Appendix 3 U.S. BROKER-DEALER, U.S. FUTURES COMMISSION MERCHANT, or U.S. BANK: This Appendix describes the Re-use Risks and Consequences that may arise under Collateral Arrangements with a bank chartered under U.S. federal or state law, a U.S. branch or agency office of a non-U.S. bank (any such bank, branch, or agency office, a "U.S. banking organization"), a U.S. entity that is registered as a broker-dealer with the U.S. Securities and Exchange Commission ("broker- dealer), or a U.S. entity that is registered as a futures commission merchant with the Commodity Futures Trading Commission ("FCM'). A single U.S. entity can operate, and be regulated, as both a broker-dealer and an FCM, but it remains subject to separate regulatory requirements with respect to its separate activities. U.S. law draws a distinction between financial instruments delivered to a broker-dealer or FCM and treated as customer assets ("Customer Assets"), financial instruments held by a U.S. banking organization in a trust or custodial capacity ("Custodial Assets"), and financial instruments delivered or pledged to a U.S. banking organization, broker-dealer, or FCM in a principal (non-customer) capacity ("Non-Customer Assets"). Customer Assets held by a broker-dealer or FCM are subject to mandatory segregation requirements under the rules of the SEC and CFTC, respectively, and special-purpose insolvency regimes under which segregated assets, i.e., Customer Assets and cash required to be held in segregated accounts, are distributed to customers. Custodial Assets held by a U.S. banking organization are generally segregated on an account- or customer-specific basis, while in some circumstances broker-dealers and FCMs are permitted to segregate Customer Assets on an omnibus basis for all customers. Financial instruments held in a securities account at a broker-dealer or delivered to an FCM as margin (or "performance bond") for a cleared derivative generally constitute Customer