments will be
equal to 0.10% of the value of eligible Claymore unit trusts sold in the primary
market during a calendar quarter so long as the broker-dealers or other firms
sell at least $25 million of eligible Claymore unit trusts during the calendar
quarter. Eligible unit trusts include all Claymore unit trusts sold in the
primary market. Redemptions of units during the primary offering period will
reduce the amount of units used to calculate the volume concessions. In
addition, dealer firms will not receive volume concessions on the sale of units
which are not subject to a transactional sales fee. However, such sales will be
included in determining whether a firm has met the sales level breakpoints for
volume concessions.

Claymore reserves the right to modify or terminate the volume concession
program at any time. The sponsor may also pay to certain dealers an
administrative fee for information or service used in connection with the
distribution of trust units. Such amounts will be in addition to any
concessions received for the sale of units.

In addition to the concessions described above, the sponsor may pay
additional compensation out of its own assets to broker-dealers that meet
certain sales targets and that have agreed to provide services relating to the
trust to their customers.

Other Compensation and Benefits to Broker-Dealers. The sponsor, at its own
expense and out of its own profits, may provide additional compensation and
benefits to broker-dealers who sell shares of units of this trust and other
Claymore products. This compensation is intended to result in additional sales
of Claymore products and/or compensate broker-dealers and financial advisors
for past sales. A number of factors are considered in determining whether to
pay these additional amounts. Such factors may include, but are not limited to,
the level or type of services provided by the intermediary, the level or
expected level of sales of Claymore products by the

intermediary or its agents, the placing of Claymore products on a preferred or
recommended product list, access to an intermediary's personnel, and other
factors.

The sponsor makes these payments for marketing, promotional or related
expenses, including, but not limited to, expenses of entertaining retail
customers and financial advisers, advertising, sponsorship of events or
seminars, obtaining information about the breakdown of unit sales among an
intermediary's representatives or offices, obtaining shelf space in
broker-dealer firms and similar activities designed to promote the sale of the
sponsor's products. The sponsor may make such payments to many intermediaries
that sell Claymore products. The sponsor may also make certain payments to, or
on behalf of, intermediaries to defray a portion of their costs incurred for
the purpose of facilitating unit sales, such as the costs of developing trading
or purchasing trading systems to process unit trades.

Payments of such additional compensation, some of which may be
characterized as "revenue sharing," may create an incentive for financial
intermediaries and their agents to sell or recommend a Claymore product,
including the trust, over products offered by other sponsors or fund companies.
These arrangements will not change the price you pay for your units.

We generally register units for sale in various states in the United
States. We do not register units for sale in any foreign country. It is your
financial professional's responsibility to make sure that units are registered
or exempt from registration if you are a foreign investor or if you want to buy
units in another country. This prospectus does not constitute an offer of units
in any state or country where units cannot be offered or sold lawfully. We may
reject any order for units in whole or in part.

We may gain or lose money when we hold units in the primary or secondary
market due to fluctuations in unit prices. The gain or loss is equal to the
difference between the price we pay for units and the price at which we sell or
redeem them. We may also gain or lose money when we deposit securities to
create units. For example, we lost the amounts set forth in "Trust Portfolio"
on the initial deposit of securities into the trust.

See "Purchase, Redemption and Pricing of Units" in Part B of the
prospectus for additional information.

How to Sell Your Units

You can sell your units on any business day by contacting your financial
professional or, in some cases, the trustee. Unit prices are available daily on
the Internet at www.claymore.com or through your financial professional. We
often refer to the sale price of units as the "liquidation price." You pay any
remaining deferred sales fee when you sell or redeem your units. Certain
broker-dealers may charge a transaction fee for processing unit redemptions or
sale requests.

Until the end of the initial offering period or six months after the
Inception Date, at the discretion of the sponsor, the price at which the
trustee will redeem units and the price at which the sponsor may repurchase
units include estimated organization costs. After such period, the amount paid
will not include such estimated organization costs.

Selling Units. We do not intend to but may maintain a secondary market for
units. This means that if you want to sell your units, we may buy them at the
current price which is based on their net asset value. We may then resell the
units to other investors at the public offering price or redeem them for the

redemption price. Our secondary market repurchase price is generally the same
as the redemption price. Certain broker-dealers might also maintain a secondary
market in units. You should contact your financial professional for current
unit prices to determine the best price available. We may discontinue our
secondary market at any time without notice. Even if we do not make a market,
you will be able to redeem your units with the trustee on any business day for
the current price.

Redeeming Units. You may also be able to redeem your units directly with
the trustee, The Bank of New York Mellon, on any day the New York Stock
Exchange is open. The trustee must receive your completed redemption request
prior to the close of the New York Stock Exchange for you to receive the unit
price for a particular day. (For what constitutes a completed redemption
request, see "Purchase, Redemption and Pricing of Units--Redemption" in Part B
of the prospectus.) If your request is received after that time or is
incomplete in any way, you will receive the next price computed after the
trustee receives your completed request. Rather than contacting the trustee
directly, your financial professional may also be able to redeem your units by
using the Investors' Voluntary Redemptions and Sales (IVORS) automated
redemption service offered through Depository Trust Company.

If you redeem your units, the trustee will generally send you a payment
for your units no later than three business days after it receives all
necessary documentation.

You can generally request an in-kind distribution of the securities
underlying your units if you own units worth at least $25,000 or you originally
paid at least that amount for your units. This option is generally available
only for securities traded and held in the United States and is not available
within 30 business days of the trust's termination. We may modify or discontinue
this option at any time without notice. If you request an in-kind distribution
of the securities underlying units of your trust, you will incur any
distribution or service fees (Rule 12b-1 fees) applicable to those securities.

Exchange Option. You may be able to exchange your units for units of other
Claymore unit trusts at a reduced sales fee. You can contact your financial
professional or Claymore for more information about trusts currently available
for exchanges. Before you exchange units, you should read the prospectus
carefully and understand the risks and fees. You should then discuss this
option with your financial professional to determine whether your investment
goals have changed, whether current trusts suit you and to discuss tax
consequences. To qualify for a reduced sales fee, you may need to meet certain
criteria. We may discontinue this option at any time.

For more complete information regarding selling or redeeming your units,
see "Purchase, Redemption and Pricing of Units" in Part B of the prospectus.

Distributions

Dividends. Your trust generally pays dividends from its net investment
income, if any, along with any excess capital on each distribution date to
unitholders of record on the preceding record date. You can elect to:

o reinvest distributions in additional units of your trust at no fee, or

o receive distributions in cash.

You may change your election by contacting your financial professional or
the trustee. Once you elect to participate in a reinvestment program, the
trustee will

automatically reinvest your distributions into additional units at their net
asset value three business days prior to the distribution date. We waive the
sales fee for reinvestments into units of your trust. We cannot guarantee that
units will always be available for reinvestment. If units are unavailable, you
will receive cash distributions. We may discontinue these options at any time
without notice.

Distributions will be made from the Income and Capital Accounts on the
distribution date provided the aggregate amount available for distribution
equals at least 0.1% of the net asset value of your trust. Undistributed money
in the Income and Capital Accounts will be distributed in the next month in
which the aggregate amount available for distribution equals or exceeds 0.1% of
the net asset value of your trust.

In some cases, your trust might pay a special distribution if it holds an
excessive amount of principal pending distribution. For example, this could
happen as a result of a merger or similar transaction involving a company whose
security is in your portfolio. The amount of your distributions will vary from
time to time as companies change their dividends, trust expenses change or as a
result of changes in a trust's portfolio.

Reinvest in Your Trust. You can keep your money working by electing to
reinvest your distributions in additional units of your trust. The easiest way
to do this is to have your financial professional purchase units with one of the
Reinvestment CUSIP numbers listed in the "Investment Summary" section of this
prospectus. You may also make or change your election by contacting your
financial professional or the trustee. This reinvestment option may be subject
to availability or limitation by the broker-dealer or selling firm. In certain
circumstances, broker-dealers may suspend or terminate the offering of a
reinvestment option at any time.

Reports. The trustee will send your financial professional a statement
showing income and other receipts of your trust for each distribution. Each
year the trustee will also provide an annual report on your trust's activity
and certain tax information. You can request copies of security evaluations to
enable you to complete your tax forms and audited financial statements for your
trust, if available.

See "Administration of the Trust" in Part B of the prospectus for
additional information.

Investment Risks

All investments involve risk. This section describes the main risks that
can impact the value of the securities in your trust. You should understand
these risks before you invest. You could lose some or all of your investment in
the trust. Recently, equity markets have experienced significant volatility. If
the value of the securities falls, the value of your units will also fall. We
cannot guarantee that your trust will achieve its objective or that your
investment return will be positive over any period.

Market risk. Market risk is the risk that a particular security in a
trust, the trust itself or securities in general may fall in value. Market
value may be affected by a variety of factors including:

o General securities markets movements;

o Changes in the financial condition of an issuer or a sector;

o Changes in perceptions about an issuer or a sector;

o Interest rates and inflation;

o Governmental policies and litigation; and

o Purchases and sales of securities by a trust.

Even though we carefully supervise the portfolio, you should remember that
we do not manage the portfolio. Your trust will not sell a security solely
because the market value falls as is possible in a managed fund.

Current Economic Conditions Risk. The U.S. economy's recession began in
December 2007 and lasted through most of 2009. This recession began with
problems in the housing and credit markets, many of which were caused by
defaults on "subprime" mortgages and mortgage-backed securities, eventually
leading to the failures of some large financial institutions. Economic activity
declined across all sectors of the economy, and the United States has
experienced increased unemployment. The economic crisis affected the global
economy with European and Asian markets also suffering historic losses.
Although the latest economic data suggests that the recession may be over and
that the U.S. economy will experience slightly increased activity in 2010,
unemployment remains high and global markets remain volatile. Due to the
current state of uncertainty in the economy, the value of the securities held
by a trust may be subject to steep declines or increased volatility due to
changes in performance or perception of the issuers. Extraordinary steps have
been taken by the governments of several leading economic countries to combat
the economic crisis; however, the impact of these measures is not yet fully
known and cannot be predicted.

Exchange-traded funds risk. The trusts invest in shares of ETFs. ETFs are
investment pools that hold other securities. The ETFs in the trust are usually
passively-managed index funds that seek to replicate the performance or
composition of a recognized securities index. The ETFs held by the trust are
either open-end management investment companies or unit investment trusts
registered under the Investment Company Act of 1940, as amended. Unlike typical
open-end funds or unit investment trusts, ETFs generally do not sell or redeem
their individual shares at net asset value. ETFs generally sell and redeem
shares in large blocks (often known as "Creation Units"); however, the sponsor
does not intend to sell or redeem ETFs in this manner. In addition, securities
exchanges list ETF shares for trading, which allows investors to purchase and
sell individual ETF shares at current market prices throughout the day. The
trust will purchase and sell ETF shares on these securities exchanges. ETFs
therefore possess characteristics of traditional open-end funds and unit
investment trusts, which issue redeemable shares, and of corporate common stocks
or closed-end funds, which generally issue shares that trade at negotiated
prices on securities exchanges and are not redeemable.

ETFs are subject to various risks, including management's ability to meet
the fund's investment objective, and to manage the fund's portfolio when the
underlying securities are redeemed or sold, during periods of market turmoil
and as investors' perceptions regarding ETFs or their underlying investments
change. The trust and the underlying funds have management and operating
expenses. You will bear not only your share of your trust's expenses, but also
the expenses of the underlying funds. By investing in other funds, the trust
incurs greater expenses than you would incur if you invested directly in the
funds. Shares of ETFs may trade at a discount from their net asset value in the
secondary market. This risk is separate and distinct from the risk that the net
asset value of the ETF shares may decrease. The amount of such discount from
net asset value is subject to change from time to time in response to various
factors.

Index correlation risk. Index correlation risk is the risk that the
performance of an ETF will vary from the actual performance of the ETF's target
index, known as "tracking error." This can happen due to transaction costs,
market impact, corporate actions (such as mergers and spin-offs) and timing
variances. Some ETFs use a technique called "representative sampling," which
means that the ETF invests in a representative sample of securities in its
target index rather than all of the index securities. This could increase the
risk of a tracking error.

Commodities risk. Certain ETFs held by the trust invest in commodities and
securities issued by companies involved with the production of certain
commodities. Commodity companies include those companies involved in the
production of building materials, aluminum, non-ferrous metals, precious metals
and steel and other commodities as well as companies that explore for, produce,
refine, distribute or sell petroleum, gas products or other commodities.
General risks of commodity companies include price and supply fluctuations,
excess capacity, economic recession, government regulations and overall capital
spending levels. In addition, these companies may be affected by volatility of
commodity prices, import controls, worldwide competition, liability for
environmental damage, and depletion of resources. Exposure to commodities
markets may subject the trust to greater volatility than other investments.
Certain commodities may be produced in a limited number of countries and may be
controlled by a small number of producers.

Credit and income risk. Credit risk is the risk that the issuer of a debt
security held by an ETF in the trust is unable to make interest and/or
principal payments on the security. An issuer's credit rating or general market
assessments of the issuer's ability to pay its obligations may affect the
market value of the securities in the trust.

Small-capitalization and mid-capitalization company risk. Your trust
includes ETFs that hold securities issued by small-capitalization and
mid-capitalization companies. These securities customarily involve more
investment risk than larger capitalization or more seasoned securities. These
additional risks are due in part to the following factors. Small-capitalization
and mid-capitalization companies may:

o Have limited product lines, markets or financial resources;

o Be new and developing companies which seek to develop and utilize new
and/or emerging technologies. These technologies may be slow to
develop or fail to develop altogether;

o Have less publicly available information;

o Lack management depth or experience;

o Be less liquid;

o Be more vulnerable to adverse general market or economic developments;
and

o Be dependent upon products that were recently brought to market or key
personnel.

Foreign securities risk. Certain ETFs held by your trust invest in foreign
securities. Securities of foreign issuers present risks beyond those of
domestic securities. The prices of foreign securities can be more volatile than
U.S. securities due to such factors as political, social and economic
developments abroad, the differences between the regulations to which U.S. and
foreign issuers and markets are subject, the seizure by the government of
company assets, excessive taxation, withholding taxes on dividends and
interest,

limitations on the use or transfer of portfolio assets, and political or social
instability. Other risks include the following:

o Enforcing legal rights may be difficult, costly and slow in foreign
countries, and there may be special problems enforcing claims against
foreign governments.

o Foreign issuers may not be subject to accounting standards or
governmental supervision comparable to U.S. issuers, and there may be
less public information about their operations.

o Foreign markets may be less liquid and more volatile than U.S.
markets.

o Foreign securities often trade in currencies other than the U.S.
dollar. Changes in currency exchange rates may affect a trust's value,
the value of dividends and interest earned, and gains and losses
realized on the sale of securities. An increase in the strength of the
U.S. dollar relative to these other currencies may cause the value of
a trust to decline. Certain foreign currencies may be particularly
volatile, and foreign governments may intervene in the currency
markets, causing a decline in value or liquidity in a trust's foreign
currency holdings.

o Future political and governmental restrictions which might adversely
affect the payment or receipt of income on the foreign securities.

Emerging market risk. Certain ETFs held by your trust may invest in
securities issued by companies headquartered or incorporated in countries
considered to be emerging markets. Emerging markets are generally defined as
countries with low per capita income in the initial stages of their
industrialization cycles. Risks of investing in developing or emerging countries
include the possibility of investment and trading limitations, liquidity
concerns, delays and disruptions in settlement transactions, political
uncertainties and dependence on international trade and development assistance.
In addition, emerging market countries may be subject to overburdened
infrastructures, obsolete financial systems and environmental problems. For
these reasons, investments in emerging markets are often considered speculative.

Litigation and legislation risk. Your trust is also subject to litigation
and legislation risk. From time to time, various legislative initiatives are
proposed in the United States and abroad which may have a negative impact on
certain of the companies represented in your trust. In addition, litigation
regarding any of the issuers of the securities or of the sectors represented by
these issuers, may raise potential bankruptcy concerns and may negatively
impact the share prices of these securities. We cannot predict what impact any
pending or threatened litigation or any bankruptcy concerns will have on the
share prices of the securities.

Inflation risk. Inflation risk is the risk that the value of assets or
income from investments will be less in the future as inflation decreases the
value of money.

See "Risk Factors" in Part B of the prospectus for additional
information.

How the Trust Works

Your Trust. Your trust is a unit investment trust registered under the
Investment Company Act of 1940 and the Securities Act of 1933. We created the
trust under a trust agreement

between Claymore Securities, Inc. (as sponsor, evaluator and supervisor) and
The Bank of New York Mellon (as trustee). To create your trust, we deposited
contracts to purchase securities with the trustee along with an irrevocable
letter of credit or other consideration to pay for the securities. In exchange,
the trustee delivered units of your trust to us. Each unit represents an
undivided interest in the assets of your trust. These units remain outstanding
until redeemed or until your trust terminates.

Changing Your Portfolio. Your trust is not a managed fund. Unlike a
managed fund, we designed your portfolio to remain relatively fixed after its
inception. Your trust will generally buy and sell securities:

o to pay expenses,

o to issue additional units or redeem units,

o in limited circumstances to protect the trust,

o to avoid direct or indirect ownership of a passive foreign investment
company,

o to make required distributions or avoid imposition of taxes on the
trust, or

o as permitted by the trust agreement.

Your trust will generally reject any offer for securities or property other
than cash in exchange for the securities in its portfolio. However, if a public
tender offer has been made for a security or a merger or acquisition has been
announced affecting a security, your trust may either sell the security or
accept a tender offer for cash if the supervisor determines that the sale or
tender is in the best interest of unitholders. The trustee will distribute any
cash proceeds to unitholders. If your trust receives securities or property
other than cash, it may either hold the securities or property in its portfolio
or sell the securities or property and distribute the proceeds. For example,
this could happen in a merger or similar transaction.

We will increase the size of your trust as we sell units. When we create
additional units, we will seek to replicate the existing portfolio. When your
trust buys securities, it will pay brokerage or other acquisition fees. You
could experience a dilution of your investment because of these fees and
fluctuations in security prices between the time we create units and the time
your trust buys the securities. When your trust buys or sells securities, we
may direct that it place orders with and pay brokerage commissions to brokers
that sell units or are affiliated with your trust. We will not select firms to
handle these transactions on the basis of their sale of units of a trust. We
cannot guarantee that a trust will keep its present size and composition for
any length of time.

Termination of Your Trust. Your trust will terminate no later than the
termination date listed in the "Investment Summary" section of this prospectus.
The trustee may terminate your trust early if the value of the trust is less
than $1 million or less than 40% of the value of the securities in the trust at
the end of the initial offering period. At this size, the expenses of your
trust may create an undue burden on your investment. Investors owning
two-thirds of the units in your trust may also vote to terminate the trust
early. We may also terminate your trust in other limited circumstances.

The trustee will notify you of any termination and sell any remaining
securities. The trustee will send your final distribution to you within a
reasonable time following liquidation of all the securities after deducting
final expenses. Your termination distribution may be less than the price you
originally paid for your units.

See "Administration of the Trust" in Part B of the prospectus for
additional information.

General Information

Claymore. Claymore Securities, Inc. specializes in the creation,
development and distribution of investment solutions for advisors and their
valued clients. In November 2001, we changed our name from Ranson & Associates,
Inc. to Claymore Securities, Inc. During our history we have been active in
public and corporate finance, have underwritten closed-end funds and have
distributed bonds, mutual funds, closed-end funds, exchange-traded funds,
structured products and unit trusts in the primary and secondary markets. We
are a registered broker-dealer and member of the Financial Industry Regulatory
Authority (FINRA). If we fail to or cannot perform our duties as sponsor or
become bankrupt, the trustee may replace us, continue to operate your trust
without a sponsor, or terminate your trust. You can contact us at our
headquarters at 2455 Corporate West Drive, Lisle, Illinois 60532 or by using
the contacts listed on the back cover of this prospectus. Claymore personnel
may from time to time maintain a position in certain securities held by your
trust.

On October 14, 2009, Claymore Group Inc., the parent of the sponsor,
became a wholly-owned subsidiary of Claymore Holdings, LLC, which is a
wholly-owned, indirect subsidiary of Guggenheim Partners, LLC.

Claymore and your trust have adopted a code of ethics requiring Claymore's
employees who have access to information on trust transactions to report
personal securities transactions. The purpose of the code is to avoid potential
conflicts of interest and to prevent fraud, deception or misconduct with
respect to your trust.

See "Administration of the Trust" in Part B of the prospectus for
additional information.

The Trustee. The Bank of New York Mellon is the trustee of your trust. It
is a trust company organized under New York law. You can contact the trustee by
calling the telephone number on the back cover of this prospectus or write to
Unit Investment Trust Division, 2 Hanson Place, 12th Fl., Brooklyn, New York
11217. We may remove and replace the trustee in some cases without your
consent. The trustee may also resign by notifying Claymore and investors.

See "Administration of the Trust" in Part B of the prospectus for
additional information.

Expenses

Your trust will pay various expenses to conduct its operations. The
"Investment Summary" section of this prospectus shows the estimated amount of
these expenses.

Your trust will pay a fee to the trustee for its services. The trustee
also benefits when it holds cash for your trust in non-interest bearing
accounts. Your trust will reimburse us as supervisor and evaluator for
providing portfolio supervisory services, evaluating your portfolio and
performing bookkeeping and administrative services. Our reimbursements may
exceed the costs of the services we provide to your trust but will not exceed
the costs of services provided to all Claymore unit investment trusts in any
calendar year. In addition, the trustee may reimburse the sponsor out of its
own assets for services performed by employees of the sponsor in connection
with the operation of your trust. All of these fees may adjust for inflation
without your approval.

Your trust will pay a fee to the sponsor for creating and developing the
trust, including determining the trust objective, policies, composition and
size, selecting service providers and information services, and for providing
other similar administrative and ministerial functions. Your trust pays this
"creation and

development fee" of $0.05 per unit from the assets of the trust as of the close
of the initial public offering period. The sponsor does not use the fee to pay
distribution expenses or as compensation for sales efforts.

Your trust will also pay its general operating expenses, including any
licensing fees. Your trust may pay expenses such as trustee expenses (including
legal and auditing expenses), organization expenses, various governmental
charges, fees for extraordinary trustee services, costs of taking action to
protect your trust, costs of indemnifying the trustee and Claymore, legal fees
and expenses, expenses incurred in contacting you and costs incurred to
reimburse the trustee for advancing funds to meet distributions. Your trust may
pay the costs of updating its registration statement each year. The trustee may
sell securities to pay trust expenses.

Your trust, and therefore the unitholders of your trust, will also
indirectly bear the expenses of the underlying ETFs. While your trust will not
pay these expenses directly out of its assets, these expenses are shown under
"Annual Fund Operating Expenses of the Trust" in the "Fees and Expenses"
section of the prospectus to illustrate the impact of these expenses. Please
note that the sponsor or an affiliate may be engaged as a service provider to
certain ETFs held by your trust and therefore certain fees paid by your trust
to such ETFs will be paid to the sponsor or an affiliate for its services to
such ETFs.

See "Expenses of the Trust" in Part B of the prospectus for additional
information.

Report of Independent Registered Public Accounting Firm

Unitholders

Claymore Securities Defined Portfolios, Series 688

We have audited the accompanying statements of financial condition,
including the trust portfolios set forth on pages 8 and 15 of this prospectus,
of Claymore Securities Defined Portfolios, Series 688, as of June 15, 2010, the
initial date of deposit. These statements of financial condition are the
responsibility of the trusts' sponsor. Our responsibility is to express an
opinion on these statements of financial condition based on our audits.

We conducted our audits in accordance with the auditing standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audits to obtain reasonable assurance
about whether the statements of financial condition are free of material
misstatement. The trusts are not required to have, nor were we engaged to
perform audits of their internal control over financial reporting. Our audits
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
trusts' internal control over financial reporting. Accordingly, we express no
such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statements of financial
condition, assessing the accounting principles used and significant estimates
made by the sponsor, as well as evaluating the overall financial statement
presentation. Our procedures included confirmation with The Bank of New York
Mellon, trustee, of cash or an irrevocable letter of credit deposited for the
purchase of securities as shown in the statements of financial condition as of
June 15, 2010. We believe that our audits of the statements of financial
condition provide a reasonable basis for our opinion.

In our opinion, the statements of financial condition referred to above
present fairly, in all material respects, the financial position of Claymore
Securities Defined Portfolios, Series 688, as of June 15, 2010, in conformity
with accounting principles generally accepted in the United States of America.

/s/ Grant Thornton LLP

Chicago, Illinois

June 15, 2010

Claymore Securities Defined Portfolios, Series 688
Statements of Financial Condition
as of the Inception Date, June 15, 2010
Moderate Growth
Asset Asset
Allocation Allocation
Investment in securities Trust Trust
Sponsor's contracts to purchase underlying securities
backed by cash deposited (1)(2) $ 149,391 $ 149,236
----------- -----------
$ 149,391 $ 149,236
========== ===========
Liabilities and interest of unitholders
Liabilities:
Organization costs (3) $ 1,132 $ 1,131
Creation and development fee (6) 755 754
Deferred sales fee (4) 2,188 2,186
----------- -----------
4,075 4,071
----------- -----------
Interest of unitholders:
Cost to unitholders (5) 150,900 150,740
Less: initial sales fee (4) 1,509 1,504
Less: organization costs, C&D and deferred
sales fees (3)(4)(5)(6) 4,075 4,071
----------- -----------
Net interest of unitholders 145,316 145,165
----------- -----------
Total $ 149,391 $ 149,236
=========== ===========
Number of units 15,090 15,074
=========== ===========
Net Asset Value per Unit $ 9.630 $ 9.630
=========== ===========

(1) Aggregate cost of the securities is based on the closing sale price
evaluations as determined by the trustee.

(2) Cash and/or a letter of credit has been deposited with The Bank of New York
Mellon, trustee, covering the funds (aggregating $149,474 and $149,328 per
trust) necessary for the purchase of the securities in the Moderate Asset
Allocation Trust and the Growth Asset Allocation Trust, respectively,
represented by purchase contracts.

(3) A portion of the Public Offering Price represents an amount sufficient to
pay for all or a portion of the costs incurred in establishing the trusts.
These costs have been estimated at $7.50 per 100 units of a trust. A
distribution will be made as of the close of the initial offering period or
six months after the initial date of deposit (at the discretion of the
sponsor) to an account maintained by the trustee from which this obligation
of the investors will be satisfied. Organization costs will not be assessed
to units that are redeemed prior to the close of the initial offering
period or six months after the initial date of deposit (at the discretion
of the sponsor). To the extent that actual organization costs are greater
than the estimated amount, only the estimated organization costs added to
the Public Offering Price will be deducted from the assets of a trust.

(4) The aggregate cost to unitholders includes a maximum sales fee which
consists of an initial sales fee, a deferred sales fee and a creation and
development fee. The initial sales fee is equal to the difference between
the maximum sales fee and the sum of the remaining deferred sales fee and
the creation and development fee. On the Inception Date, the maximum sales
fee is 2.95% of the Public Offering Price (equivalent to 2.980% of the net
amount invested). The deferred sales fee is equal to $0.145 per unit.

(5) The aggregate cost to investors includes the applicable transactional sales
fee assuming no reduction of transactional sales fees for quantity
purchases.

(6) Each trust is committed to pay a creation and development fee of $5.00 per
100 units at the close of the initial public offering period. The creation
and development fee will not be assessed to units that are redeemed prior
to the close of the initial offering period.

CLAYMORE SECURITIES DEFINED PORTFOLIOS

CLAYMORE PORTFOLIO PROSPECTUS

PART B DATED JUNE 15, 2010

The prospectus for a Claymore Securities Defined Portfolio (a "trust") is
divided into two parts. Part A of the prospectus relates exclusively to a
particular trust or trusts and provides specific information regarding each
trust's portfolio, strategies, investment objectives, expenses, financial
highlights, income and capital distributions, hypothetical performance
information, risk factors and optional features. Part B of the prospectus
provides more general information regarding the Claymore Securities Defined
Portfolios. You should read both parts of the prospectus and retain them for
future reference. Except as provided in Part A of the prospectus, the
information contained in this Part B will apply to each trust.

Contents

General Information 2
Investment Policies 2
Risk Factors 3
Administration of the Trust 16
Expenses of the Trust 22
Portfolio Transactions and Brokerage Allocation 24
Purchase, Redemption and Pricing of Units 24
Taxes 29
Experts 32
Description of Ratings 32

General Information

Each trust is one of a series of separate unit investment trusts created
under the name Claymore Securities Defined Portfolios and registered under the
Investment Company Act of 1940 and the Securities Act of 1933. Each trust was
created as a common law trust on the inception date described in the prospectus
under the laws of the state of New York. Each trust was created under a trust
agreement among Claymore Securities, Inc. (as sponsor, evaluator and
supervisor) and The Bank of New York Mellon (as trustee).

When your trust was created, the sponsor delivered to the trustee
securities or contracts for the purchase thereof for deposit in the trust and
the trustee delivered to the sponsor documentation evidencing the ownership of
units of the trust. After your trust is created, the sponsor may deposit
additional securities in the trust, contracts to purchase additional securities
along with cash (or a bank letter of credit in lieu of cash) to pay for such
contracted securities or cash (including a letter of credit) with instructions
to purchase additional securities. Such additional deposits will be in amounts
which will seek to replicate, as closely as practicable, the portfolio
immediately prior to such deposits. If the sponsor deposits cash, existing and
new investors may experience a dilution of their investments and a reduction in
their anticipated income because of fluctuations in the prices of the
securities between the time of the cash deposit and the purchase of the
securities and because the trust will pay the associated brokerage fees.

A trust consists of (a) the securities listed under "Trust Portfolio" in
the prospectus as may continue to be held from time to time in the trust, (b)
any additional securities acquired and held by the trust pursuant to the
provisions of the trust agreement and (c) any cash held in the accounts of the
trust. Neither the sponsor nor the trustee shall be liable in any way for any
failure in any of the securities. However, should any contract for the purchase
of any of the securities initially deposited in a trust fail, the sponsor will,
unless substantially all of the moneys held in the trust to cover such purchase
are reinvested in substitute securities in accordance with the trust agreement,
refund the cash and sales charge attributable to such failed contract to all
unitholders on the next distribution date.

Investment Policies

The trust is a unit investment trust and is not an "actively managed"
fund. Traditional methods of investment management for a managed fund typically
involve frequent changes in a portfolio of securities on the basis of economic,
financial and market analysis. The portfolio of a trust, however, will not be
actively managed and therefore the adverse financial condition of an issuer
will not necessarily require the sale of its securities from a portfolio.

The trust agreement provides that the sponsor may (but need not) direct
the trustee to dispose of a security in certain events such as the issuer
having defaulted on the payment on any of its outstanding obligations, the
issuer having qualified as a passive foreign investment company under the
Internal Revenue Code, or the price of a security has declined to such an
extent or other such credit factors exist so that in the opinion of the sponsor
the retention of such securities would be detrimental to the trust. If a public
tender offer has been made for a security or a merger or acquisition has been
announced affecting a security, the trustee may either sell the security or
accept a tender offer for cash if the supervisor determines that the sale or
tender is in the best interest of unitholders. The trustee will distribute any
cash proceeds to unitholders. Pursuant to the trust

agreement and with limited exceptions, the trustee may sell any securities or
other properties acquired in exchange for securities such as those acquired in
connection with a merger or other transaction. If offered such new or exchanged
securities or property other than cash, the trustee shall reject the offer.
However, in the event such securities or property are nonetheless acquired by
the trust, they may be accepted for deposit in a trust and either sold by the
trustee or held in a trust pursuant to the direction of the sponsor. Proceeds
from the sale of securities (or any securities or other property received by
the trust in exchange for securities) are credited to the Capital Account for
distribution to unitholders or to meet redemptions.

Except as stated in the trust agreement, or in the prospectus, the
acquisition by the trust of any securities other than the portfolio securities
is prohibited. The trustee may sell securities, designated by the sponsor, from
the trust for the purpose of redeeming units of a trust tendered for redemption
and the payment of expenses and for such other purposes as permitted under the
trust agreement.

Notwithstanding the foregoing, the trustee is authorized to reinvest any
funds held in the Capital or Income Accounts, pending distribution, in U.S.
Treasury obligations which mature on or before the next applicable distribution
date. Any obligations so acquired must be held until they mature and proceeds
therefrom may not be reinvested.

Proceeds from the sale of securities (or any securities or other property
received by a trust in exchange for securities) are credited to the Capital
Account of a trust for distribution to unitholders or to meet redemptions.
Except for failed securities and as provided in the prospectus or in the trust
agreement, the acquisition by a trust of any securities other than the
portfolio securities is prohibited. The trustee may sell securities from a
trust for limited purposes, including redeeming units tendered for redemption
and the payment of expenses.

Risk Factors

Stocks. An investment in units of a trust should be made with an
understanding of the risks inherent in an investment in equity securities,
including the risk that the financial condition of issuers of the securities
may become impaired or that the general condition of the stock market may
worsen (both of which may contribute directly to a decrease in the value of the
securities and thus, in the value of the units) or the risk that holders of
common stock have a right to receive payments from the issuers of those stocks
that is generally inferior to that of creditors of, or holders of debt
obligations issued by, the issuers and that the rights of holders of common
stock generally rank inferior to the rights of holders of preferred stock. You
could lose some of all of your investment in the trust. Common stocks are
especially susceptible to general stock market movements and to volatile
increases and decreases in value as market confidence in and perceptions of the
issuers change. These perceptions are based on unpredictable factors including
expectations regarding government, economic, monetary and fiscal policies,
inflation and interest rates, economic expansion or contraction, and global or
regional political, economic or banking crises.

Holders of common stock incur more risk than the holders of preferred
stocks and debt obligations because common stockholders, as owners of the
entity, have generally inferior rights to receive payments from the issuer in
comparison with the rights of creditors of, or holders of debt obligations or
preferred stock issued by the issuer. Holders of common stock of the type held
by a trust have a right to receive dividends only when and if, and in the
amounts, declared by the issuer's board of directors and to participate in
amounts available

for distribution by the issuer only after all other claims on the issuer have
been paid or provided for. By contrast, holders of preferred stock have the
right to receive dividends at a fixed rate when and as declared by the issuer's
board of directors, normally on a cumulative basis, but do not participate in
other amounts available for distribution by the issuing corporation. Cumulative
preferred stock dividends must be paid before common stock dividends and any
cumulative preferred stock dividend omitted is added to future dividends
payable to the holders of cumulative preferred stock. Preferred stocks are also
entitled to rights on liquidation which are senior to those of common stocks.
Moreover, common stocks do not represent an obligation of the issuer and
therefore do not offer any assurance of income or provide the degree of
protection of capital debt securities. Indeed, the issuance of debt securities
or even preferred stock will create prior claims for payment of principal,
interest, liquidation preferences and dividends which could adversely affect
the ability and inclination of the issuer to declare or pay dividends on its
common stock or the rights of holders of common stock with respect to assets of
the issuer upon liquidation or bankruptcy. Further, unlike debt securities
which typically have a stated principal amount payable at maturity (whose
value, however, will be subject to market fluctuations prior thereto), common
stocks have neither a fixed principal amount nor a maturity and have values
which are subject to market fluctuations for as long as the stocks remain
outstanding. The value of the securities in a portfolio thus may be expected to
fluctuate over the entire life of a trust to values higher or lower than those
prevailing at the time of purchase.

The sponsor's buying and selling of the securities, especially during the
initial offering of units of the trust or to satisfy redemptions of units may
impact upon the value of the underlying securities and the units. The
publication of the list of the securities selected for the trust may also cause
increased buying activity in certain of the stocks comprising the portfolio.
After such announcement, investment advisory and brokerage clients of the
sponsor and its affiliates may purchase individual securities appearing on the
list during the course of the initial offering period or may purchase warrants
issued by the sponsor or its affiliates which are based on the performance of
the securities on the list. The sponsor or its affiliates may also purchase
securities as a hedge against its risk on the warrants (although generally the
sponsor and its affiliates will not purchase securities for their own account
until after the trust portfolio has been acquired). Such buying activity in the
stock of these companies or issuance of the warrants prior to the purchase of
the securities by the trust may cause the trust to purchase stocks at a higher
price than those buyers who effect purchases by the trust.

Fixed Portfolio. Investors should be aware that the trust is not "managed"
and as a result, the adverse financial condition of a company will not result
in the elimination of its securities from the portfolio of the trust except
under extraordinary circumstances. Investors should note in particular that the
securities were selected on the basis of the criteria set forth in the
prospectus and that the trust may continue to purchase or hold securities
originally selected through this process even though the evaluation of the
attractiveness of the securities may have changed. A number of the securities
in the trust may also be owned by other clients of the sponsor. However,
because these clients may have differing investment objectives, the sponsor may
sell certain securities from those accounts in instances where a sale by the
trust would be impermissible, such as to maximize return by taking advantage of
market fluctuations. In the event a public tender offer is made for a security
or a merger or acquisition is announced affecting a security, the sponsor may
instruct the trustee to tender or sell the security on the open market when, in
its opinion, it is in the best interest of the unitholders of the unit to do
so. Although the portfolio is regularly reviewed and evaluated and the sponsor
may instruct the trustee to sell securities under certain limited
circumstances, securities will not be sold by the trust to take advantage of
market fluctuations or changes in anticipated rates of appreciation. As a
result, the amount

realized upon the sale of the securities may not be the highest price attained
by an individual security during the life of the trust. The prices of single
shares of each of the securities in the trust vary widely, and the effect of a
dollar of fluctuation, either higher or lower, in stock prices will be much
greater as a percentage of the lower-price stocks' purchase price than as a
percentage of the higher-price stocks' purchase price.

Liquidity. Whether or not the securities are listed on a national
securities exchange, the principal trading market for the securities may be in
the over-the-counter market. As a result, the existence of a liquid trading
market for the securities may depend on whether dealers will make a market in
the securities. There can be no assurance that a market will be made for any of
the securities, that any market for the securities will be maintained or of the
liquidity of the securities in any markets made. In addition, a trust is
restricted under the Investment Company Act of 1940 from selling securities to
the sponsor. The price at which the securities may be sold to meet redemptions
and the value of a trust will be adversely affected if trading markets for the
securities are limited or absent.

Additional Deposits. The trust agreement authorizes the sponsor to
increase the size of a trust and the number of units thereof by the deposit of
additional securities, or cash (including a letter of credit) with instructions
to purchase additional securities, in such trust and the issuance of a
corresponding number of additional units. If the sponsor deposits cash,
existing and new investors may experience a dilution of their investments and a
reduction in their anticipated income because of fluctuations in the prices of
the securities between the time of the cash deposit and the purchase of the
securities and because a trust will pay the associated brokerage fees. To
minimize this effect, the trusts will attempt to purchase the securities as
close to the evaluation time or as close to the evaluation prices as possible.

Some of the securities may have limited trading volume. The trustee, with
directions from the sponsor, will endeavor to purchase securities with
deposited cash as soon as practicable reserving the right to purchase those
securities over the 20 business days following each deposit in an effort to
reduce the effect of these purchases on the market price of those stocks. This
could, however, result in the trusts' failure to participate in any
appreciation of those stocks before the cash is invested. If any cash remains
at the end of this period (and such date is within the 90-day period following
the inception date) and cannot be invested in one or more stocks, at what the
sponsor considers reasonable prices, it intends to use that cash to purchase
each of the other securities in the original proportionate relationship among
those securities. Similarly, at termination of the trust, the sponsor reserves
the right to sell securities over a period of up to nine business days to
lessen the impact of its sales on the market price of the securities. The
proceeds received by unitholders following termination of the trust will
reflect the actual sales proceeds received on the securities, which will likely
differ from the closing sale price on the termination date.

Litigation and Legislation. At any time litigation may be initiated on a
variety of grounds, or legislation may be enacted with respect to the
securities in a trust or the issuers of the securities. There can be no
assurance that future litigation or legislation will not have a material
adverse effect on the trust or will not impair the ability of issuers to
achieve their business goals.

Financial Sector Risks. If set forth in Part A of the prospectus, certain
of the issuers of securities in a trust may be involved in the financial
sector. An investment in units of a trust containing securities of such

issuers should be made with an understanding of the problems and risks inherent
in the financial sector in general.

Banks, thrifts and their holding companies are especially subject to the
adverse effects of economic recession; volatile interest rates; portfolio
concentrations in geographic markets, in commercial and residential real estate
loans or any particular segment or industry; and competition from new entrants
in their fields of business. Banks and thrifts are highly dependent on net
interest margin. Banks and thrifts traditionally receive a significant portion
of their revenues from consumer mortgage fee income as a result of activity in
mortgage and refinance markets. As home purchasing and refinancing activity has
subsided, this revenue has diminished. Economic conditions in the real estate
markets have deteriorated, leading to asset write-offs and decreased liquidity
in the credit markets, which can have a substantial negative effect upon banks
and thrifts because they generally have a portion of their assets invested in
loans secured by real estate. Difficulties in the mortgage and broader credit
markets have resulted in decreases in the availability of funds. Financial
performance of many banks and thrifts, especially in securities collateralized
by mortgage loans has deteriorated.

In response to recent market and economic conditions, the United States
Government, particularly the U.S. Department of the Treasury ("U.S. Treasury"),
the Federal Reserve Board ("FRB"), and the Federal Deposit Insurance
Corporation ("FDIC") have taken a variety of extraordinary measures including
capital injections, guarantees of bank liabilities and the acquisition of
illiquid assets from banks designed to provide fiscal stimulus, restore
confidence in the financial markets and to strengthen financial institutions.
The Emergency Economic Stabilization Act of 2008 ("EESA") gave the U.S.
Treasury $700 billion to purchase bad mortgage-related securities that caused
much of the difficulties experienced by financial institutions and the credit
markets in general. Additionally, the American Recovery and Reinvestment Act of
2009 ("ARRA") was signed into law in February, 2009. The EESA and ARRA, along
with the U.S. Treasury's Capital Purchase Program (which provides for direct
purchases by the U.S. Treasury of equity from financial institutions), contain
provisions limiting the way banks and their holding companies are able pay
dividends, purchase their own common stock, and compensate officers.
Furthermore, participants have been subject to forward looking stress tests to
determine if they have sufficient capital to withstand certain economic
scenarios, including situations more severe than the current recession. As a
result of these stress tests, some financial institutions were required to
increase their level of capital through a combination of asset sales,
additional equity offerings and the conversion of preferred shares into common
stock. The long-term effects of the EESA, ARRA, and the stress tests are not
yet known and cannot be predicted. This uncertainty may cause increased costs
and risks for the firms associated with the respective programs.

Banks, thrifts and their holding companies are subject to extensive
federal regulation and, when such institutions are state-chartered, to state
regulation as well. Such regulations impose strict capital requirements and
limitations on the nature and extent of business activities that banks and
thrifts may pursue. Furthermore, bank regulators have a wide range of
discretion in connection with their supervisory and enforcement authority and
may substantially restrict the permissible activities of a particular
institution if deemed to pose significant risks to the soundness of such
institution or the safety of the federal deposit insurance fund. Regulatory
actions, such as increases in the minimum capital requirements applicable to
banks and thrifts and increases in deposit insurance premiums required to be
paid by banks and thrifts to the FDIC, can negatively impact earnings and the
ability of a company to pay

dividends. Neither federal insurance of deposits nor governmental regulations,
however, insures the solvency or profitability of banks or their holding
companies, or insures against any risk of investment in the securities issued
by such institutions.

In light of the current credit market difficulties, the U.S. Government is
considering changes to the laws and regulatory structure. New legislation and
regulatory changes could cause business disruptions, result in significant loss
of revenue, limit financial firms' ability to pursue business opportunities,
impact the value of business assets and impose additional costs that may
adversely affect business. There can be no assurance as to the actual impact
these laws and their implementing regulations, or any other governmental
program, will have on the financial markets. Currently the FRB, FDIC,
Securities and Exchange Commission, Office of Comptroller of the Currency (a
bureau of the U.S. Treasury which regulates national banks), and the U.S.
Commodities Futures Trading Commission (which oversees commodity futures and
option markets) all play a role in the supervision of the financial markets.
Recently passed legislation calls for swift government intervention which
includes the creation of new federal agencies that will have a direct impact on
the financial, banking and insurance industries. This new legislation includes
the creation of a Financial Oversight Council to advise the FRB on the
identification of firms who failure could pose a threat to financial stability
due to their combination of size, leverage, and interconnectedness.
Additionally, these financial firms would be subject to increased scrutiny
concerning their capital, liquidity, and risk management standards.

The statutory requirements applicable to and regulatory supervision of
banks, thrifts and their holding companies have increased significantly and
have undergone substantial change in the recent past. To a great extent, these
changes are embodied in the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, the Federal Deposit Insurance Corporation Improvement
Act of 1991, the Resolution Trust Corporation Refinancing, Restructuring, and
Improvement Act of 1991, the Riegle-Neal Interstate Banking and Branching
Efficiency Act of 1994 and the regulations promulgated under these laws. In
1999, the Gramm--Leach--Bliley Act repealed most of the barriers set up by the
1933 Glass--Steagall Act which separated the banking, insurance and securities
industries. Banks and thrifts now face significant competition from other
financial institutions such as mutual funds, credit unions, mortgage banking
companies and insurance companies. Banks, insurance companies and securities
firms can merge to form one-stop financial conglomerates marketing a wide range
of financial service products to investors. This legislation has resulted in
increased merger activity and heightened competition among existing and new
participants in the field. Efforts to expand the ability of federal thrifts to
branch on an interstate basis have been initially successful through
promulgation of regulations and legislation to liberalize interstate banking
has been signed into law. Under the legislation, banks are able to purchase or
establish subsidiary banks in any state. Since mid-1997, banks have been
allowed to turn existing banks into branches, thus leading to continued
consolidation.

The Securities and Exchange Commission and the Financial Accounting
Standards Board ("FASB") require the expanded use of market value accounting by
banks and have imposed rules requiring mark-to-market accounting for investment
securities held in trading accounts or available for sale. Adoption of
additional such rules may result in increased volatility in the reported health
of the industry, and mandated regulatory intervention to correct such problems.
Accounting Standards Codification 820, "Fair Value Measurements and
Disclosures" changed the requirements of mark-to-market accounting and
determining fair value when the volume and level of activity for the asset or
liability has significantly decreased. These changes and other

potential changes in financial accounting rules and valuation techniques may
have a significant impact on the banking and financial services industries in
terms of accurately pricing assets or liabilities. Additional legislative and
regulatory changes may be forthcoming. For example, the bank regulatory
authorities have proposed substantial changes to the Community Reinvestment Act
and fair lending laws, rules and regulations, and there can be no certainty as
to the effect, if any, that such changes would have on the securities in a
trust's portfolio. In addition, from time to time the deposit insurance system
is reviewed by Congress and federal regulators, and proposed reforms of that
system could, among other things, further restrict the ways in which deposited
moneys can be used by banks or change the dollar amount or number of deposits
insured for any depositor. On October 3, 2008, EESA increased the maximum
amount of federal deposit insurance coverage payable as to any certificate of
deposit from $100,000 to $250,000 per depositor until December 31, 2013. The
impact of this reform is unknown and could reduce profitability as investment
opportunities available to bank institutions become more limited and as
consumers look for savings vehicles other than bank deposits. The sponsor makes
no prediction as to what, if any, manner of bank and thrift regulatory actions
might ultimately be adopted or what ultimate effect such actions might have on
a trust's portfolio.

The Federal Bank Holding Company Act of 1956 ("BHC Act") generally
prohibits a bank holding company from (1) acquiring, directly or indirectly,
more than 5% of the outstanding shares of any class of voting securities of a
bank or bank holding company, (2) acquiring control of a bank or another bank
holding company, (3) acquiring all or substantially all the assets of a bank,
or (4) merging or consolidating with another bank holding company, without
first obtaining FRB approval. In considering an application with respect to any
such transaction, the FRB is required to consider a variety of factors,
including the potential anti-competitive effects of the transaction, the
financial condition and future prospects of the combining and resulting
institutions, the managerial resources of the resulting institution, the
convenience and needs of the communities the combined organization would serve,
the record of performance of each combining organization under the Community
Reinvestment Act and the Equal Credit Opportunity Act, and the prospective
availability to the FRB of information appropriate to determine ongoing
regulatory compliance with applicable banking laws. In addition, the federal
Change In Bank Control Act and various state laws impose limitations on the
ability of one or more individuals or other entities to acquire control of
banks or bank holding companies.

The FRB has issued a policy statement on the payment of cash dividends by
bank holding companies in which the FRB expressed its view that a bank holding
company experiencing earnings weaknesses should not pay cash dividends which
exceed its net income or which could only be funded in ways that would weaken
its financial health, such as by borrowing. The FRB also may impose limitations
on the payment of dividends as a condition to its approval of certain
applications, including applications for approval of mergers and acquisitions.
The sponsor makes no prediction as to the effect, if any, such laws will have
on the securities in a trust or whether such approvals, if necessary, will be
obtained.

Companies engaged in investment banking/brokerage and investment
management include brokerage firms, broker/ dealers, investment banks, finance
companies and mutual fund companies. Earnings and share prices of companies in
this industry are quite volatile, and often exceed the volatility levels of the
market as a whole. Negative economic events in the credit markets have led some
firms to declare bankruptcy, forced short-notice sales to competing firms, or
required government intervention by the FDIC or through an infusions of
Troubled Asset Relief Program funds. Consolidation in the industry and the
volatility in the stock market have negatively impacted investors.

Additionally, government intervention has required many financial
institutions to become bank holding companies under the BHC Act. Under the
system of functional regulation established under the BHC Act, the FRB
supervises bank holding companies as an umbrella regulator. The BHC Act and
regulations generally restrict bank holding companies from engaging in business
activities other than the business of banking and certain closely related
activities. The FRB and FDIC have also issued substantial risk-based and
leverage capital guidelines applicable to U.S. banking organizations. The
guidelines define a three-tier framework, requiring depository institutions to
maintain certain leverage ratios depending on the type of assets held. If any
depository institution controlled by a financial or bank holding company ceases
to meet capital or management standards, the FRB may impose corrective capital
and/ or managerial requirements on the company and place limitations on its
ability to conduct broader financial activities. Furthermore, proposed
legislation will allow the Treasury and the FDIC to create a resolution regime
to "take over" bank and financial holding companies. The "taking over" would be
based on whether the firm is in default or in danger of defaulting and whether
such a default would have a serious adverse affect on the financial system or
the economy. This mechanism would only be used by the government in exceptional
circumstances to mitigate these effects. This type of intervention has unknown
risks and costs associated with it, which may cause unforeseeable harm in the
industry.

Companies involved in the insurance industry are engaged in underwriting,
reinsuring, selling, distributing or placing of property and casualty, life or
health insurance. Other growth areas within the insurance industry include
brokerage, reciprocals, claims processors and multi-line insurance companies.
Interest rate levels, general economic conditions and price and marketing
competition affect insurance company profits. Property and casualty insurance
profits may also be affected by weather catastrophes and other disasters. Life
and health insurance profits may be affected by mortality and morbidity rates.
Individual companies may be exposed to material risks including reserve
inadequacy and the inability to collect from reinsurance carriers. Insurance
companies are subject to extensive governmental regulation, including the
imposition of maximum rate levels, which may not be adequate for some lines of
business. Proposed or potential tax law changes may also adversely affect
insurance companies' policy sales, tax obligations, and profitability. In
addition to the foregoing, profit margins of these companies continue to shrink
due to the commoditization of traditional businesses, new competitors, capital
expenditures on new technology and the pressures to compete globally.

In addition to the normal risks of business, companies involved in the
insurance industry are subject to significant risk factors, including those
applicable to regulated insurance companies, such as: (i) the inherent
uncertainty in the process of establishing property-liability loss reserves,
particularly reserves for the cost of environmental, asbestos and mass tort
claims, and the fact that ultimate losses could materially exceed established
loss reserves which could have a material adverse effect on results of
operations and financial condition; (ii) the fact that insurance companies have
experienced, and can be expected in the future to experience, catastrophe
losses which could have a material adverse impact on their financial condition,
results of operations and cash flow; (iii) the inherent uncertainty in the
process of establishing property-liability loss reserves due to changes in loss
payment patterns caused by new claims settlement practices; (iv) the need for
insurance companies and their subsidiaries to maintain appropriate levels of
statutory capital and surplus, particularly in light of continuing scrutiny by
rating organizations and state insurance regulatory authorities, and in order
to maintain acceptable financial strength or claims-paying ability rating; (v)
the extensive regulation and supervision to which insurance companies'
subsidiaries are subject, various regulatory

initiatives that may affect insurance companies, and regulatory and other legal
actions; (vi) the adverse impact that increases in interest rates could have on
the value of an insurance company's investment portfolio and on the
attractiveness of certain of its products; (vii) the need to adjust the
effective duration of the assets and liabilities of life insurance operations
in order to meet the anticipated cash flow requirements of its policyholder
obligations; and (viii) the uncertainty involved in estimating the availability
of reinsurance and the collectibility of reinsurance recoverables. This
enhanced oversight into the insurance industry may pose unknown risks to the
sector as a whole.

The state insurance regulatory framework has, during recent years, come
under increased federal scrutiny, and certain state legislatures have
considered or enacted laws that alter and, in many cases, increase state
authority to regulate insurance companies and insurance holding company
systems. Further, the National Association of Insurance Commissioners ("NAIC")
and state insurance regulators are re-examining existing laws and regulations,
specifically focusing on insurance companies, interpretations of existing laws
and the development of new laws. In addition, Congress and certain federal
agencies have investigated the condition of the insurance industry in the
United States to determine whether to promulgate additional federal regulation.
The sponsor is unable to predict whether any state or federal legislation will
be enacted to change the nature or scope of regulation of the insurance
industry, or what effect, if any, such legislation would have on the industry.

All insurance companies are subject to state laws and regulations that
require diversification of their investment portfolios and limit the amount of
investments in certain investment categories. Failure to comply with these laws
and regulations would cause non-conforming investments to be treated as
non-admitted assets for purposes of measuring statutory surplus and, in some
instances, would require divestiture.

Environmental pollution clean-up is the subject of both federal and state
regulation. By some estimates, there are thousands of potential waste sites
subject to clean up. The insurance industry is involved in extensive litigation
regarding coverage issues. The Comprehensive Environmental Response
Compensation and Liability Act of 1980 ("Superfund") and comparable state
statutes ("mini-Superfund") govern the clean-up and restoration by "Potentially
Responsible Parties" ("PRPs"). Superfund and the mini-Superfunds
("Environmental Clean-up Laws" or "ECLs") establish a mechanism to pay for
clean-up of waste sites if PRPs fail to do so, and to assign liability to PRPs.
The extent of liability to be allocated to a PRP is dependent on a variety of
factors. The extent of clean-up necessary and the assignment of liability has
not been fully established. The insurance industry is disputing many such
claims. Key coverage issues include whether Superfund response costs are
considered damages under the policies, when and how coverage is triggered,
applicability of pollution exclusions, the potential for joint and several
liability and definition of an occurrence. Similar coverage issues exist for
clean up and waste sites not covered under Superfund. To date, courts have been
inconsistent in their rulings on these issues. An insurer's exposure to
liability with regard to its insureds which have been, or may be, named as PRPs
is uncertain. Superfund reform proposals have been introduced in Congress, but
none have been enacted. There can be no assurance that any Superfund reform
legislation will be enacted or that any such legislation will provide for a
fair, effective and cost-efficient system for settlement of Superfund related
claims.

While current federal income tax law permits the tax-deferred accumulation
of earnings on the premiums paid by an annuity owner and holders of certain
savings-oriented life insurance products, no assurance can be given that future
tax law will continue to allow such tax deferrals. If such deferrals were not
allowed, consumer demand for the affected products would be substantially
reduced. In addition, proposals to lower the federal income tax rates through a
form of flat tax or otherwise could have, if enacted, a negative impact on the
demand for such products.

Major determinants of future earnings of companies in the financial
services sector are the direction of the stock market, investor confidence,
equity transaction volume, the level and direction of long-term and short-term
interest rates, and the outlook for emerging markets. Negative trends in any of
these earnings determinants could have a serious adverse effect on the
financial stability, as well as the stock prices, of these companies.
Furthermore, there can be no assurance that the issuers of the securities
included in the trust will be able to respond in a timely manner to compete in
the rapidly developing marketplace. In addition to the foregoing, profit
margins of these companies continue to shrink due to the commoditization of
traditional businesses, new competitors, capital expenditures on new technology
and the pressures to compete globally.

Foreign Securities Risk. If set forth in Part A of the prospectus, a
trust, or issuers of securities held by a trust, may invest in foreign issuers,
and therefore, an investment in such a trust involves some investment risks
that are different in some respects from an investment in a trust that invests
entirely in securities of domestic issuers. Those investment risks include
future political and governmental restrictions which might adversely affect the
payment or receipt of payment of dividends on the relevant securities, currency
exchange rate fluctuations, exchange control policies, and the limited
liquidity and small market capitalization of such foreign countries' securities
markets. In addition, for foreign issuers that are not subject to the reporting
requirements of the Securities Exchange Act of 1934, there may be less publicly
available information than is available from a domestic issuer. Also, foreign
issuers are not necessarily subject to uniform accounting, auditing and
financial reporting standards, practices and requirements comparable to those
applicable to domestic issuers. However, due to the nature of the issuers of
the securities included in the trust, the sponsor believes that adequate
information will be available to allow the sponsor to provide portfolio
surveillance.

Certain of the securities in the trust may be in ADR or GDR form. ADRs,
American Depositary Receipts and GDRs, Global Depositary Receipts, represent
common stock deposited with a custodian in a depositary. American Depositary
Receipts and Global Depositary Receipts (collectively, the "Depositary
Receipts") are issued by a bank or trust company to evidence ownership of
underlying securities issued by a foreign corporation. These instruments may
not necessarily be denominated in the same currency as the securities into
which they may be converted. For purposes of the discussion herein, the terms
ADR and GDR generally include American Depositary Shares and Global Depositary
Shares, respectively.

Depositary Receipts may be sponsored or unsponsored. In an unsponsored
facility, the depositary initiates and arranges the facility at the request of
market makers and acts as agent for the Depositary Receipts holder, while the
company itself is not involved in the transaction. In a sponsored facility, the
issuing company initiates the facility and agrees to pay certain administrative
and shareholder-related expenses. Sponsored facilities use a single depositary
and entail a contractual relationship between the issuer, the shareholder and
the depositary; unsponsored facilities involve several depositaries with no
contractual relationship to the company. The

depositary bank that issues Depositary Receipts generally charges a fee, based
on the price of the Depositary Receipts, upon issuance and cancellation of the
Depositary Receipts. This fee would be in addition to the brokerage commissions
paid upon the acquisition or surrender of the security. In addition, the
depositary bank incurs expenses in connection with the conversion of dividends
or other cash distributions paid in local currency into U.S. dollars and such
expenses are deducted from the amount of the dividend or distribution paid to
holders, resulting in a lower payout per underlying shares represented by the
Depositary Receipts than would be the case if the underlying share were held
directly. Certain tax considerations, including tax rate differentials and
withholding requirements, arising from the application of the tax laws of one
nation to nationals of another and from certain practices in the Depositary
Receipts market may also exist with respect to certain Depositary Receipts. In
varying degrees, any or all of these factors may affect the value of the
Depositary Receipts compared with the value of the underlying shares in the
local market. In addition, the rights of holders of Depositary Receipts may be
different than those of holders of the underlying shares, and the market for
Depositary Receipts may be less liquid than that for the underlying shares.
Depositary Receipts are registered securities pursuant to the Securities Act of
1933 and may be subject to the reporting requirements of the Securities
Exchange Act of 1934.

For the securities that are Depositary Receipts, currency fluctuations
will affect the United States dollar equivalent of the local currency price of
the underlying domestic share and, as a result, are likely to affect the value
of the Depositary Receipts and consequently the value of the securities. The
foreign issuers of securities that are Depositary Receipts may pay dividends in
foreign currencies which must be converted into dollars. Most foreign
currencies have fluctuated widely in value against the United States dollar for
many reasons, including supply and demand of the respective currency, the
soundness of the world economy and the strength of the respective economy as
compared to the economies of the United States and other countries. Therefore,
for any securities of issuers (whether or not they are in Depositary Receipt
form) whose earnings are stated in foreign currencies, or which pay dividends
in foreign currencies or which are traded in foreign currencies, there is a
risk that their United States dollar value will vary with fluctuations in the
United States dollar foreign exchange rates for the relevant currencies.

On January 1, 1999, Austria, Belgium, Finland, France, Germany, Ireland,
Italy, Luxembourg, the Netherlands, Portugal and Spain (eleven of the fifteen
member states of the European Union ("EU"), as of such date) established fixed
conversion rates between their existing sovereign currencies and the Euro. On
such date the Euro became the official currency of these eleven countries. The
participating countries do not control their own monetary policies by directing
independent interest rates for their currencies. Greece, Slovenia, Cyprus and
Malta have also adopted the Euro as their official currency. In these member
states, the authority to direct monetary policy, including money supply and
official interest rates for the Euro, is exercised by the European Central
Bank. The conversion of the national currencies of the participating countries
to the Euro could negatively impact the market rate of the exchange between
such currencies (or the Euro) and the U.S. dollar. As of January 1, 2010, there
were 27 member states in the EU.

In addition, European corporations, and other entities with significant
markets or operations in Europe (whether or not in the participating
countries), face strategic challenges as these entities adapt to a single
transnational currency. The Euro conversion may have a material impact on
revenues, expenses or income from operations; increase competition due to the
increased price transparency of EU markets; effect issuers'

currency exchange rate risk and derivatives exposure; disrupt current
contracts; cause issuers to increase spending on information technology updates
required for the conversion; and result in potential adverse tax consequences.
The sponsor is unable to predict what impact, if any, the Euro conversion will
have on any of the issuers of securities contained in a trust.

Preferred Stock Risks. If set forth in Part A of the prospectus, a trust,
or issuers of securities held by a trust, may invest in preferred stock. If
this is the case, an investment in units should be made with an understanding
of the risks which an investment in preferred stocks entails, including the
risk that the financial condition of the issuers of the securities or the
general condition of the preferred stock market may worsen, and the value of
the preferred stocks and therefore the value of the units may decline.
Preferred stocks may be susceptible to general stock market movements and to
volatile increases and decreases of value as market confidence in and
perceptions of the issuers change. These perceptions are based on unpredictable
factors, including expectations regarding government, economic, monetary and
fiscal policies, inflation and interest rates, economic expansion or
contraction, market liquidity, and global or regional political, economic or
banking crises. Preferred stocks are also vulnerable to congressional
reductions in the dividends-received deduction which would adversely affect the
after-tax return to the investors who can take advantage of the deduction. Such
a reduction might adversely affect the value of preferred stocks in general.
Holders of preferred stocks, as owners of the entity, have rights to receive
payments from the issuers of those preferred stocks that are generally
subordinate to those of creditors of, or holders of debt obligations or, in
some cases, other senior preferred stocks of, such issuers. Preferred stocks do
not represent an obligation of the issuer and, therefore, do not offer any
assurance of income or provide the same degree of protection of capital as do
debt securities. The issuance of additional debt securities or senior preferred
stocks will create prior claims for payment of principal and interest and
senior dividends which could adversely affect the ability and inclination of
the issuer to declare or pay dividends on its preferred stock or the rights of
holders of preferred stock with respect to assets of the issuer upon
liquidation or bankruptcy. The value of preferred stocks is subject to market
fluctuations for as long as the preferred stocks remain outstanding, and thus
the value of the securities may be expected to fluctuate over the life of the
trust to values higher or lower than those prevailing on the initial date of
deposit.

Trust Preferred Securities Risks. If set forth in Part A of the
prospectus, a trust, or issuers of securities held by a trust, may invest in
trust preferred securities. Holders of trust preferred securities incur risks
in addition to or slightly different than the typical risks of holding
preferred stocks. Trust preferred securities are limited-life preferred
securities that are typically issued by corporations, generally in the form of
interest-bearing notes or preferred securities issued by corporations, or by an
affiliated business trust of a corporation, generally in the form of beneficial
interests in subordinated debentures issued by the corporation, or similarly
structured securities. The maturity and dividend rate of the trust preferred
securities are structured to match the maturity and coupon interest rate of the
interest-bearing notes, preferred securities or subordinated debentures. Trust
preferred securities usually mature on the stated maturity date of the
interest-bearing notes, preferred securities or subordinated debentures and may
be redeemed or liquidated prior to the stated maturity date of such instruments
for any reason on or after their stated call date or upon the occurrence of
certain circumstances at any time. Trust preferred securities generally have a
yield advantage over traditional preferred stocks, but unlike preferred stocks,
distributions on the trust preferred securities are generally treated as
interest rather than dividends for federal income tax purposes. Unlike most
preferred stocks, distributions received from trust

preferred securities are generally not eligible for the dividends-received
deduction. Certain of the risks unique to trust preferred securities include:
(i) distributions on trust preferred securities will be made only if interest
payments on the interest-bearing notes, preferred securities or subordinated
debentures are made; (ii) a corporation issuing the interest-bearing notes,
preferred securities or subordinated debentures may defer interest payments on
these instruments for up to 20 consecutive quarters and if such election is
made, distributions will not be made on the trust preferred securities during
the deferral period; (iii) certain tax or regulatory events may trigger the
redemption of the interest-bearing notes, preferred securities or subordinated
debentures by the issuing corporation and result in prepayment of the trust
preferred securities prior to their stated maturity date; (iv) future
legislation may be proposed or enacted that may prohibit the corporation from
deducting its interest payments on the interest-bearing notes, preferred
securities or subordinated debentures for tax purposes, making redemption of
these instruments likely; (v) a corporation may redeem the interest-bearing
notes, preferred securities or subordinated debentures in whole at any time or
in part from time to time on or after a stated call date; (vi) trust preferred
securities holders have very limited voting rights; and (vii) payment of
interest on the interest-bearing notes, preferred securities or subordinated
debentures, and therefore distributions on the trust preferred securities, is
dependent on the financial condition of the issuing corporation.

Convertible Securities Risks. If set forth in Part A of the prospectus, a
trust, or issuers of securities held by a trust, may invest in convertible
securities.

Convertible securities generally offer lower interest or dividend yields
than non-convertible fixed-income securities of similar credit quality because
of the potential for capital appreciation. The market values of convertible
securities tend to decline as interest rates increase and, conversely, to
increase as interest rates decline. However, a convertible security's market
value also tends to reflect the market price of the common stock of the issuing
company, particularly when the stock price is greater than the convertible
security's conversion price. The conversion price is defined as the
predetermined price or exchange ratio at which the convertible security can be
converted or exchanged for the underlying common stock. As the market price of
the underlying common stock declines below the conversion price, the price of
the convertible security tends to be increasingly influenced more by the yield
of the convertible security than by the market price of the underlying common
stock. Thus, it may not decline in price to the same extent as the underlying
common stock, and convertible securities generally have less potential for gain
or loss than common stocks. However, mandatory convertible securities (as
discussed below) generally do not limit the potential for loss to the same
extent as securities convertible at the option of the holder. In the event of a
liquidation of the issuing company, holders of convertible securities would be
paid before that company's common stockholders. Consequently, an issuer's
convertible securities generally entail less risk than its common stock.
However, convertible securities fall below debt obligations of the same issuer
in order of preference or priority in the event of a liquidation and are
typically unrated or rated lower than such debt obligations. In addition,
contingent payment, convertible securities allow the issuer to claim deductions
based on its nonconvertible cost of debt, which generally will result in
deduction in excess of the actual cash payments made on the securities (and
accordingly, holders will recognize income in amounts in excess of the cash
payments received).

Mandatory convertible securities are distinguished as a subset of
convertible securities because the conversion is not optional and the
conversion price at maturity is based solely upon the market price of the
underlying common stock, which may be significantly less than par or the price
(above or below par) paid. For

these reasons, the risks associated with investing in mandatory convertible
securities most closely resemble the risks inherent in common stocks. Mandatory
convertible securities customarily pay a higher coupon yield to compensate for
the potential risk of additional price volatility and loss upon conversion.
Because the market price of a mandatory convertible security increasingly
corresponds to the market price of its underlying common stock as the
convertible security approaches its conversion date, there can be no assurance
that the higher coupon will compensate for the potential loss.

Senior Loan Risks. If set forth in Part A of the prospectus, a trust, or
issuers of securities held by a trust, may invest in senior loans.

Senior loans in which a Closed-End Fund may invest:

o generally are of below investment-grade credit quality;

o may be unrated at the time of investment;

o generally are not registered with the SEC or any state securities
commission; and

o generally are not listed on any securities exchange.

The amount of public information available on senior loans generally will
be less extensive than that available for other types of assets.

No reliable, active trading market currently exists for many senior loans,
although a secondary market for certain senior loans has developed over the
past several years. Senior loans are thus relatively illiquid. Liquidity
relates to the ability of a Closed-End Fund to sell an investment in a timely
manner at a price approximately equal to its value on the Closed-End Fund's
books. The illiquidity of senior loans may impair a Closed-End Fund's ability
to realized the full value of its assets in the event of a voluntary or
involuntary liquidation of such assets. Because of the lack of an active
trading market, illiquid securities are also difficult to value and prices
provided by external pricing services may not reflect the true value of the
securities. However, many senior loans are of a large principal amount and are
held by a large number of financial institutions. To the extent that a
secondary market does exist for certain senior loans, the market may be subject
to irregular trading activity, wide bid/ask spreads and extended trade
settlement periods. The market for senior loans could be disrupted in the event
of an economic downturn or a substantial increase or decrease in interest
rates. This could result in increased volatility in the market and in the
trusts' net asset value.

If legislation or state or federal regulators impose additional
requirements or restrictions on the ability of financial institutions to make
loans that are considered highly leveraged transactions, the availability of
senior loans for investment by the Closed-End Funds may be adversely affected.
In addition, such requirements or restrictions could reduce or eliminate
sources of financing for certain borrowers. This would increase the risk of
default. If legislation or federal or state regulators require financial
institutions to dispose of senior loans that are considered highly leveraged
transactions or subject such senior loans to increased regulatory scrutiny,
financial institutions may determine to sell such senior loans. Such sales
could result in depressed prices. If a

Closed-End Fund attempts to sell a senior loan at a time when a financial
institution is engaging in such a sale, the price a Closed-End Fund could get
for the senior loan may be adversely affected.

Some senior loans are subject to the risk that a court, pursuant to
fraudulent conveyance or other similar laws, could subordinate the senior loans
to presently existing or future indebtedness of the borrower or take other
action detrimental to lenders. Such court action could under certain
circumstances include invalidation of senior loans. Any lender, which could
include a Closed-End Fund, is subject to the risk that a court could find the
lender liable for damages in a claim by a borrower arising under the common
laws of tort or contracts or anti-fraud provisions of certain securities laws
for actions taken or omitted to be taken by the lenders under the relevant
terms of a loan agreement or in connection with actions with respect to the
collateral underlying the senior loan.

Small-Capitalization and Mid-Capitalization Stocks Risk. If set forth in
Part A of the prospectus, a trust may invest in small-capitalization or
mid-capitalization stocks. Investing in small-capitalization stocks or
mid-capitalization stocks may involve greater risk than investing in
large-capitalization stocks, since they can be subject to more abrupt or
erratic price movements. Many small market capitalization companies ("Small-Cap
Companies") or middle market capitalization companies ("Mid-Cap Companies")
will have had their securities publicly traded, if at all, for only a short
period of time and will not have had the opportunity to establish a reliable
trading pattern through economic cycles. The price volatility of Small-Cap
Companies and Mid-Cap Companies is relatively higher than larger, older and
more mature companies. The greater price volatility of Small-Cap Companies and
Mid-Cap Companies may result from the fact that there may be less market
liquidity, less information publicly available or fewer investors who monitor
the activities of these companies. In addition, the market prices of these
securities may exhibit more sensitivity to changes in industry or general
economic conditions. Some Small-Cap Companies or Mid-Cap Companies will not
have been in existence long enough to experience economic cycles or to
demonstrate whether they are sufficiently well managed to survive downturns or
inflationary periods. Further, a variety of factors may affect the success of a
company's business beyond the ability of its management to prepare or
compensate for them, including domestic and international political
developments, government trade and fiscal policies, patterns of trade and war
or other military conflict which may affect industries or markets or the
economy generally.

Administration of the Trust

Distributions to Unitholders. Income received by a trust is credited by
the trustee to the Income Account of the trust. Other receipts are credited to
the Capital Account of a trust. Income received by a trust will be distributed
on or shortly after the distribution dates each year shown in the prospectus on
a pro rata basis to unitholders of record as of the preceding record date shown
in the prospectus. However, if set forth in Part A of the prospectus that the
trust will prorate distributions on an annual basis ("Income Averaging"), then
income received by the trust will be distributed on a prorated basis of
one-twelfth of the estimated annual income to the trust for the ensuing 12
months. All distributions will be net of applicable expenses. There is no
assurance that any actual distributions will be made since all dividends
received may be used to pay expenses. In addition, excess amounts from the
Capital Account of a trust, if any, will be distributed at least annually to
the unitholders then of record. Proceeds received from the disposition of any
of the securities after a record date and prior to the following distribution
date will be held in the Capital Account and not distributed until the next
distribution

date applicable to the Capital Account. The trustee shall be required to make a
distribution from the Capital Account if the cash balance on deposit therein
available for distribution shall be sufficient to distribute at least $1.00 per
100 units. The trustee is not required to pay interest on funds held in the
Capital or Income Accounts (but may itself earn interest thereon and therefore
benefits from the use of such funds). The trustee is authorized to reinvest any
funds held in the Capital or Income Accounts, pending distribution, in U.S.
Treasury obligations which mature on or before the next applicable distribution
date. Any obligations so acquired must be held until they mature and proceeds
therefrom may not be reinvested.

The distribution to the unitholders as of each record date will be made on
the following distribution date or shortly thereafter and shall consist of an
amount substantially equal to such portion of the unitholders' pro rata share
of the dividend distributions then held in the Income Account after deducting
estimated expenses. Because dividends are not received by a trust at a constant
rate throughout the year, such distributions to unitholders are expected to
fluctuate. However, if the trust uses Income Averaging, the trust prorates the
income distribution on an annual basis and annual income distributions are
expected to vary from year to year. If the amount on deposit in the Income
Account is insufficient for payment of the amount of income to be distributed
on a monthly basis, the trustee shall advance out of its own funds and cause to
be deposited in and credited to such Income Account such amount as may be
required to permit payment of the monthly income distribution. The trustee
shall be entitled to be reimbursed by the trust, without interest, out of
income received by the trust subsequent to the date of such advance and subject
to the condition that any such reimbursement shall be made only if it will not
reduce the funds in or available for the Income Account to an amount less than
required for the next ensuing distribution. Persons who purchase units will
commence receiving distributions only after such person becomes a record owner.
A person will become the owner of units, and thereby a unitholder of record, on
the date of settlement provided payment has been received. Notification to the
trustee of the transfer of units is the responsibility of the purchaser, but in
the normal course of business such notice is provided by the selling
broker-dealer.

The trustee will periodically deduct from the Income Account of a trust
and, to the extent funds are not sufficient therein, from the Capital Account
of a trust amounts necessary to pay the expenses of a trust. The trustee also
may withdraw from said accounts such amounts, if any, as it deems necessary to
establish a reserve for any governmental charges payable out of a trust.
Amounts so withdrawn shall not be considered a part of a trust's assets until
such time as the trustee shall return all or any part of such amounts to the
appropriate accounts. In addition, the trustee may withdraw from the Income and
Capital Accounts of a trust such amounts as may be necessary to cover
redemptions of units.

Distribution Reinvestment. Unitholders may elect to have distributions of
capital (including capital gains) or dividends, if any, or both automatically
invested into additional units of their trust without a sales fee.

Your trust will pay any deferred sales fee per unit regardless of any
sales fee discounts. However, if you elect to have distributions on your units
reinvested into additional units of your trust, you will be credited the amount
of any remaining deferred sales charge on such additional units at the time of
reinvestment.

Unitholders who are receiving distributions in cash may elect to
participate in distribution reinvestment by filing with the Program Agent an
election to have such distributions reinvested without charge. Such election
must be received by the Program Agent at least ten days prior to the record
date applicable to any distribution

in order to be in effect for such record date. Any such election shall remain
in effect until a subsequent notice is received by the Program Agent.

The Program Agent is The Bank of New York Mellon. All inquiries concerning
participating in distribution reinvestment should be directed to The Bank of
New York Mellon at its Unit Investment Trust Division office.

Statements to Unitholders. With each distribution, the trustee will
furnish to each registered holder a statement of the amount of income and the
amount of other receipts, if any, which are being distributed, expressed in
each case as a dollar amount per unit.

The accounts of a trust will not be audited annually unless the sponsor
determines that such an audit would be in the best interest of the unitholders
of the trust. If an audit is conducted, it will be done at the related trust's
expense, by independent public accountants designated by the sponsor. The
accountants' report will be furnished by the trustee to any unitholder upon
written request. Within a reasonable period of time after the end of each
calendar year, the trustee shall furnish to each person who at any time during
the calendar year was a unitholder of a trust a statement, covering the
calendar year, generally setting forth for the trust:

(A) As to the Income Account:

(1) Income received;

(2) Deductions for applicable taxes and for fees and expenses of the
trust and for redemptions of units, if any; and

(3) The balance remaining after such distributions and deductions,
expressed in each case both as a total dollar amount and as a
dollar amount representing the pro rata share of each unit
outstanding on the last business day of such calendar year; and

(B) As to the Capital Account:

(1) The dates of disposition of any securities and the net proceeds
received therefrom;

(2) Deductions for payment of applicable taxes and fees and expenses
of the trust; and

(3) The balance remaining after such distributions and deductions
expressed both as a total dollar amount and as a dollar amount
representing the pro rata share of each unit outstanding on the
last business day of such calendar year; and

(1) A list of the securities as of the last business day of such
calendar year;

(2) The number of units outstanding on the last business day of such
calendar year;

(3) The redemption price based on the last evaluation made during
such calendar year; and

(4) The amount actually distributed during such calendar year from
the Income and Capital Accounts separately stated, expressed both
as total dollar amounts and as dollar amounts per unit
outstanding on the record dates for each such distribution.

Rights of Unitholders. A unitholder may at any time tender units to the
trustee for redemption. The death or incapacity of any unitholder will not
operate to terminate a trust nor entitle legal representatives or heirs to
claim an accounting or to bring any action or proceeding in any court for
partition or winding up of a trust. No unitholder shall have the right to
control the operation and management of a trust in any manner, except to vote
with respect to the amendment of the trust agreement or termination of a
trust.

Amendment and Termination. The trust agreement may be amended by the
trustee and the sponsor without the consent of any of the unitholders: (1) to
cure any ambiguity or to correct or supplement any provision which may be
defective or inconsistent; (2) to change any provision thereof as may be
required by the Securities and Exchange Commission or any successor
governmental agency; (3) to make such provisions as shall not materially
adversely affect the interests of the unitholders; or (4) to make such other
amendments as may be necessary for a trust to qualify as a regulated investment
company, in the case of a trust which has elected to qualify as such. The trust
agreement with respect to any trust may also be amended in any respect by the
sponsor and the trustee, or any of the provisions thereof may be waived, with
the consent of the holders of units representing 66 2/3% of the units then
outstanding of the trust, provided that no such amendment or waiver will reduce
the interest of any unitholder thereof without the consent of such unitholder
or reduce the percentage of units required to consent to any such amendment or
waiver without the consent of all unitholders of the trust. In no event shall
the trust agreement be amended to increase the number of units of a trust
issuable thereunder, to permit the acquisition of any securities in addition to
or in substitution for those initially deposited in the trust or to adversely
affect the characterization of a trust as a regulated investment company for
federal income tax purposes, except in accordance with the provisions of the
trust agreement. The trustee shall promptly notify unitholders of the substance
of any such amendment.

The trust agreement provides that a trust shall terminate upon the
liquidation, redemption or other disposition of the last of the securities held
in the trust but in no event is it to continue beyond the mandatory termination
date set forth in Part A of the prospectus. If the value of a trust shall be
less than the applicable minimum value stated in the prospectus, the trustee
may, in its discretion, and shall, when so directed by the sponsor, terminate
the trust. A trust may be terminated at any time by the holders of units
representing 66 2/3% of the units thereof then outstanding. In addition, the
sponsor may terminate a trust if it is based on a security index and the index
is no longer maintained.

Beginning nine business days prior to, but no later than, the mandatory
termination date described in the prospectus, the trustee may begin to sell all
of the remaining underlying securities on behalf of unitholders in connection
with the termination of the trust. The sponsor may assist the trustee in these
sales and receive compensation to the extent permitted by applicable law. The
sale proceeds will be net of any incidental expenses involved in the sales.

The trustee will attempt to sell the securities as quickly as it can
during the termination proceedings without, in its judgment, materially
adversely affecting the market price of the securities, but it is expected that
all of the securities will in any event be disposed of within a reasonable time
after a trust's termination. The sponsor does not anticipate that the period
will be longer than one month, and it could be as short as one day, depending
on the liquidity of the securities being sold. The liquidity of any security
depends on the daily trading volume of the security and the amount that the
sponsor has available for sale on any particular day. Of course, no assurances
can be given that the market value of the securities will not be adversely
affected during the termination proceedings.

Within a reasonable period after termination, the trustee will sell any
securities remaining in a trust and, after paying all expenses and charges
incurred by the trust, will distribute to unitholders thereof their pro rata
share of the balances remaining in the Income and Capital Accounts of the
trust.

The sponsor currently intends, but is not obligated, to offer for sale
units of a subsequent series of certain trusts at approximately one year after
the inception date of such trusts. If the sponsor does offer such units for
sale, unitholders may be given the opportunity to purchase such units at a
public offering price which includes a reduced sales fee. There is, however, no
assurance that units of any new series of a trust will be offered for sale at
that time, or if offered, that there will be sufficient units available for
sale to meet the requests of any or all unitholders.

The Trustee. The trustee is The Bank of New York Mellon, a trust company
organized under the laws of New York. The Bank of New York Mellon has its Unit
Investment Trust Division offices at 2 Hanson Place, 12th Fl., Brooklyn, New
York 11217, telephone 1-800-701-8178. The Bank of New York Mellon is subject to
supervision and examination by the Superintendent of Banks of the State of New
York and the Board of Governors of the Federal Reserve System, and its deposits
are insured by the Federal Deposit Insurance Corporation to the extent
permitted by law.

The trustee, whose duties are ministerial in nature, has not participated
in selecting the portfolio of any trust. In accordance with the trust
agreement, the trustee shall keep records of all transactions at its office.
Such records shall include the name and address of, and the number of units
held by, every unitholder of a trust. Such books and records shall be open to
inspection by any unitholder at all reasonable times during usual business
hours. The trustee shall make such annual or other reports as may from time to
time be required under any applicable state or federal statute, rule or
regulation. The trustee shall keep a certified copy or duplicate original of
the trust agreement on file in its office available for inspection at all
reasonable times during usual business hours by any unitholder, together with a
current list of the securities held in each trust. Pursuant to the trust
agreement, the trustee may employ one or more agents for the purpose of custody
and safeguarding of securities comprising a trust.

Under the trust agreement, the trustee or any successor trustee may resign
and be discharged of a trust created by the trust agreement by executing an
instrument in writing and filing the same with the sponsor. The trustee or
successor trustee must mail a copy of the notice of resignation to all
unitholders then of record, not less than sixty days before the date specified
in such notice when such resignation is to take effect. The sponsor upon
receiving notice of such resignation is obligated to appoint a successor
trustee promptly. If, upon such resignation, no successor trustee has been
appointed and has accepted the appointment within thirty days after

notification, the retiring trustee may apply to a court of competent
jurisdiction for the appointment of a successor. The sponsor may at any time
remove the trustee, with or without cause, and appoint a successor trustee as
provided in the trust agreement. Notice of such removal and appointment shall
be mailed to each unitholder by the sponsor. Upon execution of a written
acceptance of such appointment by such successor trustee, all the rights,
powers, duties and obligations of the original trustee shall vest in the
successor. The trustee must be a corporation organized under the laws of the
United States, or any state thereof, be authorized under such laws to exercise
trust powers and have at all times an aggregate capital, surplus and undivided
profits of not less than $5,000,000.

The Sponsor. Claymore Securities, Inc. specializes in the creation,
development and distribution of investment solutions for advisors and their
valued clients. Claymore Securities, Inc. was created as Ranson & Associates,
Inc., in 1995 and is the successor sponsor to unit investment trusts formerly
sponsored by EVEREN Unit Investment Trusts, a service of EVEREN Securities,
Inc. Claymore Securities, Inc. is also the sponsor and successor sponsor of
Series of Ranson Unit Investment Trusts and The Kansas Tax-Exempt Trust and
Multi-State Series of The Ranson Municipal Trust. On October 29, 2001, Ranson &
Associates, Inc. was acquired by Claymore Group LLC. The sale to Claymore Group
LLC was financed by a loan from The Bank of New York Mellon, the trustee. In
November 2001, the sponsor changed its name from Ranson & Associates, Inc. to
Claymore Securities, Inc. Claymore Securities, Inc. has been active in public
and corporate finance, has underwritten closed-end funds and has sold bonds,
mutual funds, closed-end funds, exchange-traded funds, structured products and
unit investment trusts and maintained secondary market activities relating
thereto. At present, Claymore Securities, Inc. which is a member of the
Financial Industry Regulatory Authority (FINRA), is the sponsor to each of the
above-named unit investment trusts. The sponsor's offices are located at 2455
Corporate West Drive, Lisle, Illinois 60532.

If at any time the sponsor shall fail to perform any of its duties under
the trust agreement or shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or shall have its affairs taken over by public
authorities, then the trustee may (a) appoint a successor sponsor at rates of
compensation deemed by the trustee to be reasonable and not exceeding such
reasonable amounts as may be prescribed by the Securities and Exchange
Commission, or (b) terminate the trust agreement and liquidate any trust as
provided therein, or (c) continue to act as trustee without terminating the
trust agreement.

The Supervisor and the Evaluator. Claymore Securities, Inc., the sponsor,
also serves as evaluator and supervisor. The evaluator and supervisor may
resign or be removed by the trustee in which event the trustee is to use its
best efforts to appoint a satisfactory successor. Such resignation or removal
shall become effective upon acceptance of appointment by the successor
evaluator. If upon resignation of the evaluator no successor has accepted
appointment within thirty days after notice of resignation, the evaluator may
apply to a court of competent jurisdiction for the appointment of a successor.
Notice of such registration or removal and appointment shall be mailed by the
trustee to each unitholder. As evaluator, Claymore Securities, Inc. utilizes
the trustee to perform certain evaluation services.

Limitations on Liability. The sponsor is liable for the performance of its
obligations arising from its responsibilities under the trust agreement, but
will be under no liability to the unitholders for taking any action or
refraining from any action in good faith pursuant to the trust agreement or for
errors in judgment, except in cases of its own gross negligence, bad faith or
willful misconduct or its reckless disregard for its duties thereunder. The
sponsor shall not be liable or responsible in any way for depreciation or loss
incurred by reason of the sale of any securities.

The trust agreement provides that the trustee shall be under no liability
for any action taken in good faith in reliance upon prima facie properly
executed documents or for the disposition of moneys, securities or certificates
except by reason of its own gross negligence, bad faith or willful misconduct,
or its reckless disregard for its duties under the trust agreement, nor shall
the trustee be liable or responsible in any way for depreciation or loss
incurred by reason of the sale by the trustee of any securities. In the event
that the sponsor shall fail to act, the trustee may act and shall not be liable
for any such action taken by it in good faith. The trustee shall not be
personally liable for any taxes or other governmental charges imposed upon or
in respect of the securities or upon the interest thereof. In addition, the
trust agreement contains other customary provisions limiting the liability of
the trustee.

The unitholders may rely on any evaluation furnished by the evaluator and
shall have no responsibility for the accuracy thereof. The trust agreement
provides that the determinations made by the evaluator shall be made in good
faith upon the basis of the best information available to it, provided,
however, that the evaluator shall be under no liability to the trustee or
unitholders for errors in judgment, but shall be liable for its gross
negligence, bad faith or willful misconduct or its reckless disregard for its
obligations under the trust agreement.

Expenses of the Trust

The sponsor does not charge a trust an annual advisory fee. The sponsor
will receive a portion of the sale commissions paid in connection with the
purchase of units and will share in profits, if any, related to the deposit of
securities in the trust. The sponsor and/or its affiliates do, also, receive an
annual fee as set forth in Part A of the prospectus for maintaining
surveillance over the portfolio and for performing certain administrative
services for the trust (the "Sponsor's Supervisory Fee"). In providing such
supervisory services, the sponsor may purchase research from a variety of
sources, which may include dealers of the trusts. If so provided in Part A of
the prospectus, the sponsor may also receive an annual fee for providing
bookkeeping and administrative services for a trust (the "Bookkeeping and
Administrative Fee"). Such services may include, but are not limited to, the
preparation of various materials for unitholders and providing account
information to the unitholders. If so provided in Part A of the prospectus, the
evaluator may also receive an annual fee for performing evaluation services for
the trusts (the "Evaluator's Fee"). In addition, if so provided in Part A of
the prospectus, a trust may be charged an annual licensing fee to cover
licenses for the use of service marks, trademarks, trade names and intellectual
property rights and/or for the use of databases and research. The trust will
bear all operating expenses. Estimated annual trust operating expenses are as
set forth in Part A of the prospectus; if actual expenses are higher than the
estimate, the excess will be borne by the trust. The estimated expenses include
listing fees but do not include the brokerage commissions and other
transactional fees payable by the trust in purchasing and selling securities.

The trustee receives for its services that fee set forth in Part A of the
prospectus. The trustee's fee, which is paid monthly, is based on the largest
number of units of a trust outstanding at any time during the primary offering
period. After the primary offering period, the fee shall accrue daily and be
based on the number of units outstanding on the first business day of each
calendar year in which the fee is calculated or the number of units outstanding
at the end of the primary offering period, as appropriate. The Sponsor's
Supervisory Fee, the Bookkeeping and Administrative Fee and the Evaluator's Fee
are paid monthly and are based on the largest number of units of a trust
outstanding at any time during the primary offering period. After the primary
offering period, these fees shall accrue daily and be based on the number of
units outstanding on the first business day of each calendar year in which a
fee is calculated or the number of units outstanding at the end of the primary
offering period, as appropriate. The trustee benefits to the extent there are
funds for future distributions, payment of expenses and redemptions in the
Capital and Income Accounts since these Accounts are non-interest bearing and
the amounts earned by the trustee are retained by the trustee. Part of the
trustee's compensation for its services to a trust is expected to result from
the use of these funds. In addition, the Sponsor's Supervisory Fee, Bookkeeping
and Administrative Fee, Evaluator's Fee and the Trustee's Fee may be adjusted
in accordance with the cumulative percentage increase of the United States
Department of Labor's Consumer Price Index entitled "All Services Less Rent"
since the establishment of the trust. In addition, with respect to any fees
payable to the sponsor or an affiliate of the sponsor for providing bookkeeping
and other administrative services, supervisory services and evaluation
services, such individual fees may exceed the actual costs of providing such
services for a trust, but at no time will the total amount received for such
services, in the aggregate, rendered to all unit investment trusts of which
Claymore is the sponsor in any calendar year exceed the actual cost to the
sponsor or its affiliates of supplying such services, in the aggregate, in such
year. In addition, the trustee may reimburse the sponsor out of its own assets
for services performed by employees of the sponsor in connection with the
operation of your trust.

The trust will also pay a fee to the sponsor for creating and developing
the trust, including determining the trust objective, policies, composition and
size, selecting service providers and information services, and for providing
other similar administrative and ministerial functions. Your trust pays this
"creation and development fee" as a fixed dollar amount at the close of the
initial offering period. The sponsor does not use the fee to pay distribution
expenses or as compensation for sales efforts.

The following additional charges are or may be incurred by the trust: (a)
fees for the trustee's extraordinary services; (b) expenses of the trustee
(including legal and auditing expenses, but not including any fees and expenses
charged by an agent for custody and safeguarding of securities) and of counsel,
if any; (c) various governmental charges; (d) expenses and costs of any action
taken by the trustee to protect the trust or the rights and interests of the
unitholders; (e) indemnification of the trustee for any loss, liability or
expense incurred by it in the administration of the trust not resulting from
gross negligence, bad faith or willful misconduct on its part; (f)
indemnification of the sponsor for any loss, liability or expense incurred in
acting in that capacity without gross negligence, bad faith or willful
malfeasance or its reckless disregard for its obligations under the trust
agreement; (g) any offering costs incurred after the end of the initial
offering period; and (h) expenditures incurred in contacting unitholders upon
termination of the trust. The fees and expenses set forth herein are payable
out of a trust and, when owing to the trustee, are secured by a lien on the
trust. Since the securities are all stocks, and the income stream produced by
dividend payments, if any, is unpredictable, the sponsor cannot provide any
assurance that dividends will be sufficient to meet any or all expenses of a
trust. If the balances in the Income and Capital Accounts are insufficient to
provide

for amounts payable by the trust, the trustee has the power to sell securities
to pay such amounts. These sales may result in capital gains or losses to
unitholders. It is expected that the income stream produced by dividend
payments may be insufficient to meet the expenses of a trust and, accordingly,
it is expected that securities will be sold to pay all of the fees and expenses
of the trust.

The trust shall also bear the expenses associated with updating the
trust's registration statement and maintaining registration or qualification of
the units and/or a trust under federal or state securities laws subsequent to
initial registration. Such expenses shall include legal fees, accounting fees,
typesetting fees, electronic filing expenses and regulatory filing fees. The
expenses associated with updating registration statements have been
historically paid by a unit investment trust's sponsor.

Portfolio Transactions and Brokerage Allocation

When a trust sells securities, the composition and diversity of the
securities in the trust may be altered. In order to obtain the best price for a
trust, it may be necessary for the supervisor to specify minimum amounts (such
as 100 shares) in which blocks of securities are to be sold. In effecting
purchases and sales of a trust's portfolio securities, the sponsor may direct
that orders be placed with and brokerage commissions be paid to brokers,
including brokers which may be affiliated with the trust, the sponsor or
dealers participating in the offering of units.

Purchase, Redemption and Pricing of Units

Public Offering Price. Units of a trust are offered at the public offering
price (which is based on the aggregate underlying value of the securities in
the trust and includes the initial sales fee plus a pro rata share of any
accumulated amounts in the accounts of the trust). The initial sales fee is
equal to the difference between the maximum sales fee and the sum of the
remaining deferred sales fee and the creation and development fee ("C&D Fee").
The maximum sales fee is set forth in Part A of the prospectus. The deferred
sales fee and the C&D Fee will be collected as described in this prospectus.
Units purchased subsequent to the initial deferred sales fee payment will be
subject to the initial sales fee, the remaining deferred sales fee payments and
the C&D Fee. Units sold or redeemed prior to such time as the entire applicable
deferred sales fee has been collected will be assessed the remaining deferred
sales fee at the time of such sale or redemption. During the initial offering
period, a portion of the public offering price includes an amount of securities
to pay for all or a portion of the costs incurred in establishing a trust
("organization costs"). These organization costs include the cost of preparing
the registration statement, the trust indenture and other closing documents,
registering units with the Securities and Exchange Commission and states, the
initial audit of the trust portfolio, legal fees, fees paid to a portfolio
consultant for assisting the sponsor in selecting the trust's portfolio, and
the initial fees and expenses of the trustee. These costs will be deducted from
a trust as of the end of the initial offering period or after six months, at
the discretion of the sponsor. As indicated above, the initial public offering
price of the units was established by dividing the aggregate underlying value
of the securities by the number of units outstanding. Such price determination
as of the opening of business on the date a trust was created was made on the
basis of an evaluation of the securities in the trust prepared by the
evaluator. After the opening of business on this date, the evaluator will
appraise or cause to be appraised daily the value of the underlying securities
as of the close of the New York Stock Exchange on days the New York Stock
Exchange is open and will adjust the public offering price of the units
commensurate with such valuation. Such public offering price

will be effective for all orders properly received at or prior to the close of
trading on the New York Stock Exchange on each such day. Orders received by the
trustee, sponsor or any dealer for purchases, sales or redemptions after that
time, or on a day when the New York Stock Exchange is closed, will be held
until the next determination of price.

The value of the securities is determined on each business day by the
evaluator based on the closing sale prices on a national securities exchange or
the Nasdaq National Market System or by taking into account the same factors
referred to under "Computation of Redemption Price."

Public Distribution of Units. During the initial offering period, units of
a trust will be distributed to the public at the public offering price thereof.
Upon the completion of the initial offering, units which remain unsold or which
may be acquired in the secondary market may be offered at the public offering
price determined in the manner provided above.

The sponsor intends to qualify units of a trust for sale in a number of
states. Units will be sold through dealers who are members of FINRA and through
others. Broker-dealers and others will be allowed a concession or agency
commission in connection with the distribution of units during the initial
offering period as set forth in the prospectus.

Certain commercial banks may be making units of a trust available to their
customers on an agency basis. Furthermore, as a result of certain legislative
changes effective November 1999, banks are no longer prohibited from certain
affiliations with securities firms. This new legislation grants banks new
authority to conduct certain authorized activity, such as sales of units,
through financial subsidiaries. A portion of the sales charge discussed above
is retained by or remitted to the banks or their financial subsidiaries for
these agency and brokerage transactions. The sponsor reserves the right to
change the concessions or agency commissions set forth in the prospectus from
time to time. In addition to such concessions or agency commissions, the
sponsor may, from time to time, pay or allow additional concessions or agency
commissions, in the form of cash or other compensation, to dealers employing
registered representatives who sell, during a specified time period, a minimum
dollar amount of units of unit investment trusts underwritten by the sponsor.
At various times the sponsor may implement programs under which the sales force
of a broker or dealer may be eligible to win nominal awards for certain sales
efforts, or under which the sponsor will reallow to any such broker or dealer
that sponsors sales contests or recognition programs conforming to criteria
established by the sponsor, or participates in sales programs sponsored by the
sponsor, an amount not exceeding the total applicable sales charges on the
sales generated by such person at the public offering price during such
programs. Also, the sponsor in its discretion may from time to time pursuant to
objective criteria established by the sponsor pay fees to qualifying brokers or
dealers for certain services or activities which are primarily intended to
result in sales of units of a trust. Such payments are made by the sponsor out
of its own assets, and not out of the assets of any trust. These programs will
not change the price unitholders pay for their units or the amount that a trust
will receive from the units sold. The difference between the discount and the
sales charge will be retained by the sponsor.

The sponsor reserves the right to reject, in whole or in part, any order
for the purchase of units.

Sponsor Profits. The sponsor will receive gross sales fees equal to the
percentage of the public offering price of the units of a trust described in
the prospectus. In addition, the sponsor may realize a profit (or sustain a
loss) as of the date a trust is created resulting from the difference between
the purchase prices of the securities to the sponsor and the cost of such
securities to the trust. Thereafter, on subsequent deposits the sponsor may
realize profits or sustain losses from such deposits. The sponsor may realize
additional profits or losses during the initial offering period on unsold units
as a result of changes in the daily market value of the securities in the
trust.

Market for Units. After the initial offering period, the sponsor may
maintain a market for units of a trust offered hereby and continuously offer to
purchase said units at prices, determined by the evaluator, based on the value
of the underlying securities. Unitholders who wish to dispose of their units
should inquire of their broker as to current market prices in order to
determine whether there is in existence any price in excess of the redemption
price and, if so, the amount thereof. Unitholders who sell or redeem units
prior to such time as the entire deferred sales fee on such units has been
collected will be assessed the amount of the remaining deferred sales fee at
the time of such sale or redemption. The offering price of any units resold by
the sponsor will be in accord with that described in the currently effective
prospectus describing such units. Any profit or loss resulting from the resale
of such units will belong to the sponsor. If the sponsor decides to maintain a
secondary market, it may suspend or discontinue purchases of units of the trust
if the supply of units exceeds demand, or for other business reasons.

Redemption. A unitholder who does not dispose of units in the secondary
market described above may cause units to be redeemed by the trustee by making
a written request to the trustee at its Unit Investment Trust Division office
in the city of New York. Unitholders must sign the request, and such transfer
instrument, exactly as their names appear on the records of the trustee. If the
amount of the redemption is $500 or less and the proceeds are payable to the
unitholder(s) of record at the address of record, no signature guarantee is
necessary for redemptions by individual account owners (including joint
owners). Additional documentation may be requested, and a signature guarantee
is always required, from corporations, executors, administrators, trustees,
guardians or associations. The signatures must be guaranteed by a participant
in the Securities Transfer Agents Medallion Program ("STAMP") or such other
signature guaranty program in addition to, or in substitution for, STAMP, as
may be accepted by the trustee.

Redemption shall be made by the trustee no later than the third business
day following the day on which a tender for redemption is received (the
"Redemption Date") by payment of cash equivalent to the redemption price,
determined as set forth below under "Computation of Redemption Price," as of
the close of the New York Stock Exchange next following such tender, multiplied
by the number of units being redeemed. Any units redeemed shall be canceled and
any undivided fractional interest in the related trust extinguished. The price
received upon redemption might be more or less than the amount paid by the
unitholder depending on the value of the securities in the trust at the time of
redemption. Unitholders who sell or redeem units prior to such time as the
entire deferred sales fee on such units has been collected will be assessed the
amount of the remaining deferred sales fee at the time of such sale or
redemption. Certain broker-dealers may charge a transaction fee for processing
redemption requests.

Under regulations issued by the Internal Revenue Service, the trustee is
required to withhold a specified percentage of the principal amount of a unit
redemption if the trustee has not been furnished

the redeeming unitholder's tax identification number in the manner required by
such regulations. Any amount so withheld is transmitted to the Internal Revenue
Service and may be recovered by the unitholder only when filing a tax return.
Under normal circumstances the trustee obtains the unitholder's tax
identification number from the selling broker. However, any time a unitholder
elects to tender units for redemption, such unitholder should make sure that
the trustee has been provided a certified tax identification number in order to
avoid this possible "back-up withholding." In the event the trustee has not
been previously provided such number, one must be provided at the time
redemption is requested. Any amounts paid on redemption representing unpaid
dividends shall be withdrawn from the Income Account of a trust to the extent
that funds are available for such purpose. All other amounts paid on redemption
shall be withdrawn from the Capital Account for a trust.

Unitholders tendering units for redemption may request an in-kind
distribution (a "Distribution In Kind") from the trustee in lieu of cash
redemption. A unitholder may request a Distribution In Kind of an amount and
value of securities per unit equal to the redemption price per unit as
determined as of the evaluation time next following the tender, provided that
the tendering unitholder is (1) entitled to receive at least $25,000 of
proceeds as part of his or her distribution or if he paid at least $25,000 to
acquire the units being tendered and (2) the unitholder has elected to redeem
at least thirty business days prior to the termination of the trust. If the
unitholder meets these requirements, a Distribution In Kind will be made by the
trustee through the distribution of each of the securities of the trust in book
entry form to the account of the unitholder's bank or broker-dealer at
Depository Trust Company. The tendering unitholder shall be entitled to receive
whole shares of each of the securities comprising the portfolio of the trust
and cash from the Capital Account equal to the fractional shares to which the
tendering unitholder is entitled. The trustee shall make any adjustments
necessary to reflect differences between the redemption price of the units and
the value of the securities distributed in kind as of the date of tender. If
funds in the Capital Account are insufficient to cover the required cash
distribution to the tendering unitholder, the trustee may sell securities. The
in-kind redemption option may be terminated by the sponsor at any time. The
trustee is empowered to sell securities in order to make funds available for
the redemption of units. To the extent that securities are sold or redeemed in
kind, the size of a trust will be, and the diversity of a trust may be, reduced
but each remaining unit will continue to represent approximately the same
proportional interest in each security. Sales may be required at a time when
securities would not otherwise be sold and may result in lower prices than
might otherwise be realized. The price received upon redemption may be more or
less than the amount paid by the unitholder depending on the value of the
securities in the portfolio at the time of redemption.

Unitholders of a trust that holds closed-end funds or other investment
company securities who request a Distribution In Kind will be subject to any
12b-1 Fees or other service or distribution fees applicable to the underlying
securities.

The right of redemption may be suspended and payment postponed for more
than three business days following the day on which tender for redemption is
made (1) for any period during which the New York Stock Exchange is closed,
other than customary weekend and holiday closings, or during which (as
determined by the Securities and Exchange Commission) trading on the New York
Stock Exchange is restricted; (2) for any period during which an emergency
exists as a result of which disposal by the trustee of securities is not
reasonably practicable or it is not reasonably practicable to fairly determine
the value of the underlying securities in accordance with the trust agreement;
or (3) for such other period as the Securities and Exchange

Commission may by order permit. The trustee is not liable to any person in any
way for any loss or damage which may result from any such suspension or
postponement.

Computation of Redemption Price. The redemption price per unit (as well as
the secondary market public offering price) will generally be determined on the
basis of the last sale price of the securities in a trust. The redemption price
per unit is the pro rata share of each unit in a trust determined generally on
the basis of (i) the cash on hand in the trust or moneys in the process of
being collected and (ii) the value of the securities in the trust less (a)
amounts representing taxes or other governmental charges payable out of the
trust, (b) any amount owing to the trustee for its advances and (c) the accrued
expenses or remaining deferred sales fees of the trust. During the initial
offering period, the redemption price and the secondary market repurchase price
will also include estimated organizational costs. The evaluator may determine
the value of the securities in the trust in the following manner: if the
securities are listed on a national or foreign securities exchange or the
Nasdaq National Market System, such evaluation shall generally be based on the
last available sale price on or immediately prior to the Evaluation Time on the
exchange or Nasdaq National Market System which is the principal market
therefor, which shall be deemed to be the New York Stock Exchange if the
securities are listed thereon (unless the evaluator deems such price
inappropriate as a basis for evaluation) or, if there is no such available sale
price on such exchange, at the last available bid prices (offer prices for
primary market purchases) of the securities. Securities not listed on the New
York Stock Exchange but principally traded on the Nasdaq National Market System
will be valued at the Nasdaq National Market System's official closing price.
If the securities are not so listed or, if so listed, the principal market
therefor is other than on such exchange or there is no such available sale
price on such exchange, such evaluation shall generally be based on the
following methods or any combination thereof whichever the evaluator deems
appropriate: (i) on the basis of the current bid price (offer prices for
primary market purchases) for comparable securities (unless the evaluator deems
such price inappropriate as a basis for evaluation), (ii) by determining the
valuation of the securities on the bid side (offer side for primary market
purchases) of the market by appraisal or (iii) by any combination of the above.
Notwithstanding the foregoing, the evaluator or its designee, will generally
value foreign securities primarily traded on foreign exchanges at their fair
value which may be other than their market price. If the trust holds securities
denominated in a currency other than U.S. dollars, the evaluation of such
security is based upon U.S. dollars based on current bid side (offer side for
primary market purchases) exchange rates (unless the evaluator deems such
prices inappropriate as a basis for valuation).

Retirement Plans. A trust may be well suited for purchase by Individual
Retirement Accounts, Keogh Plans, pension funds and other qualified retirement
plans. Generally, capital gains and income received under each of the foregoing
plans are deferred from federal taxation. All distributions from such plans are
generally treated as ordinary income but may, in some cases, be eligible for
special income averaging or tax deferred rollover treatment. Investors
considering participation in any such plan should review specific tax laws
related thereto and should consult their attorneys or tax advisers with respect
to the establishment and maintenance of any such plan. Such plans are offered
by brokerage firms and other financial institutions. The trust will lower the
minimum investment requirement for IRA accounts to $250. Fees and charges with
respect to such plans may vary.

Ownership of Units. Ownership of units will not be evidenced by
certificates. All evidence of ownership of units will be recorded in book entry
form at Depository Trust Company ("DTC") through

an investor's brokers' account. Units held through DTC will be registered in
the nominee name of Cede & Co. Individual purchases of beneficial ownership
interest in the trust will be made in book entry form through DTC. Ownership
and transfer of units will be evidenced and accomplished by book entries made
by DTC and its participants. DTC will record ownership and transfer of the
units among DTC participants and forward all notices and credit all payments
received in respect of the units held by the DTC participants. Beneficial
owners of units will receive written confirmation of their purchases and sale
from the broker dealer or bank from whom their purchase was made. Units are
transferable by making a written request properly accompanied by a written
instrument or instruments of transfer which should be sent registered or
certified mail for the protection of the unitholder. Record holders must sign
such written request exactly as their names appear on the records of the trust.
The signatures must be guaranteed by a participant in the STAMP or such other
signature guaranty program in addition to, or in substitution for, STAMP, as
may be acceptable by the trustee.

Units may be purchased in denominations of one unit or any multiple
thereof, subject to the minimum investment requirement. Fractions of units, if
any, will be computed to three decimal places.

Taxes

This section summarizes some of the main U.S. federal income tax
consequences of owning units of a trust. This section is current as of the date
of this prospectus. Tax laws and interpretations change frequently, and these
summaries do not describe all of the tax consequences to all taxpayers. For
example, these summaries generally do not describe your situation if you are a
corporation, a non-U.S. person, a broker/dealer, or other investor with special
circumstances. In addition, this section does not describe your state, local or
foreign tax consequences.

This federal income tax summary is based in part on the advice and opinion
of counsel to the sponsor. The Internal Revenue Service could disagree with any
conclusions set forth in this section. In addition, our counsel was not asked
to review, and has not reached a conclusion with respect to the federal income
tax treatment of the assets to be deposited in your trust. This may not be
sufficient for you to use for the purpose of avoiding penalties under federal
tax law.

As with any investment, you should seek advice based on your individual
circumstances from your own tax advisor.

Assets of the Trusts. Each trust is expected to hold (i) shares (the "RIC
Shares") in funds qualifying as regulated investment companies ("RICs") that
are treated as interests in regulated investment companies for federal income
tax purposes, and (ii) shares (the "Grantor Trust Shares") in entities
qualifying as grantor trusts (the "Grantor Trusts") for federal income tax
purposes, which in turn hold various commodities, including gold and silver
(the "Commodities"). It is possible that your trust will also hold other
assets, including assets that are treated differently for federal income tax
purposes from those described above, in which case you will have federal income
tax consequences different from or in addition to those described in this
section. All of the assets held by a trust constitute the "Trust Assets."
Neither our counsel nor we have analyzed the proper federal income tax
treatment of the Trust Assets and thus neither our counsel nor we have reached
a conclusion regarding the federal income tax treatment of the Trust Assets.

Trust Status. If your trust is at all times operated in accordance with
the documents establishing the trust and certain requirements of federal income
tax law are met, and if the Grantor Trusts in fact qualify and continue to
qualify as grantor trusts for federal income tax purposes, the trust will not
be taxed as a corporation for federal income tax purposes. As a unit owner, you
will be treated as the owner of a pro rata portion of each of the Trust Assets,
including a pro rata portion of the Commodities held by the Grantor Trusts, and
as such you will be considered to have received a pro rata share of income
(e.g., dividends and capital gains, if any) from each Trust Asset and each
Commodity when such income would be considered to be received by you if you
directly owned the Trust Assets and the Commodities. This is true even if you
elect to have your distributions reinvested into additional units. In addition,
the income from Trust Assets and Commodities that you must take into account
for federal income tax purposes is not reduced by amounts used to pay sales
charges or trust expenses or expenses of the Grantor Trusts.

Your Tax Basis and Income or Loss Upon Disposition. If your trust disposes
of Trust Assets or if a Grantor Trust disposes of any of its assets, you will
generally recognize gain or loss. If you dispose of your units or redeem your
units for cash, you will also generally recognize gain or loss. To determine
the amount of this gain or loss, you must subtract your tax basis in the
related Trust Assets or Commodities from your share of the total amount
received in the transaction. You can generally determine your initial tax basis
in each Trust Asset and each Commodity by apportioning the cost of your units,
including sales charges, among the Trust Assets and Commodities ratably
according to their values on the date you acquire your units. In certain
circumstances, however, you may have to adjust your tax basis after you acquire
your units (for example, in the case of certain dividends that exceed a
corporation's accumulated earnings and profits, as discussed below).

If you are an individual, the maximum marginal federal tax rate for net
capital gain is generally 15% (generally 5% for certain taxpayers in the 10%
and 15% tax brackets). These capital gains rates are generally effective for
taxable years beginning before January 1, 2011. Because these lower rates
expire after December 31, 2010, it is unlikely that you will receive any
long-term capital gains from the trust eligible for these lower rates (except
for any "capital gain dividends" as discussed below). For later periods, if you
are an individual, the maximum marginal federal tax rate for net capital gain
is generally 20% (10% for certain taxpayers in the 10% and 15% tax brackets).
The 20% rate is reduced to 18% and the 10% rate is reduced to 8% for long-term
capital gains from most property acquired after December 31, 2000 with a
holding period of more than five years.

As noted above, you will be treated as the owner of a pro rata portion of
each of the Commodities held by the Grantor Trusts. If (i) you dispose of your
units or redeem your units, (ii) your trust disposes of any Grantor Trust
Shares or (iii) any Grantor Trust disposes of any Commodity, you will generally
recognize gain or loss as if you had sold your pro rata portion of the
Commodities. Any such gain, in the case of Commodities such as silver and gold,
will generally be treated as gain from the sale or exchange of a collectible,
which in the case of individuals is subject to a maximum marginal federal
income tax rate of 28%, rather than the rates set forth in the previous
paragraphs.

Net capital gain equals net long-term capital gain minus net short-term
capital loss for the taxable year. Capital gain or loss is long-term if the
holding period for the asset is more than one year and is short-term if the
holding period for the asset is one year or less. You must exclude the date you
purchase your units to determine your holding period. The tax rates for capital
gains realized from assets held for one year or less

are generally the same as for ordinary income. The Internal Revenue Code,
however, treats certain capital gains as ordinary income in special
situations.

Dividends from RIC Shares. Some dividends on the RIC Shares may be
designated as "capital gain dividends," generally taxable to you as long-term
capital gains. Other dividends on the RIC Shares will generally be taxable to
you as ordinary income. Certain ordinary income dividends from a RIC may
qualify to be taxed at the same rates that apply to net capital gain (as
discussed above), provided certain holding period requirements are satisfied
and provided the dividends are attributable to qualifying dividends received by
the RIC itself. These special rules relating to the taxation of ordinary income
dividends from regulated investment companies generally apply to taxable years
beginning before January 1, 2011. RICs are required to provide notice to their
shareholders of the amount of any distribution that may be taken into account
as a dividend that is eligible for the capital gains tax rates. If you hold a
unit for six months or less or if your trust holds a RIC Share for six months
or less, any loss incurred by you related to the disposition of such RIC Share
will be treated as a long-term capital loss to the extent of any long-term
capital gain distributions received (or deemed to have been received) with
respect to such RIC Share. Distributions of income or capital gains declared on
the RIC Shares in October, November or December will be deemed to have been
paid to you on December 31 of the year they are declared, even when paid by the
RIC during the following January.

Dividends Received Deduction. Generally, a domestic corporation owning
units in a trust may be eligible for the dividends received deduction with
respect to such unit owner's pro rata portion of certain types of dividends
received by the trust. However, a corporation generally will not be entitled to
the dividends received deduction with respect to dividends from most foreign
corporations. A corporation that owns units will generally not be entitled to
the dividends received deduction with respect to many dividends received by
your trust, because the dividends received deduction is generally not available
for dividends from RICs. However, certain dividends on the RIC Shares that are
attributable to dividends received by the RIC itself from certain domestic
corporations may be designated by the RIC as being eligible for the dividends
received deduction.

In-Kind Distributions. Under certain circumstances as described in this
prospectus, you may request an in-kind distribution of Trust Assets when you
redeem your units at any time prior to 30 business days before your trust's
termination. However, this ability to request an in-kind distribution will
terminate at any time that the number of outstanding units has been reduced to
10% or less of the highest number of units issued by your trust. By electing to
receive an in-kind distribution, you will receive Trust Assets plus, possibly,
cash. You will not recognize gain or loss if you only receive whole Trust
Assets in exchange for the identical amount of your pro rata portion of the
same Trust Assets held by your trust. However, if you also receive cash in
exchange for a Trust Asset or a fractional portion of a Trust Asset, you will
generally recognize gain or loss based on the difference between the amount of
cash you receive and your tax basis in such Trust Asset or fractional portion.

Exchanges. If you elect to have your proceeds from your trust rolled over
into a future series of the trust, it is considered a sale for federal income
tax purposes and any gain on the sale will be treated as a capital gain, and
any loss will be treated as a capital loss. However, any loss you incur in
connection with the exchange of your units of your trust for units of the next
series will generally be disallowed with respect to this deemed sale and
subsequent deemed repurchase, to the extent the two trusts have substantially
identical Trust Assets under the wash sale provisions of the Internal Revenue
Code.

Limitations on the Deductibility of Trust Expenses. Generally, for federal
income tax purposes, you must take into account your full pro rata share of
your trust's income, including your full pro rata portion of each of the
Grantor Trust's income, even if some of that income is used to pay trust
expenses or Grantor Trust expenses. You may deduct your pro rata share of each
expense paid by your trust or by a Grantor Trust to the same extent as if you
directly paid the expense. You may be required to treat some or all of the
expenses of your trust or a Grantor Trust as miscellaneous itemized deductions.
Individuals may only deduct certain miscellaneous itemized deductions to the
extent they exceed 2% of adjusted gross income.

Foreign Investors, Taxes and Investments. If you are a foreign investor
(i.e., an investor other than a U.S. citizen or resident or a U.S. corporation,
partnership, estate or trust), you may not be subject to U.S. federal income
taxes, including withholding taxes, on some or all of the income from your
trust or on any gain from the sale or redemption of your units, provided that
certain conditions are met. You should consult your tax advisor with respect to
the conditions you must meet in order to be exempt for U.S. tax purposes. You
should also consult your tax advisor with respect to other U.S. tax withholding
and reporting requirements.

Under certain circumstances, a RIC may elect to pass through to its
shareholders certain foreign taxes paid by the RIC. If the RIC makes this
election with respect to RIC Shares, you must include in your income for
federal income tax purposes your portion of such taxes and you may be entitled
to a credit or deduction for such taxes.

New York Tax Status. Based on the advice of Dorsey & Whitney LLP, special
counsel to the trusts for New York tax matters, under the existing income tax
laws of the State and City of New York, your trust will not be taxed as a
corporation, and the income of your trust will be treated as the income of the
unit holders in the same manner as for federal income tax purposes. You should
consult your tax advisor regarding potential foreign, state or local taxation
with respect to your units.

Experts

Legal Matters. Chapman and Cutler LLP, 111 West Monroe Street, Chicago,
Illinois 60603, acts as counsel for the trusts and has passed upon the legality
of the units.

Independent Registered Public Accounting Firm. The statements of financial
condition, including the Trust Portfolios, appearing herein, have been audited
by Grant Thornton LLP, an independent registered public accounting firm, as set
forth in their report thereon appearing elsewhere herein, and are included in
reliance on such report given on the authority of such firm as experts in
accounting and auditing.

Description of Ratings

Standard & Poor's Issue Credit Ratings

A Standard & Poor's issue credit rating is a forward-looking opinion about
the credit worthiness of an obligor with respect to a specific financial
obligation, a specific class of financial obligations, or a specific

financial program (including ratings on medium-term note programs and
commercial paper programs). It takes into consideration the creditworthiness of
guarantors, insurers, or other forms of credit enhancement on the obligation
and takes into account the currency in which the obligation is denominated. The
opinion reflects Standard & Poor's view of the obligor's capacity and
willingness to meet its financial commitments as they come due, and may assess
terms, such as collateral security and subordination, which could affect
ultimate payment in the event of default.

Issue credit ratings can be either long term or short term. Short-term
ratings are generally assigned to those obligations considered short-term in
the relevant market. In the U.S., for example, that means obligations with an
original maturity of no more than 365 days, including commercial paper.
Short-term ratings are also used to indicate the creditworthiness of an obligor
with respect to put features on long-term obligations. The result is a dual
rating, in which the short-term rating addresses the put feature, in addition
to the usual long-term rating. Medium-term notes are assigned long-term
ratings.

The ratings and other credit related opinions of Standard & Poor's and its
affiliates are statements of opinion as of the date they are expressed and not
statements of fact or recommendations to purchase, hold, or sell any securities
or make any investment decisions. Standard & Poor's assumes no obligation to
update any information following publication. Users of ratings and credit
related opinions should not rely on them in making any investment decision.
Standard &Poor's opinions and analyses do not address the suitability of any
security. Standard & Poor's Financial Services LLC does not act as a fiduciary
or an investment advisor. While Standard & Poor's has obtained information from
sources it believes to be reliable, Standard & Poor's does not perform an audit
and undertakes no duty of due diligence or independent verification of any
information it receives. Ratings and credit related opinions may be changed,
suspended, or withdrawn at any time.

Long-term issue credit ratings

Issue credit ratings are based, in varying degrees, on the following
considerations:

o Likelihood of payment-capacity and willingness of the obligor to meet
its financial commitment on an obligation in accordance with the terms
of the obligation;

o Nature of and provisions of the obligation;

o Protection afforded by, and relative position of, the obligation in
the event of bankruptcy, reorganization, or other arrangement under
the laws of bankruptcy and other laws affecting creditors' rights.

Issue ratings are an assessment of default risk, but may incorporate an
assessment of relative seniority or ultimate recovery in the event of default.
Junior obligations are typically rated lower than senior obligations, to
reflect the lower priority in bankruptcy, as noted above. (Such differentiation
may apply when an entity has both senior and subordinated obligations, secured
and unsecured obligations, or operating company and holding company
obligations).

AAA An obligation rated "AAA" has the highest rating assigned by Standard
& Poor's. The obligor's capacity to meet its financial commitment on
the obligation is extremely strong.

AA An obligation rated "AA" differs from the highest-rated obligations
only to a small degree. The obligor's capacity to meet its financial
commitment on the obligation is very strong.

A An obligation rated "A" is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than
obligations in higher-rated categories. However, the obligor's
capacity to meet its financial commitment on the obligation is still
strong.

BBB An obligation rated "BBB" exhibits adequate protection parameters.
However, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity of the obligor to meet its
financial commitment on the obligation.

Obligations rated "BB," "B," "CCC," "CC," and "C" are regarded as
having significant speculative characteristics. "BB" indicates the
least degree of speculation and "C" the highest. While such
obligations will likely have some quality and protective
characteristics, these may be outweighed by large uncertainties or
major exposures to adverse conditions.

BB An obligation rated "BB" is less vulnerable to nonpayment than other
speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which
could lead to the obligor's inadequate capacity to meet its financial
commitment on the obligation.

B An obligation rated "B" is more vulnerable to nonpayment than
obligations rated "BB," but the obligor currently has the capacity to
meet its financial commitment on the obligation. Adverse business,
financial, or economic conditions will likely impair the obligor's
capacity or willingness to meet its financial commitment on the
obligation.

CCC An obligation rated "CCC" is currently vulnerable to nonpayment, and
is dependent upon favorable business, financial, and economic
conditions for the obligor to meet its financial commitment on the
obligation. In the event of adverse business, financial, or economic
conditions, the obligor is not likely to have the capacity to meet its
financial commitment on the obligation.

CC An obligation rated "CC" is currently highly vulnerable to nonpayment.

C A "C" rating is assigned to obligations that are CURRENTLY HIGHLY
VULNERABLE to nonpayment, obligations that have payment arrearages
allowed by the terms of the documents, or obligations of an issuer
that is the subject of a bankruptcy petition or similar action which
have not experienced a payment default. Among others, the 'C' rating
may be assigned to subordinated debt, preferred stock or other
obligations on which cash payments have been suspended in accordance
with the instrument's terms or when preferred stock is the subject of
a

distressed exchange offer, whereby some or all of the issue is either
repurchased for an amount of cash or replaced by other instruments
having a total value that is less than par.

D An obligation rated "D" is in payment default. The "D" rating category
is used when payments on an obligation are not made on the date due
even if the applicable grace period has not expired, unless Standard &
Poor's believes that such payments will be made during such grace
period. The "D" rating also will be used upon the filing of a
bankruptcy petition or the taking of a similar action if payments on
an obligation are jeopardized.

Plus (+) or minus (-): The ratings from "AA" to "CCC" may be modified by
the addition of a plus or minus sign to show relative standing within the major
rating categories.

NR This indicates that no rating has been requested, that there is
insufficient information on which to base a rating, or that Standard &
Poor's does not rate a particular obligation as a matter of policy.

Moody's Ratings

Long-term obligation ratings

Moody's long-term obligation ratings are opinions of the relative credit
risk of fixed-income obligations with an original maturity of one year or more.
They address the possibility that a financial obligation will not be honored as
promised. Such ratings reflect both the likelihood of default and any financial
loss suffered in the event of default.

Aaa Obligations rated Aaa are judged to be of the highest quality, with
minimal credit risk.

Aa Obligations rated Aa are judged to be of high quality and are subject
to very low credit risk.

A Obligations rated A are considered upper-medium grade and are subject
to low credit risk.

Baa Obligations rated Baa are subject to moderate credit risk. They are
considered medium-grade and as such may possess certain speculative
characteristics.

Ba Obligations rated Ba are judged to have speculative elements and are
subject to substantial credit risk.

B Obligations rated B are considered speculative and are subject to high
credit risk.

Caa Obligations rated Caa are judged to be of poor standing and are
subject to very high credit risk.

Ca Obligations rated Ca are highly speculative and are likely in, or very
near, default, with some prospect of recovery of principal and
interest.

C Obligations rated C are the lowest rated class of bonds and are
typically in default, with little prospect for recovery of principal
or interest.

Note: Moody's appends numerical modifiers 1, 2, and 3 to each generic
rating classification from Aa through Caa. The modifier 1 indicates that the
obligation ranks in the higher end of its generic rating category; the modifier
2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the
lower end of that generic rating category.

NR Not Rated. The symbol NR is assigned to unrated obligations, issuers
and/or programs.

WR Withdrawn. When Moody's no longer rates an obligation on which it
previously maintained a rating, the symbol WR is employed.

CLAYMORE SECURITIES DEFINED PORTFOLIOS

CLAYMORE INDEX PORTFOLIO PROSPECTUS-PART B

JUNE 15, 2010

Where to Learn More
You can contact us for free information about this and other investments.

Visit us on the Internet
http://www.claymore.com

By e-mail
invest@claymore.com

Call Claymore
(800) 345-7999

Pricing Line (888) 248-4954

Call The Bank of New York Mellon
(800) 701-8178 (investors)
(800) 647-3383 (brokers)

Additional Information
This prospectus does not contain all information filed with the Securities and
Exchange Commission.
To obtain a copy of this information (a duplication fee may be required):

E mail: publicinfo@sec.gov
Write: Public Reference Room
Washington, D.C. 20549-0102
Visit: http://www.sec.gov (EDGAR Database)
Call: 1-202-942-8090 (only for information on the operation of the Public
Reference Room)

When units of the trusts are no longer available, we may use this
prospectus as a preliminary prospectus for a future trust. In this case you
should note that:

The information in this prospectus is not complete with respect to future
trusts and may be changed. No one may sell units of a future trust until a
registration statement is filed with the Securities and Exchange Commission and
is effective. This prospectus is not an offer to sell units and is not
soliciting an offer to buy units in any state where the offer or sale is not
permitted.

Contents Investment Summary
- ------------------------------------------------------------------------------
2 Overview

Guggenheim Moderate Asset Allocation Portfolio of ETFs, Series 3
- ------------------------------------------------------------------------------
A concise 2 Investment Objective
description 2 Principal Investment Strategy
of essential 2 Security Selection
information 3 Exchange-Traded Funds
about the 3 Future Trusts
portfolio 3 Essential Information
3 Portfolio Diversification
4 Principal Risks
6 Who Should Invest
6 Fees and Expenses
7 Example
8 Trust Portfolio

Guggenheim Growth Asset Allocation Portfolio of ETFs, Series 3
- ------------------------------------------------------------------------------
A concise 9 Investment Objective
description 9 Principal Investment Strategy
of essential 9 Security Selection
information 10 Exchange-Traded Funds
about the 10 Future Trusts
portfolio 10 Essential Information
10 Portfolio Diversification
10 Principal Risks
13 Who Should Invest
13 Fees and Expenses
14 Example
15 Trust Portfolio

Understanding Your Investments
- ------------------------------------------------------------------------------
Detailed 16 How to Buy Units
information 20 How to Sell Your Units
to help you 21 Distributions
understand 22 Investment Risks
your 25 How the Trust Works
investment 27 General Information
27 Expenses
29 Report of Independent Registered Public
Accounting Firm
30 Statements of Financial Condition

For the Table of Contents of Part B, See Part B of the prospectus.

Where to Learn More
- ------------------------------------------------------------------------------
You can contact us for Visit us on the Internet
free information about http://www.claymore.com
these investments. By e-mail
invest@claymore.com
Call Claymore (800) 345-7999
Pricing Line (888) 248-4954
Call The Bank of New York Mellon
(800) 701-8178 (investors) / (800) 647-3383 (brokers)

Additional Information
- ------------------------------------------------------------------------------
This prospectus does not contain all information filed with the Securities and
Exchange Commission. To obtain or copy this information (a duplication fee may
be required):

E-mail: publicinfo@sec.gov
Write: Public Reference Room, Washington, D.C. 20549-0102
Visit: http://www.sec.gov (EDGAR Database)
Call: 1-202-942-8090 (only for information on
the operation of the Public Reference Room)

Refer to:
Claymore Securities Defined Portfolios, Series 688
Securities Act file number: 333-166339
Investment Company Act file number: 811-03763

When units of the trusts are no longer available, we may use this prospectus as
a preliminary prospectus for future trusts. In this case you should note that:

CLAYMORE LOGO

GUGGENHEIM LOGO

PROSPECTUS

Guggenheim Moderate Asset
Allocation Portfolio of ETFs,
Series 3

Guggenheim Growth Asset
Allocation Portfolio of ETFs,
Series 3

Claymore Securities
Defined Portfolios
Series 688

DATED JUNE 15, 2010

CONTENTS OF REGISTRATION STATEMENT

A. Bonding Arrangements of Depositor:

The Depositor has obtained the following Securities Dealer Blanket Bond for
its officers, directors and employees:

INSURER/POLICY NO. AMOUNT

National Union Fire Insurance
Company of Pittsburgh, $4,000,000
Pennsylvania
5692790

B. This amendment to the Registration Statement comprises the following
papers and documents:

The facing sheet

The Prospectus

The signatures

Consents of Independent Auditors
and Counsel as indicated

Exhibits as listed on page S-5

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Claymore Securities Defined Portfolios, Series 688 has duly caused this
Amendment to the Registration Statement to be signed on its behalf by the
undersigned thereunto duly authorized in the City of Lisle and State of Illinois
on the 15th day of June, 2010.

CLAYMORE SECURITIES DEFINED PORTFOLIOS, SERIES 688
(Registrant)

By CLAYMORE SECURITIES, INC.
(Depositor)

By /s/ Kevin Robinson
------------------
Senior Managing Director,
General Counsel and Secretary

Pursuant to the requirements of the Securities Act of 1933, this Amendment to
the Registration Statement has been signed below by the following persons in the
capacities and on the date indicated:

SIGNATURE* TITLE** DATE

) By: /s/ Kevin Robinson
--------------
) Kevin Robinson
) Attorney-in-Fact*
)
DAVID HOOTEN* Chief Executive Officer and ) June 15, 2010
Chairman of the Board of )
Directors )

MICHAEL RIGERT* Vice Chairman ) June 15, 2010

ANTHONY DILEONARDI* Vice Chairman ) June 15, 2010

BRUCE ALBELDA* Chief Financial Officer and June 15, 2010
Director
/s/ Kevin Robinson
KEVIN ROBINSON Senior Managing Director, June 15, 2010
General Counsel and Secretary

- ------------------
* An executed copy of the related power of attorney was filed as Exhibit 6.0
to Registration Statement No. 333-149523 on April 9, 2008.

** The titles of the persons named herein represent their capacity in and
relationship to Claymore Securities, inc., the Depositor.

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The consent of Grant Thornton LLP to the use of its report and to the reference
to such firm in the Prospectus included in the Registration Statement is filed
by this amendment as Exhibit 4.1 to the Registration Statement.

CONSENT OF CHAPMAN AND CUTLER LLP

The consent of Chapman and Cutler LLP to the use of its name in the Prospectus
included in the Registration Statement is contained in its opinions filed by
this amendment as Exhibits 3.1 and 3.2 to the Registration Statement.

CONSENT OF DORSEY & WHITNEY LLP

The consent of Dorsey & Whitney LLP to the use of its name in the Prospectus
included in the Registration Statement is contained in its opinions filed by
this amendment as Exhibits 3.3 and 3.4 to the Registration Statement.

LIST OF EXHIBITS

1.1 Reference Trust Agreement.

1.1.1 Standard Terms and Conditions of Trust (Reference is made to Exhibit
1.1.1 to Amendment No. 2 to the Registration Statement on Form S-6 for
Claymore Securities Defined Portfolios, Series 116 (File No.
333-72828) filed on December 18, 2001).

2.1 Code of Ethics (Reference is made to Exhibit 2.1 to the Registration
Statement on Form S-6 for Claymore Securities Defined Portfolios,
Series 213 (File No. 333-122184) filed on February 9, 2005).

3.1 Opinion of counsel as to legality of securities being registered
including a consent to the use of its name in the Registration
Statement.

3.2 Opinion of counsel as to Federal income tax status of securities
being registered including a consent to the use of its name in the
Registration Statement.

3.3 Opinion of counsel as to New York income tax status of securities
being registered including a consent to the use of its name in the
Registration Statement.

3.4 Opinion of counsel as to the Trustee and the Trust(s), including a
consent to the use of its name in the Registration Statement.

4.1 Consent of Independent Registered Public Accounting Firm.