Brex Cash Disclosures
Revised May 7, 2020
These disclosures provide important information about Brex Cash, a cash sweep program offered by Brex Treasury LLC (Brex Treasury, or we) to select corporate customers. For eligibility information or if you have questions about an account, please contact us.
Table of Contents
Brex Cash offers you the ability to automatically place, or “sweep,” your uninvested corporate cash balances into one or more money market mutual funds (each, a Participating Fund) available through Brex Cash.
Cash balances in your account will be swept to a Participating Fund at or before the close of business each day. The daily sweep to a Participating Fund, and any payments or transfers of funds requiring a redemption of Participating Fund shares from your Brex Cash account, will be subject to applicable cutoff times based on the operating hours of the Participating Fund and our financial services partners. Please contact us for more information.
Cash and money market funds are generally displayed on a settlement date basis. Daily declared dividends are distributed and reinvested monthly. You have the right to instruct us to liquidate your shares of any Participating Fund balance(s) at any time and have the proceeds of such liquidation remitted to you. Your account statement will indicate your balance, detail transactions, and reflect earnings relating to Brex Cash. These account statements are provided in lieu of separate confirmations of sweep transactions.
Brex Cash provides you the opportunity to earn a return on your uninvested cash balance. It should not be viewed as a long-term investment option. If you are interested in a long-term investment option for your cash balances, please consider alternatives other than Brex Cash that may be better suited for such a purpose.
2. Money Market Mutual Funds
A money market mutual fund (money market fund) is a type of mutual fund that is required by law to invest in low-risk securities. Money market funds are considered relatively low-risk investments compared to other mutual funds and pay dividends that generally reflect short-term interest rates. Specifically, a government money market fund is a type of money market fund that is required by law to invest 99.5% of its total assets in cash, government securities, or repos that are fully collateralized. Money market funds seek to achieve a high a level of current income obtainable from investments in short-term securities as is consistent with the preservation of capital and the maintenance of liquidity.
Prior to or at the same time your funds are first swept into a Participating Fund, you will be furnished with the appropriate prospectus. You should read the prospectus carefully and consider the investment objectives, risks, charges, and expenses of each money market fund carefully before investing. You may also contact us to obtain a free prospectus at any time.
You could lose money by investing in a money market fund. Although a money market fund seeks to preserve the value of your investment at $1 per share, it cannot guarantee it will do so. An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC). The money market fund’s sponsor has no legal obligation to provide financial support to the money market fund, and you should not expect that the sponsor will provide financial support to the money market fund at any time. Yields fluctuate and past performance does not guarantee future results or returns.
Money market funds typically bear ongoing fees and expenses to operate their business. These fees can include management fees, 12b‐1 fees, shareholder services fees, and other expenses. These costs are deducted from a fund’s assets, reducing investment returns. Many money market funds pay 12b‐1 fees that compensate third parties for activities such as distribution or shareholder servicing. In addition, Brex Treasury may also provide sub accounting, processing of purchases, statement preparation, tax reporting or marketing services and support to its clients that are invested in the money market funds.
In general, money market funds are offered to meet the liquidity needs of clients, but unlike a “money market” deposit account at a bank, money market funds are not insured or guaranteed by the FDIC, any other government agency, or any bank. In general, money market funds seek to achieve the highest rate of return (less fees and expenses) consistent with prudence and their investment objectives. However, money market funds are securities and as such are subject to investment risk, including loss of principal amount invested. Please see the applicable fund prospectus for information on fund risks, charges, and expenses.
3. Changes to the Program
We may add or delete Participating Funds available through Brex Cash or change the Participating Fund to which your cash balance sweeps at any time by providing 30 days’ notice to you. If we make such a change, there is no guarantee that the change will provide an equal or greater rate of return to you during any given period, and the rate of return could be lower. A list of Participating Funds and other information on Brex Cash are available at brex.com/product/business-cash-account/ or upon request.
4. SIPC Coverage
Brex Treasury is a member of the Securities Investor Protection Corporation (SIPC). Customers are protected up to the applicable SIPC limits if Brex Treasury were to go out of business and there were customer securities or funds unaccounted for. Current SIPC limits are $500,000 for securities and cash per customer, of which up to $250,000 may be in cash (free credit balances). Because money market fund balances are considered securities, they do not count against the $250,000 cash limitation of SIPC coverage on free credit balances. However, SIPC does not provide protection against market losses or the failure of a money market fund. An explanatory brochure is available on request or at www.sipc.org.