Schwab Endorses Industry-Changing Service for Alternative Investments

Schwab calls on issuers of alternative investments to participate in Alternative Investment Products (AIP) service; plans April webcast for independent investment advisors

Tuesday, March 6, 2012 1:30 pm PST

Dateline:

SAN FRANCISCO

Public Company Information:

NYSE:
SCHW
"AIP is designed to provide the alternative investment industry with the same type of efficiency and scalability that exists in the mutual fund industry"

SAN FRANCISCO--(BUSINESS WIRE)--Following a recent No-Action letter obtained from the Securities and Exchange Commission (SEC), Charles Schwab today announced its support for The Depository Trust & Clearing Corporation’s (DTCC’s) Alternative Investment Products service (AIP) as a means to facilitate the custody of alternative investments. AIP is a service offering of National Securities Clearing Corporation (NSCC), a subsidiary of DTCC. The letter Schwab obtained from the SEC confirmed that broker-dealers can rely on AIP to establish compliance with a broker’s possession and control requirements.

“Alternative investments are an increasingly important asset class for the industry, including many of the 7,000 independent investment advisor firms that we serve at Schwab,” said Bernie Clark, executive vice president of Charles Schwab & Co., Inc and leader of the Schwab Advisor Services division. “We have been advocating for an industry-wide solution to create greater standardization in trading and custody. We believe that AIP has the potential to transform the industry’s approach to alternative investments.”

AIP is a data transmission platform that links administrators, broker/dealers, custodians, and issuers of alternative investments to provide streamlined processing of pooled investments like hedge funds, funds-of-funds, REITs, and limited partnerships. By automating this process, AIP can reduce errors, lower costs, and reduce the time it takes to process account information, which benefits advisors, investors, issuers, and custodians like Schwab.

“AIP is designed to provide the alternative investment industry with the same type of efficiency and scalability that exists in the mutual fund industry,” said Clark. “But success requires participation by alternative investment issuers. We have been working to drive issuer adoption of AIP, and we’ll be stepping up those efforts in the coming weeks and months.”

In order to educate independent investment advisors about AIP and how it will impact Schwab’s custody of alternative assets, the firm is hosting an educational webcast in April with representatives of Schwab and DTCC. More information about the webcast will be available in the coming weeks.

About Charles Schwab

The Charles Schwab Corporation (NYSE:SCHW) is a leading provider of financial services, with more than 300 offices and 8.6 million client brokerage accounts, 1.5 million corporate retirement plan participants, 787,000 banking accounts, and $1.74 trillion in client assets as of Jan. 31, 2012. Through its operating subsidiaries, the company provides a full range of securities brokerage, banking, money management and financial advisory services to individual investors and independent investment advisors. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC, www.sipc.org), and affiliates offer a complete range of investment services and products including an extensive selection of mutual funds; financial planning and investment advice; retirement plan and equity compensation plan services; referrals to independent fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through its Advisor Services division. Its banking subsidiary, Charles Schwab Bank (member FDIC and an Equal Housing Lender), provides trust and custody services, banking and mortgage services and products. More information is available at www.schwab.com and www.aboutschwab.com. (0312-1641)

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Contact:

Charles Schwab
Lindsay Tiles, 415-667-0479
lindsay.tiles@schwab.com

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