This is a conflict of interest because, like other depository institutions, their profitability is determined in large part by the difference between the interest paid and other costs incurred by them on bank deposits and the interest or other income earned on their loans, investments and other assets, which may be funded in part by bank deposits. The participating Merrill Affiliated Banks use bank deposits to fund current and new lending, investment and other business activities. The Merrill Affiliated Banks benefit from their use of the deposits, and Merrill receives compensation from the Merrill Affiliated Banks for its services relating to the cash sweep program. If a client holds cash balances in their account, both the Merrill Affiliated Banks and Merrill benefit financially when the cash is “swept” to and held in deposit with them under our cash sweep program. There are conflicts of interest relating to the Merrill Lynch Bank Deposit Program. When cash is needed for various transactions, such as the purchase of securities, available funds on deposit are automatically used to satisfy those needs. With the Merrill Lynch Bank Deposit Program, you can take advantage of an automatic cash sweep feature and daily liquidity.
0 Comments
Leave a Reply. |