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Roles, responsibilities, and risks to consider

Roles of Wells Fargo

As a swap dealer registered with the Commodity Futures Trading Commission (“CFTC”) under the Commodity Exchange Act (“CEA”), Wells Fargo Bank, N.A. (“WFBNA”) offers its swaps, derivatives, and foreign exchange products, services, and transactions solely as principal, and not as an agent, broker, advisor, or fiduciary for its customers, including any such products, services or transactions that may be exempt under the CEA. Any agency, brokerage, advisory, or fiduciary service that WFBNA (or any of its affiliates) may otherwise provide to its customers or to their affiliates does not include swaps, derivatives, or foreign exchange products, services, and transactions unless otherwise expressly agreed in writing signed by Wells Fargo (or the relevant Wells Fargo affiliate), provided that certain brokerage, clearing, funds management, and advisory services may be offered by Wells Fargo Securities, LLC (“WFS”) in its capacity as a futures commission merchant (“FCM”) registered with the CFTC under the CEA.

Responsibilities of the customers

As a swap dealer and principal, WFBNA would be acting at arm’s-length as a party to the contract. As an FCM, WFS would be carrying a cleared swap or other position in its customer’s account. In neither case would WFBNA, WFS, or any of their affiliates be acting as a financial advisor, except as otherwise described above. Therefore, customers are responsible for making their own evaluations of swaps, derivatives, and foreign exchange products, services, and transactions and the risks involved based upon the advice of their own financial, legal, tax, accounting, and other professional advisors. Before entering into such transactions, customers should consider whether they are appropriate for them in light of their individual objectives, experience, and other circumstances.

Risks to consider

While customers can use swaps, derivatives, and foreign exchange transactions as an effective hedging tool to reduce market, credit, or other risks associated with an asset or liability, this presumes holding these hedges to maturity and not disposing of the asset or liability during the term of the hedge. Whether they use them for hedging or another purpose, customers should satisfy themselves that they sufficiently understand the risks, including (without limitation) the risk of loss in the event of early termination or modification of the transaction, the risk associated with an early repayment or other disposition of the underlying asset or liability prior to the transaction’s maturity, the risk of acquiring a transaction in anticipation of hedging an asset or liability that does not materialize, and the risk that in hindsight it could prove to have been better not to have hedged. Losses and costs could be substantial.

Before entering into any swaps, derivatives, or foreign exchange transactions, customers should carefully read and fully understand all relevant information and disclosures furnished or made available to them by their swap dealer (including WFBNA) or other counterparty, swap execution facility, FCM (including WFS), clearinghouse or otherwise. These include, without limitation, the general and relevant product-specific disclosure documents concerning swap transactions prepared by the International Swaps and Derivatives Association (“ISDA”), which are available at http://www2.isda.org/functional-areas/legal-and-documentation/disclosures. Transactions described on this website are not bank deposits or FDIC insured, will expose customers to the credit risk of Wells Fargo, and therefore involve risk of loss to you apart from the market risk associated with the underlying rate, price, or other economic measure on which the transaction is based. Financial information concerning Wells Fargo Bank, N.A. is available at: https://www.wellsfargo.com/about/investor-relations/.

Independent obligations

To the extent any swap, derivative, or foreign exchange transaction is acquired to hedge against interest rate risk, foreign currency risk, commodity price risk, credit risk, or other risks associated with an asset or liability, including a loan or other financing, such transaction would be a separate and independent obligation and would not be contingent on whether or not any such asset or liability is acquired or incurred, or such loan or other financing closes, is outstanding or is repaid, in whole or in part, at any time, subject to any contractual requirement to terminate and settle the transaction early upon any disposition of such asset or liability, including upon the prepayment of such loan or financing, or for other loan-related or financing-related events.

Informational purposes only

All information, materials, and other content on this website are for general information purposes only, and do not constitute any offer, solicitation, recommendation, commitment, or investment advice of any kind. All terms, prices, and descriptions are for illustration purposes only. Actual prices would be subject to market conditions at deal time, final credit approval, and agreement on deal terms. Nothing on this website is meant to summarize all the terms and conditions that would be contained in definitive legal documentation. Although WFBNA may maintain one or more other websites for the purpose of disclosing the risks of swaps, derivatives, and foreign exchange products, services and transactions, this website is not intended for such purpose.

The information, materials, and other content on this website are meant for institutional, commercial, and sophisticated, high net worth customers. Except for certain foreign currency related products and services available to its retail customers, Wells Fargo does not offer swaps, derivatives, and foreign exchange products, services and transactions to the general public, as such transactions are generally restricted to “eligible contract participants” under and as defined in the CEA and CFTC regulations, and other legal requirements and restrictions apply. Customers should ensure, as with any financial transaction, that they comply with all legal, contractual, and other requirements and restrictions, including any investment or hedging limitations, that may be applicable to their swap, derivatives, and foreign exchange activities, whether established by law, contract, their own governing body, or otherwise.

Onboarding, documentation, and other prerequisites

Customers interested in acquiring any swap, derivative, or foreign exchange product, service, or transaction with Wells Fargo should take into account that there are several steps to complete before an offer can be made or accepted, including: credit approval; background checks and other due diligence; customer suitability; onboarding documentation; swap trading relationship documentation; clearing exemption documentation; account documentation, including online system access; tax forms; and margining, collateral or other credit support arrangements. The foregoing is not a complete list, and requirements may vary by customer or customer type, jurisdiction, trading style (e.g., cleared versus non-cleared), type of product, service, or transaction, and other considerations deemed relevant by Wells Fargo, including satisfaction of all legal, regulatory, and other requirements, including Wells Fargo’s policies and procedures.

Under no circumstances shall Wells Fargo be responsible for any losses, costs, or expenses incurred by any customer as the result of any delay in completing, or failure to complete any such steps, or for Wells Fargo or any other person or entity declining to offer, accept, or approve any swap, derivative, or foreign exchange product, service or transaction, for any reason or no reason.

Applicability of certain regulations

Unless otherwise indicated or agreed, swaps are offered by WFBNA, a swap dealer registered with the CFTC and member of the National Futures Association ("NFA"). As used herein, the term “swap” also includes “foreign exchange forwards” and “foreign exchange swaps” which, although exempted from regulation as “swaps” under the CEA to the extent provided in CEA §1a(47)(E), are subject to certain requirements of the CEA and the CFTC, including business conduct and swap trading relationship documentation requirements.

Not a municipal advisor

Wells Fargo Bank, N.A. is not acting as a municipal advisor and the information presented to any customer is not intended to be, and does not constitute, advice within the meaning of Section 975 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Wells Fargo Securities

Wells Fargo Securities is the trade name for the capital markets and investment banking services of Wells Fargo & Company and its subsidiaries, including but not limited to Wells Fargo Securities, LLC, a member of NYSE, FINRA, NFA and SIPC, Wells Fargo Prime Services, LLC, a member of FINRA, NFA and SIPC, and Wells Fargo Bank, N.A. Wells Fargo Securities, LLC, and Wells Fargo Prime Services, LLC, are distinct entities from affiliated banks and thrifts.

Wells Fargo legal entity varies by product or service

Unless otherwise expressly indicated in offering materials or a written agreement, the following products and services are offered by the respective Wells Fargo legal entity shown below. Each legal entity is only responsible for its obligations and there is no guaranty for another legal entity’s obligations.

Interest rate products, foreign exchange products, and commodity price products are generally offered by Wells Fargo Bank, N.A.

Physical commodity transactions are generally offered by Wells Fargo Commodities, LLC.

Equity products and credit protection products are generally offered by Wells Fargo Bank, N.A. or Wells Fargo Securities, LLC.

Clearing services are provided and carried by Wells Fargo Securities, LLC for its own customer accounts.

Reservation of rights

Wells Fargo reserves all rights with respect to the information, materials, and other content on this website. This content may not be copied, disseminated, reproduced, or used without the prior written consent of Wells Fargo (or when Wells Fargo, with permission, has included copyrighted content belonging to others, without their prior written consent). Wells Fargo does not guarantee the accuracy or completeness of any content on this website, nor does Wells Fargo assume any liability for any loss resulting from reliance thereon. Such content is subject to change without notice.