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An Important Message from Morgan Keegan

How your Morgan Keegan Brokerage Accounts Are Protected

(updated 10/15/2008)

Securities Investor Protection Corporation (SIPC)

Morgan Keegan brokerage accounts are protected by the Securities Investor Protection Corporation (SIPC), a member-supported organization created by Congress in 1970 to provide certain financial protection to clients should a brokerage firm become insolvent. Additionally, Morgan Keegan has for many years purchased supplemental protection, significantly raising the level of coverage for our clients.

Understanding the Role of SIPC

SIPC is your first line of defense in the event of a brokerage firm failure. No fewer than 99% of eligible investors get their investments back from SIPC. When a brokerage firm is closed due to bankruptcy or other financial difficulties, the Securities Investor Protection Corporation steps in as quickly as possible and, within certain limits, works to return to you cash, stock and other securities you had at the firm.

You should also understand that SIPC is not the FDIC. The Securities Investor Protection Corporation does not offer to investors the same blanket protection that the Federal Deposit Insurance Corporation provides to bank depositors. SIPC helps individuals whose money, stocks and other securities are put at risk when a brokerage firm fails for any reason. Morgan Keegan does offer investors an FDIC-insured deposit account option that is described further in the section titled “FDIC-Insured Deposit Account”.

What SIPC Covers and What It Does Not

The cash and securities – including stocks, bonds, notes, CDs, and money market funds – held in your accounts at Morgan Keegan are protected by SIPC up to stated limitations ($500,000 maximum per eligible client, of which $100,000 may be cash).

SIPC coverage does not protect against losses from market fluctuations in portfolio value. Certain investments are ineligible for SIPC protection, such as commodity and futures contracts, as well as investment contracts (such as limited partnerships) and fixed annuity contracts that are not registered with the U.S. Securities and Exchange Commission under the Securities Act of 1933.

More detailed information about the Securities Investor Protection Corporation is available online at www.sipc.org, or you may request a SIPC brochure from your Morgan Keegan financial advisor.

Morgan Keegan Provided Protections

Net Capital Requirements

Under direction of the U.S. Securities and Exchange Commission, all registered broker-dealers are required to maintain net capital to provide financial resources so that customers will get their cash and securities back in the event the firm fails. According to the SEC, brokerage firm customers’ claims for their funds and securities are senior to other claims on the broker-dealer.

Segregation of Assets

In addition to the protections provided by SIPC and the SEC’s net capital rule, the SEC requires registered broker-dealers to place client assets into accounts that are segregated from the broker-dealer’s own proprietary funds and securities. Additionally, the segregated assets are held in distinct accounts that prevent comingling of client assets with assets of the broker-dealer. As a result, clients are protected from potential trading losses that the firm may incur. These rules insure that there is no question of ownership of assets being held by the brokerage firm on behalf of their clients.

Supplemental Protection Provided by Morgan Keegan

Since 2006, Morgan Keegan has provided supplemental coverage in excess of SIPC coverage obtained through Lloyd’s of London, the second largest surplus line insurer in the U.S. The per account limitation of this coverage is $124,500,000 for all Morgan Keegan accounts, subject to an overall aggregate loss limit of $400 million.

The supplemental coverage follows the same guidelines which apply for the SIPC coverage as outlined above, and is provided at no cost to you. In the unlikely event that client assets are not fully recovered and SIPC protection limits have been paid, the supplemental protection takes effect. If you maintain more than one account with Morgan Keegan in separate capacities (i.e. individually, jointly, as a trustee), each account is protected by SIPC and the excess coverage up to the client and aggregate limits set forth.