Prices and Commissions

When executing a transaction for a customer as its agent, a broker-dealer must make reasonable efforts to obtain a fair price for the security. Likewise, broker-dealers acting as principal must execute their purchases and sales at fair and reasonable prices. A fair and reasonable price bears a reasonable relationship to the prevailing market price of the security, which the broker-dealer must make a diligent effort to establish. Most importantly, yield should be comparable to the yield of other securities of comparable quality, maturity, coupon rate, and block size prevailing in the market. Other relevant factors include:

• • Availability of the securities in the market
• • Rating and call features of the security
• • Expense involved in effecting the transaction
• • Service pr