ABC INVESTMENTS DUE DILIGENCE AND COMPLIANCE REVIEW PROCEDURES THE FOLLOWING COMPLIANCE/VENDOR DUE DILIGENCE PROCEDURES WILL BE FOLLOWED BY UNION, WHEN REVIEWING ABC INVESTMENTS. CREDIT 1) AUDITED FINANCIALS As part of our annual Due Diligence on ABC Investments we will review their audited financials. ABC is registered with the U.S. Securities and Exchange Commission (SEC) and as such file audited financials that can be viewed on their website at www.sec.gov . It is located under Filings / Request Public Documents / SEC Search Feature. To search by company name enter ABC Investments or to search by CIK # use 0000810121. 2) BROKERCHECK As part of our annual Due Diligence on ABC Investments and all Registered Representatives associated with this Financial Institution we will review BrokerCheck. BrokerCheck is the tool to research professional backgrounds of FINRA registered brokerage firms, brokers, investment adviser firms and representatives. The information comes from Central Registration Depository (CRD®), the securities industry online registration and licensing database and the Securities and Exchange Commission’s Investment Adviser Public Disclosure (IAPD) database.To access this information go to Financial Industry Regulatory Authority (FINRA) at www.finra.org. The BrokerCheck link should be on the home page. Follow the steps to look up ABC (CRD #19258) and the Registered Representatives. 3) SIPC MEMBERSHIP As part of our annual Due Diligence on ABC Investments we will review their membership with the Securities Investor Protection Corporation (SIPC). This is done by viewing the SIPC website at www.sipc.org and finding ABC under the member’s area. 4) ANNUAL AUDIT OF REGISTERED REPRESENTATIVES As part of our annual Due Diligence on our Registered Representatives, we will review their audit preformed by ABC. This will be done in a two step process. 1. A designated representative of our financial institution will be present while the compliance portion of ABC’s annual audit is conducted. 2. We will review the finding regarding the audit when they are submitted by ABC to us. 5) DISCLOSURES We understand that we have a responsibility to oversee that all business transacted in financial institutions by the registered representatives is not affiliated with the financial institution. We will make periodic checks to make sure that registered representative is located in a separate area from financial institution business, that proper ABC disclosure signs are displayed and that the client acknowledges at the time of any new purchase that they understand this relationship. 6) QUARTERLY REVIEWS As part of our Due Diligence on our Registered Representatives, we will have a quarterly meeting with them. At these meetings we will discuss and review at the very minimum the following areas: 1. Review of Assets Under Management (AUM) a. Any changes to AUM will be discussed and reviewed. Are there any major changes due to market movement, new assets, lost of assets, etc? b. Review of Commission/Fees c. Overall review of income generated for the quarter and YTD d. Products or Product Types 2. Review and discuss with the representatives about any added, changed or decided to move away from any certain products or product types for any reason. 3. Review of Advisory a. Have any advisory clients been added or deleted in the last quarter? Review of all advisory assets, reviews, statements generated, services offered, etc. ANNUAL CHECKLIST TO REVIEW NON-DEPOSIT INVESTMENT AND INSURANCE PRODUCT ACTIVITIES The following questions can be used to verify that the Credit Union is complying with all applicable rules and guidelines relating to the offer of noninsured investment products and services at the Credit Union: YES 1. Audited Financials – Received and Reviewed? 2. BrokerCheck – Received and Reviewed for: ABC Investments? (individual name) (individual name)? 3. Confirmation of SIPC Membership – Received and Reviewed? 4. Audit of Registered Representatives – Received and Reviewed? Is the ABC sales area clearly distinct from retail deposit areas? Are adequate customer disclosures being given? Have sales confirmations and account statements been reviewed? Has all advertising and promotional materials used in connection with ABC services and products been reviewed? Has all advertising contained adequate disclosures indicating the the products are being offered by ABC and are not insured and may result in loss? 5. Have all complaints been handled and/or resolved adequately? 6. Are the activities being performed in accordance with Board policy? NO QUARTERLY MEETING AGENDA TO REVIEW NON-DEPOSIT INVESTMENT AND INSURANCE PRODUCT ACTIVITIES The following agenda will be used for quarterly meetings between our Registered Representatives and CREDIT UNION: 1. Review of Assets Under Management (AUM) e. Any changes to AUM will be discussed and reviewed. Are there any major changes due to market movement, new assets, lost of assets, etc? f. Review of Commission/Fees g. Overall review of income generated for the quarter and YTD h. Products or Product Types 2. Review and discuss with the representatives about any added, changed or decided to move away from any certain products or product types for any reason. 3. Review of Advisory b. Have any advisory clients been added or deleted in the last quarter? Review of all advisory assets, reviews, statements generated, services offered, etc.