MASTERTRADER.COM ANNUAL DISCLOSURE NOTICES

July 2008

Anti-Money Laundering

To help the Government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account. This notice answers questions about your firm’s Customer Identification Program (CIP).

What types of information will I need to provide? When you open an account, your firm is required to collect information such as the following from you: Your name, address, date of birth, Identification number: (a) US Citizen: taxpayer identification number (social security number or employee identification number), or (b) Non- US Citizen: taxpayer identification number, passport number, and country of issuance, alien identification card number, or government- issued identification showing nationality, residence, and a photograph of you. You may also need to show your driver’s license or other identifying documents. A corporation, partnership, trust or other legal entity may need to provide other information such as its principal local office, employer identification number, certified articles of incorporation, government issued business license, a partnership agreement or a trust agreement.

US Department of treasury, Securities and Exchange Commission, FINRA and New York Stock Exchange rules already require you to provide additional information, such as net worth, annual income, occupation, employment information, investment experience and objectives, and risk tolerance.

What happens if I don’t provide the information requested or my identity can’t be verified? Your firm may not be able to open an account or carry out transactions for you. If your firm has already opened an account for you, they may have to close it.

We thank you for your patience and hope that you will support the financial industry’s efforts to deny terrorists and money launders access to America’s financial system.

Business Continuity Plan: FINRA Rule 3510

As a FINRA registered broker/dealer, we have developed a Business Continuity Plan to help ensure we continue to operate when a sudden business disruption occurs. In our capacity as an introducing broker dealer, we provide many products and services to our clients directly or through a third party. We have established a plan that takes into account disruptions that may be local to us, our vendors, and the financial system as a whole due to anything from a natural disaster to a terrorist attack. Our business partners and clearing firm, Penson Financial Services have processes in place that are designed to restore operations within a 24 hour time span. Penson Financial Services provides us with a variety of services that require the provision of continual technological and operational support. In order to accomplish this, our clearing firm has a remotely independent hot disaster recovery site that has resources in place to operate and maintain critical business processes. In the event that Mastertrader, Penson Financial Services, or any one of our other vendors experiences a sudden business disruption we will relay pertinent information to you via email and our web site. Should you have inquires about this plan questions can be directed to Mastertrader.com, Compliance Department, 7-11 South Broadway, Suite 210A, White Plains, NY 10601.

Privacy Policy

Mastertrader.com carries your account as an introducing broker under a fully disclosed clearing arrangement with Penson Financial Services, Inc. At Mastertrader.com, we understand that privacy is an important issue for our customers. It is our policy to respect the privacy of all accounts that we maintain as an introducing broker and to protect the security and confidentiality of nonpublic personal information relating to those accounts. Please note that this policy applies to former customers as well as current customers.

Personal Information Collected
In order to service your account as an introducing broker, we collect information from you in order to provide the financial services that you have requested. The information collected by us and provided to Penson may come from the following sources:

• Information received from you, such as your name, address, telephone number, social security number, occupation, and income.
• Information relating to your transactions, including account balances, positions and activities.
• Information which may be received from consumer reporting agencies, such as credit bureau reports and other information relating to your creditworthiness.
• Information that may be received from other sources with your consent.

Sharing of Nonpublic Personal Information
Mastertrader.com does not disclose nonpublic personal information relating to current or former customers to any third parties, except as required or permitted by law and in order to facilitate the clearing of customer transactions in the ordinary course of business. We may share some personal information from time to time with affiliated companies. You may opt out of this policy by emailing a written request to support@mastertrader.com.

Security
Mastertrader.com strives to ensure that our systems are secure and that they meet industry standards. We protect personal information you provide to us by maintaining physical, electronic, and procedural safeguards that either meet or exceed applicable law. Where appropriate we and our clearing firm, Penson, employ firewalls, encryption technology, user authentication systems (i.e. passwords and personal identification numbers) and access control mechanisms to control access to the systems and data. Third parties who may have access to such personal information must also agree to follow appropriate standards of security and confidentiality.

Mastertrader.com has educated its staff with regard to this privacy policy and as a general policy our staff will not discuss or disclose information regarding an account except with authorized personnel of our clearing firm or as required by law or pursuant to regulatory request and/ or authority.

Changes to Mastertrader.com Privacy Policy
Mastertrader.com reserves the right to make changes to this policy.

How to get in touch with Mastertrader.com about this Privacy Policy
For more information relating to Mastertrader.com’s privacy policy, please contact:

Mastertrader.com Compliance Dept.
7-11 S. Broadway, Suite 210A
White Plains, NY 10601

FINRA Notification

FINRA REQUIRES THAT WE NOTIFY YOU IN WRITING OF THE AVAILABILITY OF AN INVESTOR BROCHURE THAT INCLUDES INFORMATION DESCRIBING FINRA REGULATION'S ('FINRA') PUBLIC DISCLOSURE PROGRAM ('PROGRAM'). TO OBTAIN A BROCHURE OR MORE INFORMATION ABOUT THE PROGRAM OR FINRA, CONTACT THE FINRA PROGRAM HOTLINE AT (800) 289-9999 OR ACCESS THE FINRA WEB SITE AT www.nasdbrokercheck.com FINRA has filed with the SEC a proposed rule change to amend FINRA Rule 2340 to require that account statements include a statement that advises each customer to promptly report any inaccuracy or discrepancy in that person's account to his or her brokerage firm and clearing firm (where these are different firms) and to re-confirm any oral communications in writing.

Futures Accounts

The National Futures Association (NFA) requires that we notify you in writing about NFA's Background Affiliation Status Information Center (BASIC). BASIC contains Commodity Futures Trading Commission (CFTC) registration and NFA membership information and futures-related regulatory and non-regulatory actions contributed by NFA, the CFTC and the U.S. futures exchanges. BASIC can be accessed at the NFA website www.nfa.futures.org or you can contact the NFA at (800) 621-3570 for additional information.

SIPC does not cover commodity contracts and options on futures.

SIPC

Mastertrader clears through Penson Financial Services, Inc. (Penson). Mastertrader.com and Penson are members of the Securities Investor Protection Corporation (SIPC). As a member of the Securities Investor Protection Corporation (SIPC) funds are available to meet customer claims up to a maximum of $500,000 in cash and securities with a $100,000 cash maximum. For details or a brochure, please go to www.sipc.org or contact SIPC at (202) 371-8300.

Additionally, our clearing firm holds Excess SIPC Insurance of $200,000,000 in the aggregate, over all customer accounts, subject to a maximum limit of $900,000 per Customer in respect to cash. This "Excess SIPC" protection is in addition to the protection provided by the Securities and Investors Protection Act, which is administered by SIPC and is subject to certain conditions and limitations, details of which are available upon request. Note SIPC and Excess SIPC provide coverage against loss of securities and cash, not against market depreciation, fluctuation in market value of your securities or a trading loss.

Options Accounts – Supplement to the Options Disclosure Document

On June 26, 2008, the SEC approved a supplement to the Options Disclosure Document
(“ODD”), which provides additional disclosures regarding certain binary options, range
options, and delayed start options. This ODD Supplement supersedes the April 2008
supplement. ALL OPTION ACCOUNT HOLDERS PLEASE READ THE NEW DISCLOSURE ONLINE AT: http://www.optionsclearing.com/publications/risks/riskstoc_jun08_sup.pdf

General Disclosures

The risk of loss in electronic trading can be substantial. Therefore, you should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. System access and trade executions may be delayed or fail due to market volatility, system failure, high volume or other factors.
 
To read other important disclosures please go to the bottom of our web site located at: www.Mastertrader.com and click on the links available.

The risk of loss in electronic trading can be substantial. Therefore, you should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. System access and trade executions may be delayed or fail due to market volatility, system failure, high volume or other factors. To read important disclosures, click on the following four links Day Trading Risk Disclosure, Margin Disclosure, Futures Risk Disclosure and the Characteristics and Risks of Standardized Options.