TD AMERITRADE HOLDING CORP (Form: 10-Q, Received: 02/06/2013 16:08:57)

Large accelerated filer

Accelerated filer

Non-accelerated filer

¨ (Do not check if a smaller reporting company)

Smaller reporting company

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the quarterly period ended December 31, 2012

¨	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the transition period from to

Commission file number: 1-35509

TD Ameritrade Holding Corporation

(Exact name of registrant as specified in its charter)

Delaware

82-0543156

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

4211 South 102 ^nd Street, Omaha, Nebraska, 68127

(Address of principal executive offices) (Zip Code)

(402) 331-7856

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months. Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of January 30, 2013, there were 549,106,521 outstanding shares of the registrant’s common stock.

TD AMERITRADE HOLDING CORPORATION

INDEX


		Page No.
	PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements
	Report of Independent Registered Public Accounting Firm		3
	Condensed Consolidated Balance Sheets		4
	Condensed Consolidated Statements of Income		5
	Condensed Consolidated Statements of Comprehensive Income		6
	Condensed Consolidated Statements of Cash Flows		7
	Notes to Condensed Consolidated Financial Statements		9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		26

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		39

Item 4.	Controls and Procedures		40

	PART II - OTHER INFORMATION

Item 1.	Legal Proceedings		40

Item 1A.	Risk Factors		41

Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities		42

Item 6.	Exhibits		42

	Signatures		44

PART I - FINANCIAL INFORMATION

Item 1. – Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors

TD Ameritrade Holding Corporation

We have reviewed the condensed consolidated balance sheet of TD Ameritrade Holding Corporation and subsidiaries (the Company) as of December 31, 2012, and the related condensed consolidated statements of income, comprehensive income and cash flows for the three-month periods ended December 31, 2012 and 2011. These financial statements are the responsibility of the Company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of TD Ameritrade Holding Corporation and subsidiaries as of September 30, 2012, and the related consolidated statements of income, stockholders’ equity, and cash flows for the year then ended (not presented herein) and in our report dated November 26, 2012, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of September 30, 2012, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ ERNST & YOUNG LLP

Chicago, Illinois

February 6, 2013

TD AMERITRADE HOLDING CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


	December 31,			September 30,
	2012			2012
	(In millions)
ASSETS
Cash and cash equivalents	$	1,852		$	915
Short-term investments		4			154
Cash and investments segregated and on deposit for regulatory purposes		4,682			4,030
Receivable from brokers, dealers and clearing organizations		948			1,110
Receivable from clients, net		8,799			8,647
Receivable from affiliates		180			85
Other receivables, net		110			118
Securities owned, at fair value		311			343
Investments available-for-sale, at fair value		91			70
Property and equipment at cost, net		469			444
Goodwill		2,467			2,467
Acquired intangible assets, net		909			932
Deferred income taxes		2			2
Other assets		194			196

Total assets	$	21,018		$	19,513

LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Payable to brokers, dealers and clearing organizations	$	1,941		$	1,992
Payable to clients		12,459			10,728
Accounts payable and accrued liabilities		564			632
Payable to affiliates		5			4
Notes payable		275			—
Deferred revenue		23			28
Long-term debt		1,087			1,345
Capitalized lease obligations		4			5
Deferred income taxes		382			354

Total liabilities		16,740			15,088

Stockholders’ equity:
Preferred stock, $0.01 par value; 100 million shares authorized, none issued		—			—
Common stock, $0.01 par value; one billion shares authorized; 631 million shares issued; December 31, 2012 - 547 million shares outstanding; September 30, 2012 - 545 million shares outstanding		6			6
Additional paid-in capital		1,581			1,587
Retained earnings		3,924			4,100
Treasury stock, common, at cost: December 31, 2012 - 84 million shares; September 30, 2012 - 86 million shares		(1,264	)		(1,286	)
Net unrealized gain on investments available-for-sale		31			18

Total stockholders’ equity		4,278			4,425

Total liabilities and stockholders’ equity	$	21,018		$	19,513

See notes to condensed consolidated financial statements.

TD AMERITRADE HOLDING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	Three Months Ended December 31,
	2012			2011
	(In millions, except per share amounts)
Revenues:
Transaction-based revenues:
Commissions and transaction fees	$	257		$	273

Asset-based revenues:
Interest revenue		118			111
Brokerage interest expense		(2	)		(2	)

Net interest revenue		116			109

Insured deposit account fees		205			205
Investment product fees		56			44

Total asset-based revenues		377			358

Other revenues		17			22

Net revenues		651			653


Operating expenses:
Employee compensation and benefits		168			173
Clearing and execution costs		24			20
Communications		28			28
Occupancy and equipment costs		39			38
Depreciation and amortization		20			17
Amortization of acquired intangible assets		23			23
Professional services		34			45
Advertising		52			57
Other		22			24

Total operating expenses		410			425


Operating income		241			228

Other expense (income):
Interest on borrowings		6			7
Gain on sale of investments		(2	)		—

Total other expense (income)		4			7


Pre-tax income		237			221

Provision for income taxes		90			69


Net income	$	147		$	152


Earnings per share - basic	$	0.27		$	0.28
Earnings per share - diluted	$	0.27		$	0.27

Weighted average shares outstanding - basic		546			550
Weighted average shares outstanding - diluted		551			555

Dividends declared per share	$	0.59		$	0.06

See notes to condensed consolidated financial statements.

TD AMERITRADE HOLDING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended December 31,
	2012			2011
	(In millions)
Net income	$	147		$	152

Other comprehensive income:
Change in net unrealized gain on investments available-for-sale:
Net unrealized gain		21			—
Income tax effect		(8	)		—


Total other comprehensive income		13			—


Comprehensive income	$	160		$	152

See notes to condensed consolidated financial statements.

TD AMERITRADE HOLDING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Three Months Ended December 31,
	2012			2011
	(In millions)
Cash flows from operating activities:
Net income	$	147		$	152
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		20			17
Amortization of acquired intangible assets		23			23
Deferred income taxes		20			15
Gain on sale of investments		(2	)		—
Stock-based compensation		7			10
Excess tax benefits on stock-based compensation		(7	)		(8	)
Other, net		1			(1	)
Changes in operating assets and liabilities:
Cash and investments segregated and on deposit for regulatory purposes		(652	)		(3,551	)
Receivable from brokers, dealers and clearing organizations		162			6
Receivable from clients, net		(151	)		393
Receivable from/payable to affiliates, net		(94	)		(9	)
Other receivables, net		8			12
Securities owned		32			71
Other assets		(7	)		(4	)
Payable to brokers, dealers and clearing organizations		(51	)		(110	)
Payable to clients		1,731			3,103
Accounts payable and accrued liabilities		(63	)		(60	)
Deferred revenue		(4	)		(3	)


Net cash provided by operating activities		1,120			56


Cash flows from investing activities:
Purchase of property and equipment		(46	)		(28	)
Proceeds from sale and maturity of short-term investments		150			—
Proceeds from sale of investments		3			—


Net cash provided by (used in) investing activities		107			(28	)

See notes to condensed consolidated financial statements.

TD AMERITRADE HOLDING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS – (Continued)

(Unaudited)


	Three Months Ended December 31,
	2012			2011
	(In millions)
Cash flows from financing activities:
Principal payments on long-term debt	$	(250	)	$	—
Proceeds from notes payable		275			—
Payment of cash dividends		(323	)		(33	)
Proceeds from exercise of stock options; Three months ended December 31, 2012 - 1.5 million shares; 2011 - 0.1 million shares		6			—
Purchase of treasury stock; Three months ended December 31, 2012 - 0.2 million shares; 2011 - 7.2 million shares		(4	)		(115	)
Principal payments on capital lease obligations		(1	)		(2	)
Excess tax benefits on stock-based compensation		7			8


Net cash used in financing activities		(290	)		(142	)


Net increase (decrease) in cash and cash equivalents		937			(114	)

Cash and cash equivalents at beginning of period		915			1,032

Cash and cash equivalents at end of period	$	1,852		$	918


Supplemental cash flow information:
Interest paid	$	8		$	8
Income taxes paid	$	100		$	99

See notes to condensed consolidated financial statements.

TD AMERITRADE HOLDING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three-Month Periods Ended December 31, 2012 and 2011

(Unaudited)

1. BASIS OF PRESENTATION

The condensed consolidated financial statements include the accounts of TD Ameritrade Holding Corporation and its wholly-owned subsidiaries (collectively, the “Company”). Intercompany balances and transactions have been eliminated.

These financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and, in the opinion of management, reflect all adjustments, which are all of a normal recurring nature, necessary to present fairly the financial position, results of operations and cash flows for the periods presented in conformity with U.S. generally accepted accounting principles. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s annual report filed on Form 10-K for the fiscal year ended September 30, 2012.

Recently Adopted Accounting Pronouncements

ASU 2011-05 — On October 1, 2012, the Company adopted Accounting Standards Update (“ASU”) 2011-05, Presentation of Comprehensive Income . ASU 2011-05 eliminates the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity and allows two options for presenting the components of net income and other comprehensive income: (1) in a single continuous statement of comprehensive income or (2) in two separate but consecutive statements, consisting of a statement of net income followed by a separate statement of other comprehensive income. The Company selected the second option for adoption of ASU 2011-05. The adoption of ASU 2011-05 resulted only in changes to the manner in which components of other comprehensive income are presented in the Company’s condensed consolidated financial statements.

2. CASH AND CASH EQUIVALENTS

The Company’s cash and cash equivalents is summarized in the following table (dollars in millions):


	December 31,		September 30,
	2012		2012
Corporate	$	440	$	403
Broker-dealer subsidiaries		841		406
Trust company subsidiary		556		95
Investment advisory subsidiaries		15		11

Total	$	1,852	$	915

Capital requirements may limit the amount of cash available for dividend from the broker-dealer and trust company subsidiaries to the parent company. Most of the trust company cash and cash equivalents arises from client transactions in the process of settlement, and therefore is generally not available for corporate purposes. Cash and cash equivalents of the investment advisory subsidiaries is generally not available for corporate purposes.

3. CASH AND INVESTMENTS SEGREGATED AND ON DEPOSIT FOR REGULATORY PURPOSES

Cash and investments segregated and on deposit for regulatory purposes consists of the following (dollars in millions):


	December 31,		September 30,
	2012		2012
Reverse repurchase agreements	$	2,377	$	2,181
U.S. government debt securities		2,022		1,564
Cash in demand deposit accounts		179		179
Cash on deposit with futures commission merchant		53		96
U.S. government debt securities on deposit with futures commission merchant		51		10

Total	$	4,682	$	4,030

4. INCOME TAXES

The Company’s effective income tax rate for the three months ended December 31, 2012 was 38.0%, compared to 31.2% for the three months ended December 31, 2011. The provision for income taxes for the three months ended December 31, 2011 was significantly lower than normal due to $14 million of favorable resolutions of state income tax matters. This favorably impacted the Company’s earnings for the three months ended December 31, 2011 by approximately 2.5 cents per share.

5. NOTES PAYABLE AND LONG-TERM DEBT

Notes payable and long-term debt consist of the following (dollars in millions):


	Face		Unamortized			Fair Value		Net Carrying
December 31, 2012	Value		Discount			Adjustment ⁽¹⁾		Value
Notes payable:
Parent Revolving Facility	$	275	$	—		$	—	$	275
Senior Notes:
4.150% Senior Notes due 2014		500		—			24		524
5.600% Senior Notes due 2019		500		(1	)		64		563

Subtotal - Long-term debt		1,000		(1	)		88		1,087

Total notes payable and long-term debt	$	1,275	$	(1	)	$	88	$	1,362


	Face		Unamortized			Fair Value		Net Carrying
September 30, 2012	Value		Discount			Adjustment ⁽¹⁾		Value
Senior Notes:
2.950% Senior Notes due 2012	$	250	$	—		$	1	$	251
4.150% Senior Notes due 2014		500		—			27		527
5.600% Senior Notes due 2019		500		(1	)		68		567

Total long-term debt	$	1,250	$	(1	)	$	96	$	1,345

(1)	Fair value adjustments relate to changes in the fair value of the debt while in a fair value hedging relationship. See “Interest Rate Swaps” below.

Interest Rate Swaps – The Company is exposed to changes in the fair value of its fixed-rate Senior Notes resulting from interest rate fluctuations. To hedge this exposure, on December 30, 2009, the Company entered into fixed-for-variable interest rate swaps on the 2.950% Senior Notes due December 1, 2012 (the “2012 Notes”) and the 4.150% Senior Notes due December 1, 2014 (the “2014 Notes”) for notional amounts of $250 million and $500 million, respectively, with maturity dates matching the respective maturity dates of the 2012 Notes and 2014 Notes. In addition, on January 7, 2011, the Company entered into a fixed-for-variable interest rate swap on the 5.600% Senior Notes due December 1, 2019 (the “2019 Notes”) for a notional amount of $500 million, with a maturity date matching the maturity date of the 2019 Notes. The interest rate swaps effectively change the fixed-rate interest on the Senior Notes to variable-rate interest. Under the terms of the interest rate swap agreements, the Company receives semi-annual fixed-rate interest payments based on the same rates applicable to the Senior Notes, and makes quarterly variable-rate interest payments based on three-month LIBOR plus (a) 0.9693% for the swap on the

2012 Notes, (b) 1.245% for the swap on the 2014 Notes and (c) 2.3745% for the swap on the 2019 Notes. On December 1, 2012, the Company paid in full the outstanding principal under the 2012 Notes and the interest rate swap on the 2012 Notes expired. As of December 31, 2012, the weighted-average effective interest rate on the Senior Notes was 2.12%.

The interest rate swaps are accounted for as fair value hedges and qualify for the shortcut method of accounting. Changes in the payment of interest resulting from the interest rate swaps are recorded in interest on borrowings on the Condensed Consolidated Statements of Income. Changes in fair value of the interest rate swaps are completely offset by changes in fair value of the related notes, resulting in no effect on net income. The following table summarizes gains and losses resulting from changes in the fair value of the interest rate swaps and the hedged fixed-rate debt for the periods indicated (dollars in millions):


	Three Months Ended December 31,
	2012			2011
Gain (loss) on fair value of interest rate swaps	$	(8	)	$	(2	)
Gain (loss) on fair value of hedged fixed-rate debt		8			2

Net gain (loss) recorded in interest on borrowings	$	—		$	—

The following table summarizes the fair value of outstanding derivatives designated as hedging instruments on the Condensed Consolidated Balance Sheets (dollars in millions):


	December 31,		September 30,
	2012		2012
Derivatives recorded under the caption Other assets:
Interest rate swap assets	$	88	$	96

The interest rate swaps are subject to counterparty credit risk. Credit risk is managed by limiting activity to approved counterparties that meet a minimum credit rating threshold and by entering into credit support agreements. The bilateral credit support agreements related to the interest rate swaps require daily collateral coverage, in the form of cash or U.S. Treasury securities, for the aggregate fair value of the interest rate swaps. As of December 31, 2012 and September 30, 2012, the interest rate swap counterparties for the Senior Notes had pledged $92 million and $113 million of collateral, respectively, to the Company in the form of cash. A liability for collateral pledged to the Company in the form of cash is recorded in accounts payable and accrued liabilities on the Condensed Consolidated Balance Sheets.

TD Ameritrade Holding Corporation Credit Agreement — On December 28, 2012, the Company borrowed $275 million under the TD Ameritrade Holding Corporation senior unsecured revolving credit facility (the “Parent Revolving Facility”). The Company used the proceeds to fund a $0.50 per share special cash dividend, paid on the Company’s common stock on December 31, 2012. As of December 31, 2012, there was $275 million of borrowings outstanding under the Parent Revolving Facility. The maturity date of the Parent Revolving Facility is June 28, 2014. Interest is payable monthly based on one-month LIBOR plus an interest rate margin. As of December 31, 2012, the interest rate margin was 1.50%, determined by reference to the Company’s public debt ratings, and the interest rate was 1.71%.

6. CAPITAL REQUIREMENTS

The Company’s broker-dealer subsidiaries are subject to the SEC Uniform Net Capital Rule (Rule 15c3-1 under the Securities Exchange Act of 1934, or the “Exchange Act”), administered by the SEC and the Financial Industry Regulatory Authority (“FINRA”), which requires the maintenance of minimum net capital, as defined. Net capital and the related net capital requirement may fluctuate on a daily basis.

TD Ameritrade Clearing, Inc. (“TDAC”), the Company’s clearing broker-dealer subsidiary, and TD Ameritrade, Inc., the Company’s introducing broker-dealer subsidiary, compute net capital under the alternative method as permitted by Rule 15c3-1. TDAC is required to maintain minimum net capital of the greater of $1.5 million, which is based on the type of business conducted by the broker-dealer, or 2% of aggregate debit balances arising from client transactions.

Under Rule 15c3-1, TD Ameritrade, Inc. is required to maintain minimum net capital of the greater of $250,000 or 2% of aggregate debit balances. As a futures commission merchant registered with the Commodity Futures Trading Commission (“CFTC”), TD Ameritrade, Inc. is also subject to CFTC Regulation 1.17 under the Commodity Exchange Act, administered by the CFTC and the National Futures Association, which requires the maintenance of minimum net capital of the greatest of (a) $1.0 million, (b) its futures risk-based capital requirement, equal to 8% of the total risk margin requirement for all futures positions carried by the futures commission merchant in client and nonclient accounts, or (c) its Rule 15c3-1 net capital requirement.

Under the alternative method, a broker-dealer may not repay any subordinated borrowings, pay cash dividends or make any unsecured advances or loans to its parent company or employees if such payment would result in a net capital amount of (a) less than 5% of aggregate debit balances, (b) less than 110% of its risk-based capital requirement under CFTC Regulation 1.17, or (c) less than 120% of its minimum dollar requirement. These net capital thresholds, which are specified in Exchange Act Rule 17a-11 and CFTC Regulation 1.12, are typically referred to as “early warning” net capital thresholds.

Net capital and net capital requirements for the Company’s broker-dealer subsidiaries are summarized in the following tables (dollars in millions):


TD Ameritrade Clearing, Inc.
							Net Capital
							in Excess of
			Required				Early Warning
			Net Capital		Net Capital		Threshold		Ratio of
			(2% of		in Excess of		(5% of		Net Capital
			Aggregate		Required		Aggregate		to Aggregate
Date	Net Capital		Debit Balances)		Net Capital		Debit Balances)		Debit Balances
December 31, 2012	$	1,153	$	204	$	949	$	644		11.33	%
September 30, 2012	$	1,302	$	203	$	1,099	$	796		12.86	%

TD Ameritrade, Inc.
							Net Capital
			Required				in Excess of
			Net Capital				Early Warning
			(8% of Total		Net Capital		Threshold
			Risk Margin or		in Excess of		(110% of
			Minimum Dollar		Required		Required
Date	Net Capital		Requirement)		Net Capital		Net Capital)
December 31, 2012	$	249	$	5	$	244	$	243
September 30, 2012	$	261	$	8	$	253	$	252

The Company’s non-depository trust company subsidiary, TD Ameritrade Trust Company (“TDATC”), is subject to capital requirements established by the State of Maine, which require TDATC to maintain minimum Tier 1 capital, as defined. TDATC’s Tier 1 capital was $21 million and $20 million as of December 31, 2012 and September 30, 2012, respectively, which exceeded the required Tier 1 capital by $10 million as of each date.

7. COMMITMENTS AND CONTINGENCIES

Legal and Regulatory Matters

Reserve Fund Matters – During September 2008, The Reserve, an independent mutual fund company, announced that the net asset value of the Reserve Yield Plus Fund declined below $1.00 per share. The Yield Plus Fund was not a money market mutual fund, but its stated objective was to maintain a net asset value of $1.00 per share. TD Ameritrade, Inc.’s clients continue to hold shares in the Yield Plus Fund (now known as “Yield Plus Fund – In Liquidation”), which is being liquidated. On July 23, 2010, The Reserve announced that through that date it had distributed approximately 94.8% of the Yield Plus Fund assets as of September 15, 2008 and that the Yield Plus Fund had approximately $39.7 million in total remaining assets. The Reserve stated that the fund’s Board of Trustees has set aside almost the entire amount of the remaining assets to cover potential claims, fees and expenses. The Company estimates that TD Ameritrade, Inc. clients’ current positions held in the Reserve Yield Plus Fund amount to approximately 79% of the fund.

On January 27, 2011, TD Ameritrade, Inc. entered into a settlement with the SEC, agreed to pay $0.012 per share to all eligible current or former clients that purchased shares of the Yield Plus Fund and continued to own those shares. Clients who purchased Yield Plus Fund shares through independent registered investment advisors were not eligible for the payment. In February 2011, the Company paid clients approximately $10 million under the settlement agreement.

In November 2008, a purported class action lawsuit was filed with respect to the Yield Plus Fund. The lawsuit is captioned Ross v. Reserve Management Company, Inc. et al. and is pending in the U.S. District Court for the Southern District of New York. The Ross lawsuit is on behalf of persons who purchased shares of Reserve Yield Plus Fund. On November 20, 2009, the plaintiffs filed a first amended complaint naming as defendants the fund’s advisor, certain of its affiliates and the Company and certain of its directors, officers and shareholders as alleged control persons. The complaint alleges claims of violations of the federal securities laws and other claims based on allegations that false and misleading statements and omissions were made in the Reserve Yield Plus Fund prospectuses and in other statements regarding the fund. The complaint seeks an unspecified amount of compensatory damages including interest, attorneys’ fees, rescission, exemplary damages and equitable relief. On January 19, 2010, the defendants submitted motions to dismiss the complaint. The motions are pending.

The Company estimates that its clients’ current aggregate shortfall, based on the original par value of their holdings in the Yield Plus Fund, less the value of fund distributions to date and the value of payments under the SEC settlement, is approximately $36 million. This amount does not take into account any assets remaining in the fund that may become available for future distributions.

The Company is unable to predict the outcome or the timing of the ultimate resolution of the Ross lawsuit, or the potential loss, if any, that may result. However, management believes the outcome is not likely to have a material adverse effect on the financial condition, results of operations or cash flows of the Company.

Other Legal and Regulatory Matters – The Company is subject to a number of other lawsuits, arbitrations, claims and other legal proceedings in connection with its business. Some of these legal actions include claims for substantial or unspecified compensatory and/or punitive damages. In addition, in the normal course of business, the Company discusses matters with its regulators raised during regulatory examinations or otherwise subject to their inquiry. These matters could result in censures, fines, penalties or other sanctions. Accounting Standards Codification (“ASC”) 450, Loss Contingencies, governs the recognition and disclosure of loss contingencies, including potential losses from legal and regulatory matters. ASC 450 categorizes loss contingencies using three terms based on the likelihood of occurrence of events that result in a loss: “probable” means that “the future event or events are likely to occur;” “remote” means that “the chance of the future event or events occurring is slight;” and “reasonably possible” means that “the chance of the future event or events occurring is more than remote but less than likely.” Under ASC 450, the Company accrues for losses that are considered both probable and reasonably estimable. The Company may incur losses in addition to the amounts accrued where the losses are greater than estimated by management, or for matters for which an unfavorable outcome is considered reasonably possible, but not probable.

The Company estimates that the aggregate range of reasonably possible losses in excess of amounts accrued is from $0 to $55 million as of December 31, 2012. This estimated aggregate range of reasonably possible losses is based upon currently available information for those legal and regulatory matters in which the Company is involved, taking into account the Company’s best estimate of reasonably possible losses for those cases as to which an estimate can be made. For certain cases, the Company does not believe an estimate can currently be made, as some cases are in preliminary stages and some cases have no specific amounts claimed. The Company’s estimate involves significant judgment, given the varying stages of the proceedings and the inherent uncertainty of predicting outcomes. The estimated range will change from time to time as the underlying matters, stages of proceedings and available information change. Actual losses may vary significantly from the current estimated range.

The Company believes, based on its current knowledge and after consultation with counsel, that the ultimate disposition of these legal and regulatory matters, individually or in the aggregate, is not likely to have a material adverse effect on the financial condition or cash flows of the Company. However, in light of the uncertainties involved in such matters, the Company is unable to predict the outcome or the timing of the ultimate resolution of these matters, or the potential losses, fines, penalties or equitable relief, if any, that may result, and it is possible that the ultimate resolution of one or more of these matters may be material to the Company’s results of operations for a particular reporting period.

Income Taxes

The Company’s federal and state income tax returns are subject to examination by taxing authorities. Because the application of tax laws and regulations to many types of transactions is subject to varying interpretations, amounts reported in the condensed consolidated financial statements could be significantly changed at a later date upon final determinations by taxing authorities. The Toronto-Dominion Bank (“TD”) has agreed to indemnify the Company for tax obligations, if any, pertaining to activities of TD Waterhouse Group, Inc. (“TD Waterhouse”) prior to the Company’s acquisition of TD Waterhouse in January 2006.

General Contingencies

In the ordinary course of business, there are various contingencies that are not reflected in the condensed consolidated financial statements. These include the Company’s broker-dealer subsidiaries’ client activities involving the execution, settlement and financing of various client securities, options, futures and foreign exchange transactions. These activities may expose the Company to credit risk in the event the clients are unable to fulfill their contractual obligations.

The Company extends margin credit and leverage to its clients. In margin transactions, the Company extends credit to the client, subject to various regulatory and internal margin requirements, collateralized by cash and securities in the client’s account. In connection with these activities, the Company also executes and clears client transactions involving the sale of securities not yet purchased (“short sales”). Such margin-related transactions may expose the Company to credit risk in the event a client’s assets are not sufficient to fully cover losses that the client may incur. Leverage involves securing a large potential future obligation with a lesser amount of cash and securities. The risks associated with margin credit and leverage increase during periods of rapid market movements, or in cases where leverage or collateral is concentrated and market movements occur. In the event the client fails to satisfy its obligations, the Company has the authority to purchase or sell financial instruments in the client’s account at prevailing market prices in order to fulfill the client’s obligations. However, during periods of rapid market movements, clients who utilize margin credit or leverage and who have collateralized their obligations with securities may find that the securities have a rapidly depreciating value and may not be sufficient to cover their obligations in the event of liquidation. The Company seeks to mitigate the risks associated with its client margin and leverage activities by requiring clients to maintain margin collateral in compliance with various regulatory and internal guidelines. The Company monitors required margin levels throughout each trading day and, pursuant to such guidelines, requires clients to deposit additional collateral, or to reduce positions, when necessary.

The Company loans securities temporarily to other broker-dealers in connection with its broker-dealer business. The Company receives cash as collateral for the securities loaned. Increases in securities prices may cause the market value of the securities loaned to exceed the amount of cash received as collateral. In the event the counterparty to these transactions does not return the loaned securities, the Company may be exposed to the risk of acquiring the securities at prevailing market prices in order to satisfy its client obligations. The Company mitigates this risk by requiring credit approvals for counterparties, by monitoring the market value of securities loaned on a daily basis and requiring additional cash as collateral when necessary, and by participating in a risk-sharing program offered through the Options Clearing Corporation (“OCC”).

The Company borrows securities temporarily from other broker-dealers in connection with its broker-dealer business. The Company deposits cash as collateral for the securities borrowed. Decreases in securities prices may cause the market value of the securities borrowed to fall below the amount of cash deposited as collateral. In the event the counterparty to these transactions does not return the cash deposited, the Company may be exposed to the risk of selling the securities at prevailing market prices. The Company mitigates this risk by requiring credit approvals for counterparties, by monitoring the collateral values on a daily basis and requiring collateral to be returned by the counterparties when necessary, and by participating in a risk-sharing program offered through the OCC.

The Company transacts in reverse repurchase agreements (securities purchased under agreements to resell) in connection with its broker-dealer business. The Company’s policy is to take possession or control of securities with a market value in excess of the principal amount loaned, plus accrued interest, in order to collateralize resale agreements. The Company monitors the market value of the underlying securities that collateralize the related receivable on resale agreements on a daily basis and may require additional collateral when deemed appropriate.

The following table summarizes client excess margin securities and stock borrowings that were available to the Company to utilize as collateral on various borrowings or for other purposes, and the amount of that collateral loaned or repledged by the Company (dollars in billions):


	December 31,		September 30,
	2012		2012
Client excess margin securities	$	12.0	$	12.0
Stock borrowings		0.8		0.9

Total collateral available	$	12.8	$	12.9


Collateral loaned	$	1.9	$	1.9
Collateral repledged		1.5		1.2

Total collateral loaned or repledged	$	3.4	$	3.1

Guarantees

The Company is a member of and provides guarantees to securities clearinghouses and exchanges in connection with client trading activities. Under related agreements, the Company is generally required to guarantee the performance of other members. Under these agreements, if a member becomes unable to satisfy its obligations to the clearinghouse, other members would be required to meet shortfalls. The Company’s liability under these arrangements is not quantifiable and could exceed the cash and securities it has posted to the clearinghouse as collateral. However, the potential for the Company to be required to make payments under these agreements is considered remote. Accordingly, no contingent liability is carried on the Condensed Consolidated Balance Sheets for these guarantees.

The Company clears its clients’ futures transactions on an omnibus account basis through an unaffiliated clearing firm. The Company has agreed to indemnify the unaffiliated clearing firm for any loss that it may incur for the client transactions introduced to it by the Company.

See “Insured Deposit Account Agreement” in Note 10 for a description of a guarantee included in that agreement.

Employment Agreements

The Company has entered into employment agreements with several of its key executive officers. These employment agreements generally provide for annual base salary and incentive compensation, as well as stock award acceleration and severance payments in the event of termination of employment under certain defined circumstances or changes in control of the Company. Incentive compensation, a portion of which is awarded in the form of stock-based compensation, is based on the Company’s financial performance and other factors.

8. FAIR VALUE DISCLOSURES

ASC 820-10, Fair Value Measurement , defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date.

ASC 820-10 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability, developed based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability, developed based on the best information available in the circumstances.

The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels, as follows:

•

Level 1— Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. This category includes active exchange-traded funds, money market mutual funds, mutual funds and equity securities.

•

Level 2— Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Such inputs include quoted prices in markets that are not active, quoted prices for similar assets and liabilities in active and inactive markets, inputs other than quoted prices that are observable for the asset or liability and inputs that are derived principally from or corroborated by observable market data by correlation or other means. This category includes most debt securities and other interest-sensitive financial instruments. This category also includes convertible preferred equity securities for which the fair value is measured on an as-converted basis.

•

Level 3 — Unobservable inputs for the asset or liability, where there is little, if any, observable market activity or data for the asset or liability. This category includes assets and liabilities related to money market and other mutual funds managed by The Reserve for which the net asset value has declined below $1.00 per share and the funds are being liquidated. This category also includes auction rate securities for which the periodic auctions have failed.

The following tables present the Company’s fair value hierarchy for assets and liabilities measured at fair value on a recurring basis as of December 31, 2012 and September 30, 2012 (dollars in millions):


	As of December 31, 2012
	Level 1		Level 2		Level 3		Fair Value
Assets:
Cash equivalents:
Money market mutual funds	$	1,524	$	—	$	—	$	1,524

Short-term investments:
U.S. government debt securities		—		4		—		4

Investments segregated for regulatory purposes:
U.S. government debt securities		—		2,073		—		2,073

Securities owned:
Auction rate securities		—		—		6		6
Money market and other mutual funds		—		—		1		1
U.S. government debt securities		—		292		—		292
Equity securities		8		—		—		8
Other		—		4		—		4

Subtotal - Securities owned		8		296		7		311


Investments available-for-sale:
Convertible preferred equity securities		—		91		—		91

Other assets:
Interest rate swaps ⁽¹⁾		—		88		—		88


Total assets at fair value	$	1,532	$	2,552	$	7	$	4,091

Liabilities:
Accounts payable and accrued liabilities:
Securities sold, not yet purchased:
Equity securities	$	25	$	—	$	—	$	25

(1)	See “Interest Rate Swaps” in Note 5 for details.


	As of September 30, 2012
	Level 1		Level 2		Level 3		Fair Value
Assets:
Cash equivalents:
Money market mutual funds	$	768	$	—	$	—	$	768
U.S. government debt securities		—		50		—		50

Subtotal - Cash equivalents		768		50		—		818


Short-term investments:
U.S. government debt securities		—		154		—		154

Investments segregated for regulatory purposes:
U.S. government debt securities		—		1,574		—		1,574

Securities owned:
Auction rate securities		—		—		6		6
Money market and other mutual funds		—		—		1		1
U.S. government debt securities		—		333		—		333
Other		1		2		—		3

Subtotal - Securities owned		1		335		7		343


Investments available-for-sale:
Convertible preferred equity securities		—		70		—		70

Other assets:
Interest rate swaps ⁽¹⁾		—		96		—		96


Total assets at fair value	$	769	$	2,279	$	7	$	3,055

Liabilities:
Accounts payable and accrued liabilities:
Securities sold, not yet purchased:
Equity securities	$	3	$	—	$	—	$	3

(1)	See “Interest Rate Swaps” in Note 5 for details.

There were no transfers between any levels of the fair value hierarchy during the periods presented in the table below. The following table presents the changes in Level 3 assets measured at fair value on a recurring basis for the three months ended December 31, 2012 and 2011 (dollars in millions):


	Three Months Ended				Three Months Ended
	December 31, 2012				December 31, 2011
	Securities Owned				Securities Owned
			Money Market					Money Market
	Auction Rate		and Other		Auction Rate			and Other
	Securities		Mutual Funds		Securities			Mutual Funds
Balance, beginning of period	$	6	$	1	$	20		$	1
Sales		—		—		(2	)		—
Settlements		—		—		(10	)		—

Balance, ending of period	$	6	$	1	$	8		$	1

There were no nonfinancial assets or liabilities measured at fair value during the three months ended December 31, 2012 and 2011.

Valuation Techniques

In general, and where applicable, the Company uses quoted prices in active markets for identical assets or liabilities to determine fair value. This pricing methodology applies to the Company’s Level 1 assets and liabilities. If quoted prices in active markets for identical assets and liabilities are not available to determine fair value, then the Company uses quoted prices for similar assets and liabilities or inputs other than the quoted prices that are observable, either directly or indirectly. This pricing methodology applies to the Company’s Level 2 assets and liabilities.

Level 2 Measurements:

Convertible Preferred Equity Securities – These securities represent the Company’s investment in 39,000 shares of Knight Capital Group, Inc. (“Knight”) 2% convertible preferred shares. Each preferred share is convertible to 666.667 shares of Knight Class A common stock. The fair value of the preferred securities is based on quoted market prices of Knight Class A common stock on an as-converted basis.

Debt Securities – Fair values for debt securities are based on prices obtained from an independent pricing vendor. The primary inputs to the valuation include quoted prices for similar assets in active markets, quoted prices for identical or similar assets in markets that are not active, contractual cash flows, benchmark yields and credit spreads. The Company validates the vendor pricing by periodically comparing it to pricing from another independent pricing service. The Company has not adjusted prices obtained from the independent pricing vendor for any periods presented in the condensed consolidated financial statements because no significant pricing differences have been observed.

Interest Rate Swaps – These derivatives are valued by the counterparties using a model that incorporates interest rate yield curves, which are observable for substantially the full term of the contract. The valuation model is widely accepted in the financial services industry and does not involve significant judgment because most of the inputs are observable in the marketplace. Counterparty credit risk is not an input to the valuation because the Company has possession of collateral, in the form of cash or U.S. Treasury securities, in amounts equal to or exceeding the fair value of the interest rate swaps. The Company validates the counterparty valuations by comparing them to a valuation model provided by another third party service.

Level 3 Measurements:

Money Market and Other Mutual Funds – The fair value of positions in money market and other mutual funds managed by The Reserve is estimated by management based on the underlying portfolio holdings data published by The Reserve.

Auction Rate Securities (“ARS”) – ARS are long-term variable rate securities tied to short-term interest rates that are reset through a “Dutch auction” process, which generally occurs every seven to 35 days. Holders of ARS were previously able to liquidate their holdings to prospective buyers by participating in the auctions. During fiscal 2008, the Dutch auction process failed and holders were no longer able to liquidate their holdings through the auction process. The fair value of Company ARS holdings is primarily estimated based on an internal pricing model. The pricing model takes into consideration the characteristics of the underlying securities, as well as multiple inputs, including counterparty credit quality, expected timing of redemptions and an estimated yield premium that a market participant would require over otherwise comparable securities to compensate for the illiquidity of the ARS. These inputs require significant management judgment.

The following table summarizes quantitative information about Level 3 unobservable inputs as of December 31, 2012:


Asset	Valuation Technique	Unobservable Input	Range	Weighted Average
Auction Rate Securities	Discounted cash flow	Constant prepayment rate (Annual)	15% - 20%	17%
Auction Rate Securities	Discounted cash flow	Yield premium for illiquidity	2%	2%

Fair Value of Financial Instruments Not Recorded at Fair Value

Cash and cash equivalents, receivable from/payable to brokers, dealers and clearing organizations, receivable from/payable to clients, receivable from/payable to affiliates, other receivables and notes payable are short-term in nature and accordingly are carried at amounts that approximate fair value. Cash and cash equivalents include cash and highly-liquid investments with an original maturity of three months or less (categorized as Level 1 of the fair value hierarchy). Receivable from/payable to brokers, dealers and clearing organizations, receivable from/payable to clients, receivable from/payable to affiliates, other receivables and notes payable are recorded at or near their respective transaction prices and historically have been settled or converted to cash at approximately that value (categorized as Level 2 of the fair value hierarchy).

Cash and investments segregated and on deposit for regulatory purposes includes reverse repurchase agreements (securities purchased under agreements to resell). Reverse repurchase agreements are treated as collateralized financing transactions and are carried at amounts at which the securities will subsequently be resold, plus accrued interest. The Company’s reverse repurchase agreements generally have a maturity of seven days and are collateralized by U.S. Treasury securities in amounts exceeding the carrying value of the resale agreements. Accordingly, the carrying value of reverse repurchase agreements approximates fair value (categorized as Level 2 of the fair value hierarchy). In addition, this category includes cash held in demand deposit accounts and on deposit with a futures commission merchant, for which the carrying values approximate the fair value (categorized as Level 1 of the fair value hierarchy). See Note 3 for a summary of cash and investments segregated and on deposit for regulatory purposes.

Senior Notes – As of December 31, 2012, the Company’s Senior Notes had an aggregate estimated fair value, based on quoted market prices (categorized as Level 1 of the fair value hierarchy), of approximately $1.124 billion, compared to the aggregate carrying value of the Senior Notes on the Condensed Consolidated Balance Sheet of $1.087 billion. As of September 30, 2012, the Company’s Senior Notes had an aggregate estimated fair value, based on quoted market prices, of approximately $1.373 billion, compared to the aggregate carrying value of the Senior Notes on the Condensed Consolidated Balance Sheet of $1.345 billion.

9. EARNINGS PER SHARE

The following is a reconciliation of the numerator and denominator used in the computation of basic and diluted earnings per share for the periods indicated (in millions, except per share amounts):


	Three Months Ended December 31,
	2012		2011
Net income	$	147	$	152


Weighted average shares outstanding - basic		546		550
Effect of dilutive securities:
Common stock equivalent shares related to stock-based compensation		5		5

Weighted average shares outstanding - diluted ⁽¹⁾		551		555


Earnings per share - basic	$	0.27	$	0.28
Earnings per share - diluted	$	0.27	$	0.27

(1)	The Company excluded from the calculation of diluted earnings per share 2.5 million and 2.6 million shares underlying stock-based compensation awards for the three months ended December 31, 2012 and 2011, respectively, because their inclusion would have been antidilutive.

10. RELATED PARTY TRANSACTIONS

Transactions with TD and Affiliates

As a result of the Company’s acquisition of TD Waterhouse during fiscal 2006, TD became an affiliate of the Company. TD owned approximately 45.2% of the Company’s common stock as of December 31, 2012, of which 45% is permitted to be voted under the terms of the Stockholders Agreement among TD, the Company and certain other stockholders. Pursuant to the Stockholders Agreement, TD has the right to designate five of twelve members of the Company’s board of directors. The Company transacts business and has extensive relationships with TD and certain of its affiliates. Transactions with TD and its affiliates are discussed and summarized below.

Insured Deposit Account Agreement

Through December 31, 2012, the Company has been party to an insured deposit account (“IDA”) agreement, dated as of December 19, 2009, with TD Bank USA, N.A. (“TD Bank USA”), TD Bank, N.A. and TD (the “old IDA agreement”). Under the old IDA agreement, TD Bank USA and TD Bank, N.A. (together, the “Depository Institutions”) made available to clients of the Company FDIC-insured money market deposit accounts as either designated sweep vehicles or as non-sweep deposit accounts. The Company provided marketing, recordkeeping and support services for the Depository Institutions with respect to the money market deposit accounts. In exchange for providing these services, the Depository Institutions paid the Company an aggregate marketing fee based on the weighted average yield earned on the client IDA assets, less the actual interest paid to clients, a flat servicing fee to the Depository Institutions of 25 basis points and the cost of FDIC insurance premiums.

The fee earned on the old IDA agreement was calculated based on two primary components: (a) the yield on fixed-rate “notional” investments, based on prevailing fixed rates for identical balances and maturities in the interest rate swap market (generally LIBOR-based) at the time such investments were added to the IDA portfolio (including any adjustments required to adjust the variable rate leg of such swaps to a one-month reset frequency and the overall swap payment frequency to monthly) and (b) the yield on floating-rate investments, based on the monthly average rate for 30-day LIBOR. The agreement provided that, from time to time, the Company may request amounts and maturity dates for the fixed-rate notional investments in the IDA portfolio, subject to the approval of the Depository Institutions. For example, if the Company requested (and the Depository Institutions agreed) that $100 million of deposits should be invested in 5-year fixed-rate investments, and on the day such investment was approved the prevailing fixed yield for the applicable 5-year U.S. dollar LIBOR-based swaps was 1.00%, then the Company would earn a gross fixed yield of 1.00% on that portion of the portfolio (before any deductions for interest paid to clients, the flat 25 basis point servicing fee to the Depository Institutions and the cost of FDIC insurance premiums). The interest rates paid to clients were set by the Depository Institutions and were not linked to any index. As of December 31, 2012, the IDA portfolio was comprised of approximately 80% fixed-rate notional investments and 20% floating-rate investments.

On January 17, 2013, the Company entered into a new IDA agreement among the same parties (the “new IDA agreement”), which supersedes and replaces the old IDA agreement. The new IDA agreement is effective January 1, 2013 and has an initial term expiring July 1, 2018. It is automatically renewable for successive five-year terms, provided that it may be terminated by either the Company or the Depository Institutions by providing written notice of non-renewal at least two years prior to the initial expiration date or the expiration date of any subsequent renewal period. The marketing fee calculation under the new IDA agreement is substantially similar to the old IDA agreement, with certain significant differences described below.

The new IDA agreement provides that the Company may designate amounts and maturity dates for the fixed-rate notional investments in the IDA portfolio, subject to certain limitations. In the event that (1) the federal funds effective rate is established at 0.75% or greater and (2) the rate on 5-year U.S. dollar interest rate swaps is equal to or greater than 1.50% for 20 consecutive business days, then the rate earned by the Company on new fixed-rate notional investments will be reduced by 20% of the excess of the 5-year U.S. dollar swap rate over 1.50%, up to a maximum of 0.10%.

Under the new IDA agreement, the yield on floating-rate investments is calculated daily based on the greater of the following rates published by the Federal Reserve: (1) the interest rate paid by Federal Reserve Banks on balances held in excess of required reserve balances and contractual clearing balances under Regulation D and (2) the daily effective federal funds rate.

The servicing fee to the Depository Institutions under the new IDA agreement is equal to 25 basis points on the aggregate average daily balance in the IDA accounts, subject to adjustment as it relates to deposits of less than or equal to $20 billion kept in floating-rate investments or in fixed-rate notional investments with a maturity of up to 24 months (“short-term fixed-rate investments”). For floating-rate and short-term fixed-rate investments, the servicing fee is equal to the difference of the interest rate earned on the investments less the FDIC premiums paid (in basis points), divided by two. The servicing fee has a floor of 3 basis points (subject to adjustment from time to time to reflect material changes to the Depository Institutions’ leverage costs) and a maximum of 25 basis points.

Under both the new and old IDA agreements, in the event the marketing fee computation results in a negative amount, the Company must pay the Depository Institutions the negative amount. This effectively results in the Company guaranteeing the Depository Institutions revenue equal to the servicing fee on the IDA agreement, plus the reimbursement of FDIC insurance premiums. The marketing fee computation under the IDA agreement is affected by many variables, including the type, duration, principal balance and yield of the fixed-rate and floating-rate investments, the prevailing interest rate environment, the amount of client deposits and the yield paid on client deposits. Because a negative marketing fee computation would arise only if there were extraordinary movements in many of these variables, the maximum potential amount of future payments the Company could be required to make under this arrangement cannot be reasonably estimated. Management believes the potential for the marketing fee calculation to result in a negative amount is remote. Accordingly, no contingent liability is carried on the Condensed Consolidated Balance Sheets for the IDA agreement.

In addition, the Company has various other services agreements and transactions with TD and its affiliates. The following tables summarize revenues and expenses resulting from transactions with TD and its affiliates for the periods indicated (dollars in millions):


		Revenues from TD and Affiliates
		Three months ended
	Statement of Income	December 31,
Description	Classification	2012		2011
Insured Deposit Account Agreement	Insured deposit account fees	$	205	$	205
Mutual Fund Agreements	Investment product fees		1		1
Referral and Strategic Alliance Agreement	Various		2		1
Securities borrowing and lending, net	Net interest revenue		1		1
Other	Various		1		1

Total revenues		$	210	$	209


		Expenses to TD and Affiliates
		Three months ended
	Statement of Income	December 31,
Description	Classification	2012		2011
Canadian Call Center Services Agreement	Professional services	$	5	$	4
Other	Various		—		2

Total expenses		$	5	$	6

The following table summarizes the classification and amount of receivables from and payables to TD and its affiliates on the Condensed Consolidated Balance Sheets resulting from related party transactions (dollars in millions):


	December 31,		September 30,
	2012		2012
Assets:
Receivable from brokers, dealers and clearing organizations	$	1	$	1
Receivable from affiliates		180		85

Liabilities:
Payable to brokers, dealers and clearing organizations	$	85	$	125
Payable to affiliates		5		4

Receivables from and payables to TD affiliates resulting from client cash sweep activity are generally settled in cash the next business day. Receivables from and payables to brokers, dealers and clearing organizations primarily relate to securities borrowing and lending activity and are settled in accordance with the contractual terms. Other receivables from and payables to affiliates of TD are generally settled in cash on a monthly basis.

11. CONDENSED CONSOLIDATING FINANCIAL INFORMATION

The Senior Notes are jointly and severally and fully and unconditionally guaranteed by TD Ameritrade Online Holdings Corp. (“TDAOH”), a wholly-owned subsidiary of the Company. Presented below is condensed consolidating financial information for the Company, its guarantor subsidiary and its non-guarantor subsidiaries for the periods indicated. Because all other comprehensive income activity occurred on the parent company for all periods presented, condensed consolidating statements of comprehensive income are not presented.

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2012

(Unaudited)


			Guarantor		Non-Guarantor
	Parent		Subsidiary		Subsidiaries		Eliminations			Total
	(In millions)
ASSETS
Cash and cash equivalents	$	176	$	6	$	1,670	$	—		$	1,852
Short-term investments		—		—		4		—			4
Cash and investments segregated and on deposit for regulatory purposes		—		—		4,682		—			4,682
Receivable from brokers, dealers and clearing organizations		—		—		948		—			948
Receivable from clients, net		—		—		8,799		—			8,799
Investments in subsidiaries		5,435		5,220		542		(11,197	)		—
Receivable from affiliates		2		3		181		(6	)		180
Goodwill		—		—		2,467		—			2,467
Acquired intangible assets, net		—		146		763		—			909
Other, net		220		7		965		(15	)		1,177

Total assets	$	5,833	$	5,382	$	21,021	$	(11,218	)	$	21,018


LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Payable to brokers, dealers and clearing organizations	$	—	$	—	$	1,941	$	—		$	1,941
Payable to clients		—		—		12,459		—			12,459
Accounts payable and accrued liabilities		190		—		382		(8	)		564
Payable to affiliates		3		—		7		(5	)		5
Notes payable		275		—		—		—			275
Long-term debt		1,087		—		—		—			1,087
Other		—		49		368		(8	)		409

Total liabilities		1,555		49		15,157		(21	)		16,740

Stockholders’ equity		4,278		5,333		5,864		(11,197	)		4,278

Total liabilities and stockholders’ equity	$	5,833	$	5,382	$	21,021	$	(11,218	)	$	21,018

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF SEPTEMBER 30, 2012

(Unaudited)


			Guarantor		Non-Guarantor
	Parent		Subsidiary		Subsidiaries		Eliminations			Total
	(In millions)
ASSETS
Cash and cash equivalents	$	178	$	6	$	731	$	—		$	915
Short-term investments		151		—		3		—			154
Cash and investments segregated and on deposit for regulatory purposes		—		—		4,030		—			4,030
Receivable from brokers, dealers and clearing organizations		—		—		1,110		—			1,110
Receivable from clients, net		—		—		8,647		—			8,647
Investments in subsidiaries		5,456		5,250		548		(11,254	)		—
Receivable from affiliates		5		3		83		(6	)		85
Goodwill		—		—		2,467		—			2,467
Acquired intangible assets, net		—		146		786		—			932
Other, net		230		7		961		(25	)		1,173

Total assets	$	6,020	$	5,412	$	19,366	$	(11,285	)	$	19,513


LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Payable to brokers, dealers and clearing organizations	$	—	$	—	$	1,992	$	—		$	1,992
Payable to clients		—		—		10,728		—			10,728
Accounts payable and accrued liabilities		249		—		391		(8	)		632
Payable to affiliates		1		—		9		(6	)		4
Long-term debt		1,345		—		—		—			1,345
Other		—		48		356		(17	)		387

Total liabilities		1,595		48		13,476		(31	)		15,088

Stockholders’ equity		4,425		5,364		5,890		(11,254	)		4,425

Total liabilities and stockholders’ equity	$	6,020	$	5,412	$	19,366	$	(11,285	)	$	19,513

CONDENSED CONSOLIDATING STATEMENT OF INCOME

THREE MONTHS ENDED DECEMBER 31, 2012

(Unaudited)


				Guarantor			Non-Guarantor
	Parent			Subsidiary			Subsidiaries			Eliminations			Total
	(In millions)
Net revenues	$	4		$	—		$	650		$	(3	)	$	651
Operating expenses		4			—			409			(3	)		410

Operating income		—			—			241			—			241
Other expense (income)		7			—			(3	)		—			4

Income (loss) before income taxes and equity in income of subsidiaries		(7	)		—			244			—			237
Provision for (benefit from) income taxes		(4	)		1			93			—			90

Income (loss) before equity in income of subsidiaries		(3	)		(1	)		151			—			147
Equity in income of subsidiaries		150			145			8			(303	)		—

Net income	$	147		$	144		$	159		$	(303	)	$	147

CONDENSED CONSOLIDATING STATEMENT OF INCOME

THREE MONTHS ENDED DECEMBER 31, 2011

(Unaudited)


				Guarantor			Non-Guarantor
	Parent			Subsidiary			Subsidiaries		Eliminations			Total
	(In millions)
Net revenues	$	6		$	—		$	653	$	(6	)	$	653
Operating expenses		6			—			425		(6	)		425

Operating income		—			—			228		—			228
Other expense		7			—			—		—			7

Income (loss) before income taxes and equity in income of subsidiaries		(7	)		—			228		—			221
Provision for (benefit from) income taxes		(14	)		(1	)		84		—			69

Income before equity in income of subsidiaries		7			1			144		—			152
Equity in income of subsidiaries		145			146			9		(300	)		—

Net income	$	152		$	147		$	153	$	(300	)	$	152

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

THREE MONTHS ENDED DECEMBER 31, 2012

(Unaudited)


				Guarantor		Non-Guarantor
	Parent			Subsidiary		Subsidiaries			Total
	(In millions)
Net cash provided by (used in) operating activities	$	(33	)	$	—	$	1,153		$	1,120

Cash flows from investing activities:
Purchase of property and equipment		—			—		(46	)		(46	)
Proceeds from sale and maturity of short-term investments		150			—		—			150
Other, net		—			—		3			3

Net cash provided by (used in) investing activities		150			—		(43	)		107


Cash flows from financing activities:
Principal payments on long-term debt		(250	)		—		—			(250	)
Proceeds from notes payable		275			—		—			275
Payment of cash dividends		(323	)		—		—			(323	)
Purchase of treasury stock		(4	)		—		—			(4	)
Other, net		12			—		—			12

Net cash used in financing activities		(290	)		—		—			(290	)


Intercompany investing and financing activities, net		171			—		(171	)		—


Net increase (decrease) in cash and cash equivalents		(2	)		—		939			937

Cash and cash equivalents at beginning of period		178			6		731			915

Cash and cash equivalents at end of period	$	176		$	6	$	1,670		$	1,852

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

THREE MONTHS ENDED DECEMBER 31, 2011

(Unaudited)


				Guarantor		Non-Guarantor
	Parent			Subsidiary		Subsidiaries			Total
	(In millions)
Net cash provided by operating activities	$	20		$	1	$	35		$	56

Cash flows from investing activities:
Purchase of property and equipment		—			—		(28	)		(28	)

Net cash used in investing activities		—			—		(28	)		(28	)


Cash flows from financing activities:
Purchase of treasury stock		(115	)		—		—			(115	)
Payment of cash dividends		(33	)		—		—			(33	)
Other, net		8			—		(2	)		6

Net cash used in financing activities		(140	)		—		(2	)		(142	)


Intercompany investing and financing activities, net		233			—		(233	)		—


Net increase (decrease) in cash and cash equivalents		113			1		(228	)		(114	)

Cash and cash equivalents at beginning of period		94			7		931			1,032

Cash and cash equivalents at end of period	$	207		$	8	$	703		$	918

Item 2. - Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of the financial condition and results of operations of the Company should be read in conjunction with the Selected Financial Data and the Consolidated Financial Statements and Notes thereto included in the Company’s annual report on Form 10-K for the fiscal year ended September 30, 2012, and the Condensed Consolidated Financial Statements and Notes thereto contained in this quarterly report on Form 10-Q.

This discussion contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements include statements preceded by, followed by or that include the words “may,” “could,” “would,” “should,” “believe,” “expect,” “anticipate,” “plan,” “estimate,” “target,” “project,” “intend” and similar expressions. In particular, forward-looking statements contained in this discussion include our expectations regarding: the effect of client trading activity on our results of operations; the effect of changes in interest rates on our net interest spread; the average yield earned on insured deposit account assets; the effect of our migration of client cash balances into the insured deposit account offering; our effective income tax rate; and our capital and liquidity needs and our plans to finance such needs.

The Company’s actual results could differ materially from those anticipated in such forward-looking statements. Important factors that may cause such differences include, but are not limited to: general economic and political conditions and other securities industry risks; fluctuations in interest rates; stock market fluctuations and changes in client trading activity; credit risk with clients and counterparties; increased competition; systems failures, delays and capacity constraints; network security risks; liquidity risk; new laws and regulations affecting our business; regulatory and legal matters and uncertainties and the other risks and uncertainties set forth under Item 1A. – Risk Factors of the Company’s annual report on Form 10-K, as amended, for the fiscal year ended September 30, 2012. The forward-looking statements contained in this report speak only as of the date on which the statements were made. We undertake no obligation to publicly update or revise these statements, whether as a result of new information, future events or otherwise, except to the extent required by the federal securities laws.

The preparation of our financial statements requires us to make judgments and estimates that may have a significant impact upon our financial results. Note 1 of our Notes to Consolidated Financial Statements for the fiscal year ended September 30, 2012, contains a summary of our significant accounting policies, many of which require the use of estimates and assumptions. We believe that the following areas are particularly subject to management’s judgments and estimates and could materially affect our results of operations and financial position: valuation of goodwill and acquired intangible assets; valuation of stock-based compensation; estimates of effective income tax rates, deferred income taxes and related valuation allowances; accruals for contingent liabilities; and valuation of guarantees. These areas are discussed in further detail under the heading “Critical Accounting Policies and Estimates” in Item 7 of our annual report on Form 10-K for the fiscal year ended September 30, 2012.

Unless otherwise indicated, the terms “we,” “us,” “our” or “Company” in this report refer to TD Ameritrade Holding Corporation and its wholly-owned subsidiaries. The term “GAAP” refers to U.S. generally accepted accounting principles.

GLOSSARY OF TERMS

In discussing and analyzing our business, we utilize several metrics and other terms that are defined in the following Glossary of Terms. Italics indicate other defined terms that appear elsewhere in the Glossary. The term “GAAP” refers to U.S. generally accepted accounting principles.

Activity rate – funded accounts — Average client trades per day during the period divided by the average number of funded accounts during the period.

Asset-based revenues — Revenues consisting of (1) net interest revenue , (2) insured deposit account fees and (3) investment product fees . The primary factors driving our asset-based revenues are average balances and average rates. Average balances consist primarily of average client margin balances , average segregated cash balances, average client credit balances , average client insured deposit account balances, average fee-based investment balances and average securities borrowing and securities lending balances. Average rates consist of the average interest rates and fees earned and paid on such balances.

Average client trades per funded account (annualized) — Total trades divided by the average number of funded accounts during the period, annualized based on the number of trading days in the fiscal year.

Average client trades per day — Total trades divided by the number of trading days in the period. This metric is also known as daily average revenue trades (“DARTs”).

Average commissions and transaction fees per trade — Total commissions and transaction fee revenues as reported on the Company’s Consolidated Statements of Income (excluding clearing revenues from TD Waterhouse UK) divided by total trades for the period. Commissions and transaction fee revenues primarily consist of trading commissions, revenue-sharing arrangements with market destinations (also referred to as “payment for order flow”) and markups on riskless principal transactions in fixed-income securities.

Basis point — When referring to interest rates, one basis point represents one one-hundredth of one percent.

Beneficiary accounts — Brokerage accounts managed by a custodian, guardian, conservator or trustee on behalf of one or more beneficiaries. Examples include accounts maintained under the Uniform Gift to Minors Act (UGMA) or Uniform Transfer to Minors Act (UTMA), guardianship, conservatorship and trust arrangements and pension or profit plan for small business accounts.

Brokerage accounts — Accounts maintained by the Company on behalf of clients for securities brokerage activities. The primary types of brokerage accounts are cash accounts, margin accounts, IRA accounts and beneficiary accounts. Futures accounts are sub-accounts associated with a brokerage account for clients who wish to trade futures and/or options on futures.

Cash accounts — Brokerage accounts that do not have margin account approval.

Client assets — The total value of cash and securities in brokerage accounts.

Client cash and money market assets — The sum of all client cash balances, including client credit balances and client cash balances swept into insured deposit accounts or money market mutual funds.

Client credit balances — Client cash held in brokerage accounts, excluding balances generated by client short sales on which no interest is paid. Interest paid on client credit balances is a reduction of net interest revenue. Client credit balances are included in “payable to clients” on our Consolidated Balance Sheets.

Client margin balances — The total amount of cash loaned to clients in margin accounts. Such loans are secured by client assets. Interest earned on client margin balances is a component of net interest revenue. Client margin balances are included in “receivable from clients” on our Consolidated Balance Sheets.

Conduit-based assets — Deposits paid on securities borrowing associated with our conduit-based securities borrowing/lending business. In our conduit business, we act as an intermediary by borrowing securities from one counterparty and lending the same securities to another counterparty. We generally earn a net interest spread equal to the excess of interest earned on securities borrowing deposits over the interest paid on securities lending deposits.

Daily average revenue trades (“DARTs”) — Total trades divided by the number of trading days in the period. This metric is also known as average client trades per day.

EBITDA — EBITDA (earnings before interest, taxes, depreciation and amortization) is a non-GAAP financial measure. We consider EBITDA to be an important measure of our financial performance and of our ability to generate cash flows to service debt, fund capital expenditures and fund other corporate investing and financing activities. EBITDA is used as the denominator in the consolidated leverage ratio calculation for covenant purposes under our holding company’s senior revolving credit facility. EBITDA eliminates the non-cash effect of tangible asset depreciation and amortization and intangible asset amortization. EBITDA should be considered in addition to, rather than as a substitute for, pre-tax income, net income and cash flows from operating activities.

EPS excluding amortization of intangible assets — Earnings per share (“EPS”) excluding amortization of intangible assets is a non-GAAP financial measure. We define EPS excluding amortization of intangible assets as earnings (loss) per share, adjusted to remove the after-tax effect of amortization of acquired intangible assets. We consider EPS excluding amortization of intangible assets an important measure of our financial performance. Amortization of acquired intangible assets is excluded because we believe it is not indicative of underlying business performance. EPS excluding amortization of intangible assets should be considered in addition to, rather than as a substitute for, GAAP earnings per share.

EPS from ongoing operations — EPS from ongoing operations is a non-GAAP financial measure. We define EPS from ongoing operations as earnings (loss) per share, adjusted to remove any significant unusual gains or charges. We consider EPS from ongoing operations an important measure of the financial performance of our ongoing business. Unusual gains and charges are excluded because we believe they are not likely to be indicative of the ongoing operations of our business. EPS from ongoing operations should be considered in addition to, rather than as a substitute for, GAAP earnings per share.

Fee-based investment balances — Client assets invested in money market mutual funds, other mutual funds and Company programs such as AdvisorDirect ^® and Amerivest, ^TM on which we earn fee revenues. Fee revenues earned on these balances are included in investment product fees on our Consolidated Statements of Income.

Funded accounts — All open client accounts with a total liquidation value greater than zero.

Futures accounts — Sub-accounts maintained by the Company on behalf of clients for trading in futures and/or options on futures. Each futures account must be associated with a brokerage account . Futures accounts are not counted separately for purposes of the Company’s client account metrics.

Insured deposit account — The Company is party to an Insured Deposit Account (“IDA”) agreement with TD Bank USA, N.A. (“TD Bank USA”), TD Bank, N.A. and The Toronto-Dominion Bank (“TD”). Under the IDA agreement, TD Bank USA and TD Bank, N.A. (together, the “Depository Institutions”) make available to clients of the Company FDIC-insured money market deposit accounts as either designated sweep vehicles or as non-sweep deposit accounts. The Company provides marketing, recordkeeping and support services for the Depository Institutions with respect to the money market deposit accounts. In exchange for providing these services, the Depository Institutions pay the Company an aggregate marketing fee based on the yield earned on the client IDA assets, less the actual interest paid to clients, a servicing fee to the Depository Institutions of 25 basis point s (subject to adjustment) and the cost of FDIC insurance premiums.

Interest rate-sensitive assets — Consist of spread-based assets and client cash invested in money market mutual funds.

Investment product fees — Revenues earned on fee-based investment balances . Investment product fees include fees earned on money market mutual funds, other mutual funds and through Company programs such as AdvisorDirect ^® and Amerivest ^TM .

IRA accounts (Individual Retirement Arrangements) — A personal trust account for the exclusive benefit of a U.S. individual (or his or her beneficiaries) that provides tax advantages in accumulating funds to save for retirement or other qualified purposes. These accounts are subject to numerous restrictions on additions to and withdrawals from the account, as well as prohibitions against certain investments or transactions conducted within the account. The Company offers traditional, Roth, Savings Incentive Match Plan for Employees (SIMPLE) and Simplified Employee Pension (SEP) IRA accounts.

Liquid assets – management target — “Liquid assets – management target” is a non-GAAP financial measure. We define “liquid assets – management target” as the sum of (a) corporate cash and cash equivalents, (b) corporate short-term investments and (c) regulatory net capital of (i) our clearing broker-dealer subsidiary in excess of 10% of aggregate debit items and (ii) our introducing broker-dealer subsidiaries in excess of a minimum operational target established by management ($50 million in the case of our primary introducing broker-dealer, TD Ameritrade, Inc.). We include the excess capital of our broker-dealer subsidiaries in “liquid assets – management target,” rather than simply including broker-dealer cash and cash equivalents, because capital requirements may limit the amount of cash available for dividend from the broker-dealer subsidiaries to the parent company. Excess capital, as defined under clause (c) above, is generally available for dividend from the broker-dealer subsidiaries to the parent company. “Liquid assets – management target” is based on more conservative measures of broker-dealer net capital than “liquid assets – regulatory threshold” (defined below) because we prefer to maintain significantly more conservative levels of net capital at the broker-dealer subsidiaries than the regulatory thresholds require. We consider “liquid assets – management target” to be a measure that reflects our liquidity that would be readily available for corporate investing and financing activities under normal operating circumstances. “ Liquid assets – regulatory threshold” is a related metric that reflects our liquidity that would be available for corporate investing and financing activities under unusual operating circumstances, such as the need to provide funding for significant strategic business transactions. Our liquid assets metrics should be considered as supplemental measures of liquidity, rather than as substitutes for cash and cash equivalents.

Liquid assets – regulatory threshold — “Liquid assets – regulatory threshold” is a non-GAAP financial measure. We define “liquid assets – regulatory threshold” as the sum of (a) corporate cash and cash equivalents, (b) corporate short-term investments, (c) regulatory net capital of (i) our clearing broker-dealer subsidiary in excess of 5% of aggregate debit items and (ii) our introducing broker-dealer subsidiaries in excess of the applicable “early warning” net capital requirement and (d) Tier 1 capital of our trust company in excess of the minimum dollar requirement. We include the excess capital of our broker-dealer and trust company subsidiaries in “liquid assets – regulatory threshold,” rather than simply including broker-dealer and trust company cash and cash equivalents, because capital requirements may limit the amount of cash available for dividend from the broker-dealer and trust company subsidiaries to the parent company. Excess capital, as defined under clauses (c) and (d) above, is generally available for dividend from the broker-dealer and trust company subsidiaries to the parent company. We consider “liquid assets – regulatory threshold” to be a measure that reflects our liquidity that would be available for corporate investing and financing activities under unusual operating circumstances, such as the need to provide funding for significant strategic business transactions. “ Liquid assets – management target” is a related metric that reflects our liquidity that would be readily available for corporate investing and financing activities under normal operating circumstances. Our liquid assets metrics should be considered as supplemental measures of liquidity, rather than as substitutes for cash and cash equivalents.

Liquidation value — The net value of a client’s account holdings as of the close of a regular trading session. Liquidation value includes client cash and the value of long security positions, less margin balances and the cost to buy back short security positions. It also includes the value of open futures, foreign exchange and options positions.

Margin accounts — Brokerage accounts in which clients may borrow from the Company to buy securities or for any other purpose, subject to regulatory and Company-imposed limitations.

Market fee-based investment balances — Client assets invested in mutual funds (except money market funds) and Company programs such as AdvisorDirect ^® and Amerivest, ^TM on which we earn fee revenues that are largely based on a percentage of the market value of the investment. Market fee-based investment balances are a component of fee-based investment balances . Fee revenues earned on these balances are included in investment product fees on our Consolidated Statements of Income.

Net interest margin (“NIM”) — A measure of the net yield on our average spread-based assets . Net interest margin is calculated for a given period by dividing the annualized sum of net interest revenue and insured deposit account fees by average spread-based assets .

Net interest revenue — Net interest revenue is interest revenues less brokerage interest expense. Interest revenues are generated by charges to clients on margin balances maintained in margin accounts, the investment of cash from operations and segregated cash in short-term marketable securities and interest earned on securities borrowing . Brokerage interest expense consists of amounts paid or payable to clients based on credit balances maintained in brokerage accounts and interest incurred on securities lending . Brokerage interest expense does not include interest on Company non-brokerage borrowings.

Net new assets — Consists of total client asset inflows, less total client asset outflows, excluding activity from business combinations. Client asset inflows include interest and dividend payments and exclude changes in client assets due to market fluctuations. Net new assets are measured based on the market value of the assets as of the date of the inflows and outflows.

Net new asset growth rate (annualized) — Annualized net new assets as a percentage of client assets as of the beginning of the period.

New accounts — The number of new client accounts (funded and unfunded) opened in a specified period.

Operating expenses excluding advertising — Operating expenses excluding advertising is a non-GAAP financial measure. Operating expenses excluding advertising consists of total operating expenses, adjusted to remove advertising expense. We consider operating expenses excluding advertising an important measure of the financial performance of our ongoing business. Advertising spending is excluded because it is largely at the discretion of the Company, can vary significantly from period to period based on market conditions and generally relates to the acquisition of future revenues through new accounts rather than current revenues from existing accounts. Operating expenses excluding advertising should be considered in addition to, rather than as a substitute for, total operating expenses.

Return on client assets (ROCA) — Annualized pre-tax income divided by average client assets during the period.

Securities borrowing — We borrow securities temporarily from other broker-dealers in connection with our broker-dealer business. We deposit cash as collateral for the securities borrowed, and generally earn interest revenue on the cash deposited with the counterparty.

Securities lending — We loan securities temporarily to other broker-dealers in connection with our broker-dealer business. We receive cash as collateral for the securities loaned, and generally incur interest expense on the cash deposited with us.

Segregated cash — Client cash and investments segregated in compliance with Rule 15c3-3 of the Securities Exchange Act of 1934 (the Customer Protection Rule) and other regulations. Interest earned on segregated cash is a component of net interest revenue.

Spread-based assets — Client and brokerage-related asset balances, including client margin balances , segregated cash , insured deposit account balances, deposits paid on securities borrowing and other cash and interest-earning investment balances. Spread-based assets is used in the calculation of our net interest margin .

Total trades — Revenue-generating client securities trades, which are executed by the Company’s broker-dealer subsidiaries, excluding trades processed for TD Waterhouse UK. Total trades are a significant source of the Company’s revenues. Such trades include, but are not limited to, trades in equities, options, futures, foreign exchange, mutual funds and debt instruments. Trades generate revenue from commissions, markups on riskless principal transactions in fixed income securities, transaction fees and/or revenue-sharing arrangements with market destinations (also known as “payment for order flow”).

Trading days — Days in which the U.S. equity markets are open for a full trading session. Reduced exchange trading sessions are treated as half trading days.

Transaction-based revenues — Revenues generated from client trade execution, consisting primarily of commissions, markups on riskless principal transactions in fixed income securities, transaction clearing fees and revenue sharing arrangements with market destinations (also known as “payment for order flow”).

RESULTS OF OPERATIONS

Conditions in the U.S. equity markets significantly impact the volume of our clients’ trading activity. There is a direct correlation between the volume of our clients’ trading activity and our results of operations. We cannot predict future trading volumes in the U.S. equity markets. If client trading activity increases, we expect that it would have a positive impact on our results of operations. If client trading activity declines, we expect that it would have a negative impact on our results of operations.

Changes in average balances, especially client margin, credit, insured deposit account and mutual fund balances, may significantly impact our results of operations. Changes in interest rates also significantly impact our results of operations. We seek to mitigate interest rate risk by aligning the average duration of our interest-earning assets with that of our interest-bearing liabilities. We cannot predict the direction of interest rates or the levels of client balances. If interest rates rise, we generally expect to earn a larger net interest spread. Conversely, a falling interest rate environment generally would result in our earning a smaller net interest spread.

Financial Performance Metrics

Pre-tax income, net income, earnings per share and EBITDA are key metrics we use in evaluating our financial performance. EBITDA is a non-GAAP financial measure.

We consider EBITDA to be an important measure of our financial performance and of our ability to generate cash flows to service debt, fund capital expenditures and fund other corporate investing and financing activities. EBITDA is used as the denominator in the consolidated leverage ratio calculation for covenant purposes under our holding company’s senior revolving credit facility. EBITDA eliminates the non-cash effect of tangible asset depreciation and amortization and intangible asset amortization. EBITDA should be considered in addition to, rather than as a substitute for, pre-tax income, net income and cash flows from operating activities.

The following table sets forth EBITDA in dollars and as a percentage of net revenues for the periods indicated, and provides reconciliations to net income, which is the most directly comparable GAAP measure (dollars in millions):


	Three months ended December 31,
	2012						2011
				% of Net						% of Net
	$			Revenue			$			Revenue
EBITDA	$	286			43.9	%	$	268			41.0	%
Less:
Depreciation and amortization		(20	)		(3.1	%)		(17	)		(2.6	%)
Amortization of acquired intangible assets		(23	)		(3.5	%)		(23	)		(3.5	%)
Interest on borrowings		(6	)		(0.9	%)		(7	)		(1.1	%)
Provision for income taxes		(90	)		(13.8	%)		(69	)		(10.6	%)

Net income	$	147			22.6	%	$	152			23.3	%

Our EBITDA increased 7% for the first quarter of fiscal 2013 compared to the first quarter of fiscal 2012, primarily due to a 4% decrease in operating expenses and a $2 million gain on the sale of an investment, partially offset by a slight decrease in net revenues. The decrease in operating expenses was primarily due to a 24% decrease in professional services expense, a 9% decrease in advertising expense and a 3% decrease in employee compensation and benefits expense, partially offset by a 20% increase in clearing and execution costs. The slight decrease in net revenues was due primarily to an 11% decrease in total client trades, partially offset by higher average commissions and transaction fees per trade and a 31% increase in average market fee-based investment balances. Detailed analysis of net revenues and operating expenses is presented later in this discussion.

Our diluted earnings per share was $0.27 for both the first quarter of fiscal 2013 and the first quarter of fiscal 2012. Higher EBITDA was more than offset by a higher effective income tax rate for the first quarter of fiscal 2013, resulting in a 3% decrease in net income compared to the first quarter of fiscal 2012. Our effective income tax rate for the first quarter of the prior year was significantly lower than normal due to $14 million of favorable resolutions of state income tax matters. This favorably impacted diluted EPS for the first quarter of the prior year by 2.5 cents per share. The decrease in net income for the first quarter of fiscal 2013 was partially offset by a 1% decrease in average diluted shares outstanding compared to the first quarter of the prior year.

Operating Metrics

Our largest sources of revenues are asset-based revenues and transaction-based revenues. For the first quarter of fiscal 2013, asset-based revenues and transaction-based revenues accounted for 58% and 39% of our net revenues, respectively. Asset-based revenues consist of (1) net interest revenue, (2) insured deposit account fees and (3) investment product fees. The primary factors driving our asset-based revenues are average balances and average rates. Average balances consist primarily of average client margin balances, average segregated cash balances, average client credit balances, average client insured deposit account balances, average fee-based investment balances and average securities borrowing and lending balances. Average rates consist of the average interest rates and fees earned and paid on such balances. The primary factors driving our transaction-based revenues are total client trades and average commissions and transaction fees per trade. We also consider client account and client asset metrics, although we believe they are generally of less significance to our results of operations for any particular period than our metrics for asset-based and transaction-based revenues.

Asset-Based Revenue Metrics

We calculate the return on our interest-earning assets and our insured deposit account balances using a measure we refer to as net interest margin. Net interest margin is calculated for a given period by dividing the annualized sum of net interest revenue and insured deposit account fees by average spread-based assets. Spread-based assets consist of client and brokerage-related asset balances, including client margin balances, segregated cash, insured deposit account balances, deposits paid on securities borrowing and other cash and interest-earning investment balances. The following table sets forth net interest margin and average spread-based assets (dollars in millions):


	Three months ended
	December 31,						Increase/
	2012			2011			(Decrease)
Avg. interest-earning assets	$	15,077		$	13,847		$	1,230
Avg. insured deposit account balances		64,198			58,755			5,443

Avg. spread-based balances	$	79,275		$	72,602		$	6,673


Net interest revenue	$	116		$	109		$	7
Insured deposit account fee revenue		205			205			—

Spread-based revenue	$	321		$	314		$	7


Avg. annualized yield - interest-earning assets		3.02	%		3.09	%		(0.07	%)
Avg. annualized yield - insured deposit account fees		1.25	%		1.37	%		(0.12	%)
Net interest margin (NIM)		1.58	%		1.69	%		(0.11	%)

The following tables set forth key metrics that we use in analyzing net interest revenue, which is a component of net interest margin (dollars in millions):


	Interest Revenue (Expense)
	Three months ended
	December 31,				Increase/
	2012		2011		(Decrease)
Segregated cash	$	2	$	—	$	2
Client margin balances		89		85		4
Securities lending/borrowing, net		25		24		1
Other cash and interest-earning investments		—		—		—
Client credit balances		—		—		—

Net interest revenue	$	116	$	109	$	7


	Average Balance
	Three months ended
	December 31,				%
	2012		2011		Change
Segregated cash	$	3,812	$	4,112		(7	%)
Client margin balances		8,700		7,727		13	%
Securities borrowing		849		571		49	%
Other cash and interest-earning investments		1,716		1,437		19	%

Interest-earning assets	$	15,077	$	13,847		9	%


Client credit balances	$	9,174	$	8,833		4	%
Securities lending		1,863		1,719		8	%

Interest-bearing liabilities	$	11,037	$	10,552		5	%


	Avg. Annualized Yield (Cost)
	Three months ended						Net Yield
	December 31,						Increase/
	2012			2011			(Decrease)
Segregated cash		0.17	%		0.04	%		0.13	%
Client margin balances		4.02	%		4.31	%		(0.29	%)
Other cash and interest-earning investments		0.07	%		0.12	%		(0.05	%)
Client credit balances		(0.01	%)		(0.02	%)		0.01	%
Net interest revenue		3.02	%		3.09	%		(0.07	%)

The following tables set forth key metrics that we use in analyzing investment product fee revenues (dollars in millions):


	Fee Revenue
	Three months ended
	December 31,				Increase/
	2012		2011		(Decrease)
Money market mutual fund	$	1	$	1	$	—
Market fee-based investment balances		55		43		12

Total investment product fees	$	56	$	44	$	12


	Average Balance
	Three months ended
	December 31,				%
	2012		2011		Change
Money market mutual fund	$	5,044	$	5,721	(12%)
Market fee-based investment balances		94,940		72,201	31%

Total fee-based investment balances	$	99,984	$	77,922	28%


	Average Annualized Yield
	Three months ended
	December 31,				Increase/
	2012		2011		(Decrease)
Money market mutual fund		0.05%		0.08%	(0.03%)
Market fee-based investment balances		0.23%		0.23%	0.00%
Total investment product fees		0.22%		0.22%	0.00%

Transaction-Based Revenue Metrics

The following table sets forth several key metrics regarding client trading activity, which we utilize in measuring and evaluating performance and the results of our operations:


	Three months ended
	December 31,						%
	2012			2011			Change
Total trades (in millions)		20.38			22.97			(11	%)
Average commissions and transaction fees per trade ⁽¹⁾	$	12.62		$	11.90			6	%
Average client trades per day		334,035			367,479			(9	%)
Average client trades per funded account (annualized)		14.3			16.3			(12	%)
Activity rate - funded accounts		5.8	%		6.5	%		(11	%)
Trading days		61.0			62.5			(2	%)

(1)	Average commissions and transaction fees per trade excludes the TD Waterhouse UK business.

Client Account and Client Asset Metrics

The following table sets forth certain metrics regarding client accounts and client assets, which we use to analyze growth and trends in our client base:


	Three months ended
	December 31,						%
	2012			2011			Change
New accounts opened		174,000			140,000			24	%

Funded accounts (beginning of period)		5,764,000			5,617,000			3	%
Funded accounts (end of period)		5,836,000			5,645,000			3	%
Percentage change during period		1	%		0	%

Client assets (beginning of period, in billions)	$	472.3		$	378.7			25	%
Client assets (end of period, in billions)	$	480.8		$	406.3			18	%
Percentage change during period		2	%		7	%

Net new assets (in billions)	$	15.6		$	10.2			53	%
Net new assets annualized growth rate ⁽¹⁾		13	%		11	%

(1)	Annualized net new assets as a percentage of client assets as of the beginning of the period.

Condensed Consolidated Statements of Income Data

The following table summarizes certain data from our Condensed Consolidated Statements of Income for analysis purposes (dollars in millions):


	Three months ended
	December 31,						%
	2012			2011			Change
Revenues:
Transaction-based revenues:
Commissions and transaction fees	$	257		$	273			(6	%)
Asset-based revenues:
Interest revenue		118			111			6	%
Brokerage interest expense		(2	)		(2	)		0	%

Net interest revenue		116			109			6	%

Insured deposit account fees		205			205			0	%
Investment product fees		56			44			27	%

Total asset-based revenues		377			358			5	%

Other revenues		17			22			(23	%)

Net revenues		651			653			(0	%)

Operating expenses:
Employee compensation and benefits		168			173			(3	%)
Clearing and execution costs		24			20			20	%
Communications		28			28			0	%
Occupancy and equipment costs		39			38			3	%
Depreciation and amortization		20			17			18	%
Amortization of acquired intangible assets		23			23			0	%
Professional services		34			45			(24	%)
Advertising		52			57			(9	%)
Other		22			24			(8	%)

Total operating expenses		410			425			(4	%)

Operating income		241			228			6	%

Other expense (income):
Interest on borrowings		6			7			(14	%)
Gain on sale of investments		(2	)		—			N/A

Total other expense (income)		4			7			(43	%)

Pre-tax income		237			221			7	%
Provision for income taxes		90			69			30	%

Net income	$	147		$	152			(3	%)

Other information:
Effective income tax rate		38.0	%		31.2	%
Average debt outstanding	$	1,186.8		$	1,259.1			(6	%)
Average interest rate incurred on borrowings		2.10	%		2.07	%

Three-Month Periods Ended December 31, 2012 and 2011

Net Revenues

Commissions and transaction fees decreased 6% to $257 million, primarily due to decreased client trading activity, partially offset by higher average commissions and transaction fees per trade. Total trades decreased 11%, as average client trades per day decreased 9% to 334,035 for the first quarter of fiscal 2013 compared to 367,479 for the first quarter of fiscal 2012, and there were 1.5 fewer trading days during the first quarter of fiscal 2013 compared to the first quarter of fiscal 2012. Two trading days were lost during the first quarter of fiscal 2013 due to unscheduled market closures resulting from Superstorm Sandy. Average client trades per funded account (annualized) were 14.3 for the first quarter of fiscal 2013 compared to 16.3 for the first quarter of fiscal 2012. Average commissions and transaction fees per trade increased to $12.62 for the first quarter of fiscal 2013 from $11.90 for the first quarter of fiscal 2012, primarily due to higher payment for order flow revenue per trade and a higher percentage of option trades, which earn higher average commissions and transaction fees per trade.

Asset-based revenues, which consists of net interest revenue, insured deposit account fees and investment product fees, increased 5% to $377 million for the first quarter of fiscal 2013, primarily due to a 31% increase in average market fee-based investment balances and an 8% increase in average spread-based assets, partially offset by a decrease of 11 basis points in the net interest margin earned on spread-based assets. Our net interest margin was 1.58% for the first quarter of fiscal 2013, compared to 1.69% for the first quarter of the prior year. The following paragraphs provide further analysis of the components of asset-based revenues.

Net interest revenue increased 6% to $116 million, due primarily to a 13% increase in average client margin balances, an increase of 13 basis points in the average yield earned on segregated cash balances and a $1 million increase in net interest revenue from our securities borrowing/lending program, partially offset by a decrease of 29 basis points in the average yield earned on client margin balances for the first quarter of fiscal 2013 compared to the first quarter of fiscal 2012.

Insured deposit account fees were $205 million for the first quarter of both fiscal 2013 and 2012. A 9% increase in average client IDA balances was offset by a decrease of 12 basis points in the average yield earned on the IDA assets during the first quarter of fiscal 2013 compared to the first quarter of fiscal 2012. We expect that, absent an increase in interest rates, the average yield earned on IDA assets will continue to decrease somewhat, as investments in the IDA portfolio mature and are reinvested at lower rates. The expected decrease in the average yield earned on IDA assets will be mitigated somewhat by the terms of the new IDA agreement, which became effective as of January 1, 2013. We expect that, compared to the old IDA agreement, the new IDA agreement will improve the average yield earned on the IDA assets during a low interest rate environment, due to lower servicing fees on floating-rate and short-term fixed rate assets in the IDA portfolio. For more information about the new IDA agreement, please see Note 10 – RELATED PARTY TRANSACTIONS under Item 1, Financial Statements – Notes to Condensed Consolidated Financial Statements. The increased IDA balances are partly due to our success in attracting net new client assets over the past year and partly due to our strategy of migrating client cash held in client credit balances or swept to money market mutual funds to the IDA offering. During the first quarter of fiscal 2012, we moved approximately $3 billion of client cash out of money market mutual funds, consisting of approximately $1 billion that was moved directly to insured deposit accounts and $2 billion that was initially moved to client credit balances and was subsequently moved to insured deposit accounts during the third quarter of fiscal 2012. We expect our migration strategy to position the Company to earn higher net revenues, as we generally earn a higher yield on IDA balances than on money market mutual fund or client credit balances.

Investment product fees increased 27% to $56 million, primarily due to a 31% increase in average market fee-based investment balances for the first quarter of fiscal 2013 compared to the first quarter of fiscal 2012.

Other revenues decreased 23% to $17 million, due primarily to lower client education revenue, partially offset by increased fees from processing corporate securities reorganizations for the first quarter of fiscal 2013 compared to the first quarter of fiscal 2012.

Operating Expenses

Employee compensation and benefits expense decreased 3% to $168 million, primarily due to a decrease in severance costs related to staff reductions during the first quarter of the prior year.

Clearing and execution costs increased 20% to $24 million, primarily due to a favorable adjustment during the first quarter of the prior year related to the thinkorswim clearing conversion and higher futures execution costs during the first quarter of fiscal 2013 due to increased client futures trading activity.

Depreciation and amortization increased 18% to $20 million, primarily due to depreciation on recent technology infrastructure upgrades and leasehold improvements.

Professional services decreased 24% to $34 million, primarily due to lower usage of consulting and contract services during the first quarter of fiscal 2013 compared to the first quarter of fiscal 2012.

Advertising expense decreased 9% to $52 million, primarily due to lower investor education promotion costs during the first quarter of fiscal 2013 compared to the first quarter of fiscal 2012. We generally adjust our level of advertising spending in relation to stock market activity and other market conditions in an effort to maximize the number of new accounts while minimizing the advertising cost per new account. We find trading volumes in the stock market to be an effective indicator of self-directed investor engagement. When self-directed investors are actively engaged in the stock market, we tend to experience more success with our advertising, resulting in a lower cost per new account. We also find that self-directed investors tend to demonstrate more interest in financial products and services during certain times of the year, such as in the months immediately preceding the annual April tax filing deadline, and less interest during certain other times, such as the summer months. In addition, in periods when advertising market demand is weak, we may adjust our spending to take advantage of attractive advertising rates.

Income Taxes

Our effective income tax rate was 38.0% for the first quarter of fiscal 2013, compared to 31.2% for the first quarter of fiscal 2012. The effective tax rate for the first quarter of fiscal 2012 was significantly lower than normal due to $14 million of favorable resolutions of state income tax matters. This favorably impacted the Company’s earnings for the first quarter of fiscal 2012 by approximately 2.5 cents per share. We expect our effective income tax rate to range from 38% to 39% for the remainder of fiscal 2013, excluding the effect of any adjustments related to remeasurement or resolution of uncertain tax positions. However, we expect to experience some volatility in our quarterly and annual effective income tax rate because current accounting rules for uncertain tax positions require that any change in measurement of a tax position taken in a prior tax year be recognized as a discrete event in the period in which the change occurs.

LIQUIDITY AND CAPITAL RESOURCES

As a holding company, TD Ameritrade Holding Corporation conducts substantially all of its business through its operating subsidiaries, principally its broker-dealer subsidiaries.

We have historically financed our liquidity and capital needs primarily through the use of funds generated from subsidiary operations and from borrowings under our credit agreements. We have also issued common stock and long-term debt to finance mergers and acquisitions and for other corporate purposes. Our liquidity needs during the first quarter of fiscal 2013 were financed primarily from our subsidiaries’ earnings, cash on hand and our parent company’s revolving credit facility. We repaid $250 million of 2.950% Senior Notes due December 1, 2012 with cash on hand. We financed our payment of a $0.50 per share special cash dividend on December 31, 2012 by borrowing $275 million on our parent company’s revolving credit facility. We plan to finance our operational capital and liquidity needs during the remainder of fiscal 2013 primarily from our subsidiaries’ earnings, cash on hand and, if necessary, borrowings on our parent company and broker-dealer revolving credit facilities.

Dividends from our subsidiaries are the primary source of liquidity for the parent company. Some of our subsidiaries are subject to requirements of the Securities and Exchange Commission (“SEC”), the Financial Industry Regulatory Authority (“FINRA”), the Commodity Futures Trading Commission (“CFTC”), the National Futures Association (“NFA”) and other regulators relating to liquidity, capital standards and the use of client funds and securities, which may limit funds available for the payment of dividends to the parent company.

Broker-dealer Subsidiaries

Our broker-dealer subsidiaries are subject to regulatory requirements that are intended to ensure their liquidity and general financial soundness. Under the SEC’s Uniform Net Capital Rule (Rule 15c3-1 under the Securities Exchange Act of 1934, or the “Exchange Act”), our broker-dealer subsidiaries are required to maintain, at all times, at least the minimum level of net capital required under Rule 15c3-1. For our clearing broker-dealer subsidiary, this minimum net capital level is determined by a calculation described in Rule 15c3-1 that is primarily based on the broker-dealer’s “aggregate debits,” which primarily are a function of client margin balances at the clearing broker-dealer. Since our aggregate debits may fluctuate significantly, our minimum net capital requirements may also fluctuate significantly from period to period. The parent company may make cash capital contributions to our broker-dealer subsidiaries, if necessary, to meet minimum net capital requirements.

Each of our broker-dealer subsidiaries may not repay any subordinated borrowings, pay cash dividends or make any unsecured advances or loans to its parent company or employees if such payment would result in a net capital amount of (a) less than 5% of aggregate debit balances, (b) less than 110% of its risk-based capital requirement under CFTC Regulation 1.17 or (c) less than 120% of its minimum dollar requirement. These net capital thresholds, which are specified in Rule 17a-11 under the Exchange Act and CFTC Regulation 1.12, are typically referred to as “early warning” net capital thresholds. As of December 31, 2012, our clearing and introducing broker-dealer subsidiaries had $1,153 million and $249 million of net capital, respectively, which exceeded the early warning net capital thresholds by $644 million and $243 million, respectively.

Our clearing broker-dealer subsidiary, TD Ameritrade Clearing, Inc. (“TDAC”), engages in such activities as settling client securities transactions with clearinghouses, extending credit to clients through margin lending, securities lending and borrowing transactions and processing client cash sweep transactions to and from insured deposit accounts and money market mutual funds. These types of broker-dealer activities require active daily liquidity management.

Most of TDAC’s assets are readily convertible to cash, consisting primarily of cash and investments segregated for the exclusive benefit of clients, receivables from clients and receivables from brokers, dealers and clearing organizations. Cash and investments segregated for the exclusive benefit of clients may be held in cash, reverse repurchase agreements (collateralized by U.S. Treasury securities), U.S. Treasury securities and other qualified securities. Receivables from clients consist of margin loans, which are demand loan obligations secured by readily marketable securities. Receivables from brokers, dealers and clearing organizations primarily arise from current open transactions, which usually settle or can be settled within a few business days.

TDAC is subject to cash deposit and collateral requirements with clearinghouses such as the Depository Trust & Clearing Corporation (“DTCC”) and the Options Clearing Corporation (“OCC”), which may fluctuate significantly from time to time based on the nature and size of our clients’ trading activity. As of December 31, 2012, TDAC had $173 million of cash deposited with clearing organizations for the clearing of client equity and option trades.

TDAC’s liquidity needs relating to client trading and margin borrowing are met primarily through cash balances in client brokerage accounts, which were $11.8 billion as of December 31, 2012. Cash balances in client brokerage accounts not used for client trading and margin borrowing activity are not generally available for other liquidity purposes and must be segregated for the exclusive benefit of clients under Rule 15c3-3 of the Exchange Act. At December 31, 2012, TDAC had $4.6 billion of cash and investments segregated in special reserve bank accounts for the exclusive benefit of clients under Rule 15c3-3.

For general liquidity needs, TDAC also maintains a senior unsecured revolving credit facility in an aggregate principal amount of $300 million. There were no borrowings outstanding on this facility as of December 31, 2012.

Liquid Assets

We consider our liquid assets metrics to be important measures of our liquidity and of our ability to fund corporate investing and financing activities. Our liquid assets metrics are considered non-GAAP financial measures. We include the excess capital of our broker-dealer and trust company subsidiaries in the calculation of our liquid assets metrics, rather than simply including broker-dealer and trust company cash and cash equivalents, because capital requirements may limit the amount of cash available for dividend from the broker-dealer and trust company subsidiaries to the parent company. Excess capital, as defined below, is generally available for dividend from the broker-dealer and trust company subsidiaries to the parent company. The liquid assets metrics should be considered as supplemental measures of liquidity, rather than as substitutes for cash and cash equivalents.

We define “liquid assets—management target” as the sum of (a) corporate cash and cash equivalents, (b) corporate short-term investments and (c) regulatory net capital of (i) our clearing broker-dealer subsidiary in excess of 10% of aggregate debit items and (ii) our introducing broker-dealer subsidiaries in excess of a minimum operational target established by management ($50 million in the case of our primary introducing broker-dealer, TD Ameritrade, Inc.). “Liquid assets – management target” is based on more conservative measures of broker-dealer net capital than “liquid assets – regulatory threshold” (defined below) because we prefer to maintain significantly more conservative levels of net capital at the broker-dealer subsidiaries than the regulatory thresholds require. We consider “liquid assets—management target” to be a measure that reflects our liquidity that would be readily available for corporate investing or financing activities under normal operating circumstances.

We define “liquid assets—regulatory threshold” as the sum of (a) corporate cash and cash equivalents, (b) corporate short-term investments, (c) regulatory net capital of (i) our clearing broker-dealer subsidiary in excess of 5% of aggregate debit items and (ii) our introducing broker-dealer subsidiaries in excess of the applicable “early warning” net capital requirement and (d) Tier 1 capital of our trust company in excess of the minimum dollar requirement. For more information about the regulatory capital requirements of our broker-dealer and trust subsidiaries, please see Note 6 – CAPITAL REQUIREMENTS under Item 1,

Financial Statements – Notes to Condensed Consolidated Financial Statements. We consider “liquid assets—regulatory threshold” to be a measure that reflects our liquidity that would be available for corporate investing or financing activities under unusual operating circumstances, such as the need to provide funding for significant strategic business transactions.

The following table sets forth a reconciliation of cash and cash equivalents, which is the most directly comparable GAAP measure, to our liquid assets metrics (dollars in millions):


	Liquid Assets - Management Target									Liquid Assets - Regulatory Threshold
	Dec. 31,			Sept. 30,						Dec. 31,			Sept. 30,
	2012			2012			Change			2012			2012			Change
Cash and cash equivalents	$	1,852		$	915		$	937		$	1,852		$	915		$	937

Less: Broker-dealer cash and cash equivalents		(841	)		(406	)		(435	)		(841	)		(406	)		(435	)
Trust company cash and cash equivalents		(556	)		(95	)		(461	)		(556	)		(95	)		(461	)
Investment advisory cash and cash equivalents		(15	)		(11	)		(4	)		(15	)		(11	)		(4	)

Corporate cash and cash equivalents		440			403			37			440			403			37

Plus: Corporate short-term investments		—			150			(150	)		—			150			(150	)
Excess trust company Tier 1 capital		—			—			—			10			10			—
Excess broker-dealer regulatory net capital		334			501			(167	)		887			1,048			(161	)


Liquid assets	$	774		$	1,054		$	(280	)	$	1,337		$	1,611		$	(274	)

The decrease in liquid assets is summarized as follows (dollars in millions):


	Liquid Assets
	Management Target			Regulatory Threshold
Liquid assets as of September 30, 2012	$	1,054		$	1,611

Plus: EBITDA ⁽¹⁾		286			286
Proceeds from exercise of stock options		6			6
Proceeds from the sale of investments		3			3
Proceeds from notes payable		275			275

Less: Income taxes paid		(100	)		(100	)
Interest paid		(8	)		(8	)
Purchase of property and equipment		(46	)		(46	)
Principal payments on long-term debt		(250	)		(250	)
Payment of cash dividends		(323	)		(323	)
Purchase of treasury stock		(4	)		(4	)
Principal payments on capital lease obligations		(1	)		(1	)
Additional net capital requirement due to increase in aggregate debits		(4	)		(3	)
Other changes in working capital and regulatory net capital		(114	)		(109	)


Liquid assets as of December 31, 2012	$	774		$	1,337

(1)	See “Financial Performance Metrics” earlier in this section for a description of EBITDA.

Loan Facilities

Senior Notes – During December 2012, we repaid our $250 million of 2.950% Senior Notes due December 1, 2012 with cash on hand.

TD Ameritrade Holding Corporation Credit Agreement – On December 28, 2012, we borrowed $275 million under the TD Ameritrade Holding Corporation (the “Parent”) senior unsecured revolving credit facility (the “Parent Revolving Facility”). We used the proceeds to fund a $0.50 per share special cash dividend, paid on our common stock on December 31, 2012. As of December 31, 2012, there was $275 million of borrowings outstanding under the Parent Revolving Facility. The maturity date of the Parent Revolving Facility is June 28, 2014. Interest is payable monthly based on one-month LIBOR plus an interest rate margin. As of December 31, 2012, the interest rate margin was 1.50%, determined by reference to the Parent’s public debt ratings, and the interest rate was 1.71%.

Cash Dividends

We declared a $0.09 per share quarterly cash dividend and a $0.50 per share special cash dividend on our common stock during the first quarter of fiscal 2013. We paid a total of $323 million to fund these dividends during the first quarter of fiscal 2013. We also declared a $0.09 per share quarterly cash dividend on our common stock during the second quarter of fiscal 2013. We expect to pay approximately $49 million on February 15, 2013 to fund the second quarter dividend.

OFF-BALANCE SHEET ARRANGEMENTS

We enter into guarantees and other off-balance sheet arrangements in the ordinary course of business, primarily to meet the needs of our clients and manage our asset-based revenues. For information on these arrangements, see the following sections under Item 1, Financial Statements – Notes to Condensed Consolidated Financial Statements: “General Contingencies” and “Guarantees” under Note 7 – COMMITMENTS AND CONTINGENCIES and “Insured Deposit Account Agreement” under Note 10 – RELATED PARTY TRANSACTIONS. The IDA agreement accounts for a significant percentage of our net revenues (31% of our net revenues for the first quarter of fiscal 2013) and enables our clients to invest in an FDIC-insured deposit product without the need for the Company to establish the significant levels of capital that would be required to maintain our own bank charter.

Item 3. - Quantitative and Qualitative Disclosures about Market Risk

Market risk generally represents the risk of loss that may result from the potential change in the value of a financial instrument as a result of fluctuations in interest rates and market prices. We have established policies, procedures and internal processes governing our management of market risks in the normal course of our business operations.

Market-related Credit Risk

Two primary sources of credit risk inherent in our business are (1) client credit risk related to margin lending and leverage and (2) counterparty credit risk related to securities lending and borrowing. We manage risk on client margin lending and leverage by requiring clients to maintain margin collateral in compliance with regulatory and internal guidelines. The risks associated with margin lending and leverage increase during periods of rapid market movements, or in cases where leverage or collateral is concentrated and market movements occur. We monitor required margin levels daily and, pursuant to such guidelines, require our clients to deposit additional collateral, or to reduce positions, when necessary. We continuously monitor client accounts to detect excessive concentration, large orders or positions, patterns of day trading and other activities that indicate increased risk to us. We manage risks associated with our securities lending and borrowing activities by requiring credit approvals for counterparties, by monitoring the market value of securities loaned and collateral values for securities borrowed on a daily basis and requiring additional cash as collateral for securities loaned or return of collateral for securities borrowed when necessary, and by participating in a risk-sharing program offered through the Options Clearing Corporation.

The interest rate swaps on our Senior Notes are subject to counterparty credit risk. Credit risk on derivative financial instruments is managed by limiting activity to approved counterparties that meet a minimum credit rating threshold and by entering into credit support agreements. The bilateral credit support agreements related to the interest rate swaps require daily collateral coverage, in the form of cash or U.S. Treasury securities, for the aggregate fair value of the interest rate swaps.

Interest Rate Risk

As a fundamental part of our brokerage business, we invest in interest-earning assets and are obligated on interest-bearing liabilities. In addition, we earn fees on our insured deposit account arrangement with TD Bank USA, N.A. and TD Bank, N.A. and on money market mutual funds, which are subject to interest rate risk. Changes in interest rates could affect the interest earned on assets differently than interest paid on liabilities. A rising interest rate environment generally results in our earning a larger net interest spread. Conversely, a falling interest rate environment generally results in our earning a smaller net interest spread.

Our most prevalent form of interest rate risk is referred to as “gap” risk. This risk occurs when the interest rates we earn on our assets change at a different frequency or amount than the interest rates we pay on our liabilities. We have an Asset/Liability Committee as the governance body with the responsibility of managing interest rate risk, including gap risk.

We use net interest simulation modeling techniques to evaluate the effect that changes in interest rates might have on pre-tax income. Our model includes all interest-sensitive assets and liabilities of the Company and interest-sensitive assets and liabilities associated with the insured deposit account arrangement. The simulations involve assumptions that are inherently uncertain and, as a result, cannot precisely predict the impact that changes in interest rates will have on pre-tax income. Actual results may differ from simulated results due to differences in timing and frequency of rate changes, changes in market conditions and changes in management strategy that lead to changes in the mix of interest-sensitive assets and liabilities.

The simulations assume that the asset and liability structure of our Condensed Consolidated Balance Sheet and the insured deposit account arrangement would not be changed as a result of a simulated change in interest rates. The simulations also reflect the IDA fee calculation methodology of the new IDA agreement, which became effective January 1, 2013 (see Note 10 – RELATED PARTY TRANSACTIONS under Item 1, Financial Statements – Notes to Condensed Consolidated Financial Statements for more information about the new IDA agreement). The results of the simulations based on our financial position as of December 31, 2012 indicate that a gradual 1% (100 basis points) increase in interest rates over a 12-month period would result in approximately $126 million higher pre-tax income, while a gradual 1% (100 basis points) decrease in interest rates over a 12-month period would result in approximately $52 million lower pre-tax income. The results of the simulations reflect the fact that short-term interest rates remain at historically low levels, including the federal funds target rate, which is currently a range of zero to 0.25%.

Other Market Risks

Substantially all of our revenues and financial instruments are denominated in U.S. dollars. We generally do not enter into derivative transactions, except for hedging purposes.

Item 4. – Controls and Procedures

Disclosure Controls and Procedures

Management, including the Chief Executive Officer and Chief Financial Officer, performed an evaluation of the effectiveness of the Company’s disclosure controls and procedures as of December 31, 2012. Management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective as of December 31, 2012.

Changes in Internal Control over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting during the most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Part II - OTHER INFORMATION

Item 1. – Legal Proceedings

The Company estimates that its clients’ current aggregate shortfall, based on the original par value of their holdings in the Yield Plus Fund, less the value of fund distributions to date and payments to clients under the SEC settlement, is approximately $36 million. This amount does not take into account any assets remaining in the fund that may become available for future distributions.

Item 1A. – Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed under Item 1A— “Risk Factors” in our annual report on Form 10-K, as amended, for the year ended September 30, 2012, which could materially affect our business, financial condition or future results of operations. The risks described in our Form 10-K are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or results of operations.

There have been no material changes from the risk factors disclosed in the Company’s Form 10-K, as amended, for the fiscal year ended September 30, 2012.

Item 2.—Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities


ISSUER PURCHASES OF EQUITY SECURITIES
					Total Number of		Maximum Number
	Total Number		Average		Shares Purchased as		of Shares that May
	of Shares		Price Paid		Part of Publicly		Yet Be Purchased
Period	Purchased		per Share		Announced Program		Under the Program
October 1, 2012 - October 31, 2012		106,119	$	15.87		—		24,920,000
November 1, 2012 - November 30, 2012		82,309	$	15.90		—		24,920,000
December 1, 2012 - December 31, 2012		37,500	$	16.17		—		24,920,000

Total - Three months ended December 31, 2012		225,928	$	15.93		—		24,920,000

On October 20, 2011, our board of directors authorized the repurchase of up to 30 million shares of our common stock. We disclosed this authorization on November 18, 2011 in our annual report on Form 10-K. This program was the only stock repurchase program in effect and no programs expired during the first quarter of fiscal 2013.

During the quarter ended December 31, 2012, 225,928 shares were repurchased from employees for income tax withholding in connection with distributions of stock-based compensation.

Item 6. – Exhibits

3.1

Amended and Restated Certificate of Incorporation of TD Ameritrade Holding Corporation, dated January 24, 2006 (incorporated by reference to Exhibit 3.1 of the Company’s Form 8-K filed on January 27, 2006)

3.2

Amended and Restated By-Laws of TD Ameritrade Holding Corporation, effective March 9, 2006 (incorporated by reference to Exhibit 3.1 of the Company’s Form 8-K filed on March 15, 2006)

4.1

First Supplemental Indenture, dated November 25, 2009, among TD Ameritrade Holding Corporation, TD Ameritrade Online Holdings Corp., as guarantor, and The Bank of New York Mellon Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.1 of the Company’s Form 8-K filed on November 25, 2009)

4.2

Form of 4.150% Senior Note due 2014 (included in Exhibit 4.1)

4.3

Form of 5.600% Senior Note due 2019 (included in Exhibit 4.1)

10.1*

Insured Deposit Account Agreement, effective as of January 1, 2013, among TD Bank USA, N.A., TD Bank, N.A., The Toronto-Dominion Bank, TD Ameritrade, Inc., TD Ameritrade Clearing, Inc. and TD Ameritrade Trust Company

10.2

Amendment to Employment Agreement, executed on December 19, 2012, between Fredric J. Tomczyk and TD Ameritrade Holding Corporation

10.3

Amendment to Executive Employment Term Sheet, executed on December 19, 2012, between Marvin W. Adams and TD Ameritrade Holding Corporation

10.4

Amendment to Employment Agreement, executed on December 20, 2012, between Ellen L.S. Koplow and TD Ameritrade Holding Corporation

10.5

Form of Restricted Stock Unit Agreement for Fredric J. Tomczyk

10.6

Form of Restricted Stock Unit Agreement for Marvin W. Adams (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed on November 20, 2012)

10.7

Form of Restricted Stock Unit Agreement for Employees (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed on October 26, 2012)

15.1

Awareness Letter of Independent Registered Public Accounting Firm

31.1

Certification of Fredric J. Tomczyk, Principal Executive Officer, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2

Certification of William J. Gerber, Principal Financial Officer, as required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1

Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS

XBRL Instance Document

101.SCH

XBRL Taxonomy Extension Schema

101.CAL

XBRL Taxonomy Extension Calculation

101.LAB

XBRL Taxonomy Extension Label

101.PRE

XBRL Taxonomy Extension Presentation

101.DEF

XBRL Taxonomy Extension Definition

Confidential treatment has been requested with respect to the omitted portions of this Exhibit, which portions have been filed separately with the Securities and Exchange Commission.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: February 6, 2013


TD Ameritrade Holding Corporation (Registrant)

By:		/ S / FREDRIC J. TOMCZYK
		Fredric J. Tomczyk
		President and Chief Executive Officer (Principal Executive Officer)

By:		/ S / WILLIAM J. GERBER
		William J. Gerber
		Executive Vice President, Chief Financial Officer (Principal Financial and Accounting Officer)

Exhibit 10.1

CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT. PORTIONS FOR

WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED BY [CONFIDENTIAL

TREATMENT REQUESTED]. MATERIAL OMITTED HAS BEEN FILED SEPARATELY

WITH THE SECURITIES AND EXCHANGE COMMISSION.

INSURED DEPOSIT ACCOUNT AGREEMENT

by and among

TD BANK USA, NATIONAL ASSOCIATION,

TD BANK, NATIONAL ASSOCIATION,

TD AMERITRADE, INC.,

TD AMERITRADE CLEARING, INC.,

TD AMERITRADE TRUST COMPANY

and solely for purposes of Sections 7(b), 14 and 15(c),

THE TORONTO-DOMINION BANK

Effective as of January 1, 2013

T ABLE OF C ONTENTS


	Page
Roles		5
Terms and Conditions of the Customer Accounts		6
Procedures for Establishment of, and Deposits to, the Master Accounts		7
Interest Rate on Deposits		7
Fees; Related Matters		8
Liquidity Reserve Requirements		12
Allocation of Deposits		14
Withdrawals from and Closure of a Master Account		15
Registration at the Depository Institutions		15
Books and Records Concerning the Master Accounts		16
Representations and Warranties of TDA		18
Representations and Warranties of TDAC and TDATC		18
Representations and Warranties of the Depository Institutions		20
Representation and Warranty of TD Parent		21
General Covenants		21
Master Account Description, Statements and Disclosures		24
Indemnification		25
Termination; Related Procedures		26
Survival		29
Confidentiality		29
Notices		31
Expenses		33
Governing Law		33
Assignment		33
Court Fees and Damages		33
Entire Agreement		33
Invalidity		34
Counterparts		34
Headings		34
References to Statutes, Rules or Regulations		34
Gramm-Leach-Bliley Compliance and Related Matters		34


Litigation			35
No Recourse to TDA, TDAC or TDATC			35
Business Continuity Plan			36
Amendments			36
Benefit of the Parties			36
No Agency			36
No Waiver			36
Amendment and Restatement of Prior Agreements			37
Authorized Representative of Ameritrade Companies			37

Exhibits


Exhibit A		Certain Calculations

Exhibit B		Service Fee Matters

Exhibit C		Tax-Exempt Municipal Bond Tax Benefit Calculation

Exhibit D		Economic Replacement Value Calculation

Exhibit E		Methodology for Calculating Applicable FDIC Deposit Insurance Premium Assessments

I NDEX OF D EFINED T ERMS


Term		Location of Definition

Affiliate		Recitals
Agreement		Preamble
Ameritrade Companies		Preamble
BCP		36
Business Day		3(c)
Customer Data		31(b)
CMS Agreement		26
Confidental Information		20(a)
Customer Accounts		Recitals
Customers		Recitals
Depository Institutions		Preamble
Economic Replacement Value		5(c)
FDIC		Recitals
Federal Reserve		6(a)
Indemnitee		17(c)
Indemnitor		17(c)
Initial Expiration Date		18(a)
Internal Revenue Code		14(h)
Liquid Investments		6(b)
Liquidity Deficency Event		6(c)
Liquidity Reserve Level		6(a)
Marketing Fee		5(a)
Master Accounts		Recitals
Money Market Deposit Accounts		Recitals
Notional Investments		5(b)
OCC		6(a)
OSFI		6(a)
Permitted Notional Investments		5(b)(ii)
Regulation D		10(b)
Service Fee		5(a)
TD Bank USA		Preamble
TD Bank		Preamble
TD Parent		Preamble
TDA		Preamble
TDAC Customer Account		Recitals
TDAC Customers		Recitals
TDAC Master Accounts		Recitals
TDAC		Preamble
TDATC Customer Account		Recitals
TDATC Customers		Recitals
TDATC Master Accounts		Recitals
TDATC		Preamble
U.S. Money Laundering and Investor Identification Requirements		10(h)

INSURED DEPOSIT ACCOUNT AGREEMENT

This Insured Deposit Account Agreement, effective as of January 1, 2013 (as amended, supplemented, restated or otherwise modified from time to time, this “Agreement”), is by and among TD Bank USA, National Association, a national bank with its main office in the State of Maine (“TD Bank USA”), TD Bank, National Association, a national bank with its main office in the State of Delaware (“TD Bank,” and together with TD Bank USA, the “Depository Institutions”), TD Ameritrade, Inc., a corporation incorporated under the laws of the State of New York (“TDA”), TD Ameritrade Clearing, Inc., a corporation incorporated under the laws of the State of Nebraska (“TDAC”), TD Ameritrade Trust Company, a non-depository trust company duly incorporated in the State of Maine (“TDATC,” and together with TDA and TDAC, the “Ameritrade Companies”), and solely with respect to Sections 7(b), 14 and 15(c), The Toronto-Dominion Bank, a Canadian chartered bank (“TD Parent”).

Recitals

WHEREAS, the Depository Institutions accept savings deposits, as that term is defined in 12 C.F.R. Section 204.2(d)(2), including money market deposit accounts (the “Money Market Deposit Accounts”), on a regular and continuous basis;

WHEREAS, certain of the parties hereto were parties to an Amended and Restated Money Market Deposit Account Agreement, dated as of August 2, 2006, and, subsequent thereto, an Insured Deposit Account Agreement, dated as of December 19, 2009, which agreements are replaced and superseded by this Agreement;

WHEREAS, TDA desires to make the Money Market Deposit Accounts available, either as a designated Money Market Deposit Account sweep vehicle or as a non-sweep deposit account to its customers whose accounts are cleared by TDAC (such customers, the “TDAC Customers”);

WHEREAS, TDATC desires to make the Money Market Deposit Accounts available as a designated Money Market Deposit Account sweep vehicle to its customers (such customers, the “TDATC Customers” and, together with the TDAC Customers, the “Customers”);

WHEREAS, pursuant to this Agreement, one or more omnibus Money Market Deposit Accounts representing individual Money Market Deposit Accounts of TDAC Customers will be established and maintained at the Depository Institutions in the name of TDAC as agent and custodian for its customers, including those TDAC Customers that are trust agents, nominees, custodians or other representatives of others (“TDAC Master Accounts”) as described hereunder;

WHEREAS, pursuant to this Agreement, one or more omnibus Money Market Deposit Accounts representing individual Money Market Deposit Accounts of TDATC Customers will be established and maintained at TD Bank USA in the name of TDATC as agent and custodian for its customers, including those TDATC Customers that are trust agents, nominees, custodians or other representatives of others (“TDATC Master Accounts” and together with the TDAC Master Accounts, the “Master Accounts”) as described hereunder;

WHEREAS, TDAC will act as agent and recordkeeper with respect to certain books and records relating to the TDAC Customers’ individual Money Market Deposit Accounts represented by the TDAC Master Accounts (each, a “TDAC Customer Account”) and will maintain its deposit account records to reflect at all times the existence of a relationship that serves as the basis for federal deposit insurance of such TDAC Customer Accounts by the Federal Deposit Insurance Corporation (the “FDIC”), subject to the terms and conditions of this Agreement;

WHEREAS, TDATC will act as agent and recordkeeper with respect to certain books and records relating to the TDATC Customers’ individual Money Market Deposit Accounts represented by the TDATC Master Accounts (each, a “TDATC Customer Account” and, together with the TDAC Customer Accounts, the “Customer Accounts”) and will maintain its deposit account records to reflect at all times the existence of a relationship that serves as the basis for federal deposit insurance of such TDATC Customer Accounts by the FDIC, subject to the terms and conditions of this Agreement;

WHEREAS, the parties intend that the Customer Accounts will be eligible for federal deposit insurance by the FDIC for the maximum aggregate amount of principal and interest available with respect to each Customer’s aggregate deposits maintained in a single recognized legal capacity, as evidenced by the records of the Depository Institutions, TDAC and TDATC pursuant to applicable laws and regulations;

WHEREAS, for purposes of this Agreement, “Affiliate” shall mean, for any specified person, any other person who controls, is controlled by or is under common control with, such specified person. For purposes of this definition, (a) “control” (including, with its correlative meanings, the terms “controlling,” “controlled by” and “under common control with”) as used with respect to any person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such person, whether through the ownership of securities or other similar interest, by contract or otherwise; (b) with respect to the Ameritrade Companies, the term Affiliate shall not be deemed to include TD Parent or any of its subsidiaries; and (c) with respect to the Depository Institutions and TD Parent, the term Affiliate shall not be deemed to include the Ameritrade Companies or their parent corporation, TD Ameritrade Holding Corporation (“Ameritrade Parent”).

NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties, terms and conditions set forth herein, and intending to be legally bound hereby, the parties agree as follows:

1. Roles

(a) TDAC will act as the authorized agent, nominee, custodian and messenger of each TDAC Customer, and not of the Depository Institutions, in establishing, maintaining, making deposits to and withdrawals from, and effecting other transactions in the TDAC Master Accounts established and maintained by TDAC in its name. Except as set forth in Section 9, all deposits, withdrawals and other transactions in the TDAC Master Accounts shall only be effected by TDAC, as agent for the TDAC Customers, and not directly by the TDAC Customers.

(b) TDATC will act as the authorized agent, nominee, custodian and messenger of each TDATC Customer, and not of TD Bank USA, in establishing, maintaining, making deposits to and withdrawals from, and effecting other transactions in the TDATC Master Accounts established by TDATC in its name. Except as set forth in Section 9, all deposits, withdrawals and other transactions in the TDATC Master Accounts shall only be effected by TDATC, as agent for the TDATC Customers, and not directly by the TDATC Customers.

(c) TDAC hereby agrees to act as recordkeeper in maintaining the information set forth in Section 10 with respect to the TDAC Customer Accounts.

(d) TDATC hereby agrees to act as recordkeeper in maintaining the information set forth in Section 10 with respect to the TDATC Customer Accounts.

(e) TDA, TDATC and TDAC agree to accept on behalf of the Depository Institutions notices from Customers regarding unauthorized activity in their Customer Accounts.

2. Terms and Conditions of the Customer Accounts. Unless otherwise required by law or regulation, the parties agree that the Customer Accounts shall be governed by the following terms and conditions:

(a) no commitment shall be made to pay an interest rate or to employ a method of calculation of an interest rate on the funds deposited in the Master Accounts other than as permitted by applicable law, regulation or rule;

(b) there shall be no maturity on the Customer Accounts;

(c) the Depository Institutions reserve the right to require seven (7) days’ prior notice of any withdrawal of funds from the Customer Accounts; provided, however, that if a Depository Institution elects to exercise its right to require seven (7) days’ prior notice of any withdrawal of funds from a Customer Account, it shall, subject to applicable regulatory limitations, exercise such right as to all accounts established at such Depository Institution under 12 C.F.R. Section 204.2(d);

(d) there is no restriction on the number of any additional deposits to the Customer Accounts;

(e) the Customer Accounts shall not be transferable;

(f) withdrawals from the Customer Accounts shall be permitted only in accordance with Section 8 hereof;

(g) the Customer Accounts shall be subject to any and all terms and conditions as may from time to time be imposed on any money market deposit account described in 12 C.F.R. Section 204.2(d)(2) by any applicable law, regulation or rule or by any other determination of any governmental or regulatory authority;

(h) no checks shall be furnished by the Depository Institutions to the Customers for check writing purposes directly against the Customer Accounts; and

(i) no debit cards shall be furnished by the Depository Institutions to the Customers for debit of funds directly against the Customer Accounts.

3. Procedures for Establishment of, and Deposits to, the Master Accounts.

(a) The TDAC Master Accounts shall be established on behalf and for the benefit of the TDAC Customers in the name of “TD Ameritrade Clearing, Inc. for the Exclusive Benefit of Its Customers” at an office of each Depository Institution to be determined by mutual agreement of the parties. The TDAC Master Accounts will be maintained on the books and records of the Depository Institutions, evidenced by book entry on the account records of the Depository Institutions in the name of TDAC as agent for the TDAC Customers. As set forth in Section 10, and for the purposes set forth therein, TDAC shall maintain account information and deposit records with respect to the TDAC Customer Accounts.

(b) The TDATC Master Accounts shall be established on behalf and for the benefit of the TDATC Customers in the name of “TD Ameritrade Trust Company for the Exclusive Benefit of Its Customers” at an office of TD Bank USA to be determined by mutual agreement of the parties. The TDATC Master Accounts will be maintained on the books and records of TD Bank USA, evidenced by book entry on the account records of TD Bank USA in the name of TDATC as agent for the TDATC Customers. As set forth in Section 10, and for the purposes set forth therein, TDATC shall maintain account information and deposit records with respect to the TDATC Customer Accounts.

(c) TDAC and TDATC, as agents for their respective Customers, may on any Business Day deposit federal or other immediately available funds from the Customer Accounts into the applicable Master Account by wire transfer to the agreed-upon office, accompanied by appropriate instructions. If that wire transfer together with such instructions is received by the applicable Depository Institution prior to 6:00 p.m., Eastern Time, on any Business Day, the funds deposited by such wire transfer shall be credited to the applicable Master Account on that Business Day. For purposes of this Agreement, “Business Day” shall mean a day on which TDAC, TDATC and the Depository Institutions are open for business, but shall not include any Federal Reserve Bank holiday or any day on which the Fedwire Funds Service is not open for business.

(d) If withdrawals from a Master Account cause the deposit balance therein to be reduced to zero, the Depository Institution shall nevertheless continue to maintain such Master Account until TDAC or TDATC, as appropriate, notifies the Depository Institution to close such Master Account.

4. Interest Rate on Deposits.

(a) The interest rate payable by the Depository Institutions on the Master Accounts during any day shall be such rate(s) (calculated on the basis of the actual days elapsed of a year of 365 days) as determined by each Depository Institution in its discretion on each Business Day. The Depository Institutions shall notify TDAC and TDATC of the interest rate(s) by e-mail not later than 11:00 a.m., Eastern Time, on each Business Day, or such other time or manner as the parties may otherwise mutually agree in writing. If a Depository Institution does not provide such notification to TDAC or TDATC, or if a day is not a Business Day, the applicable Master Account shall bear interest at the interest rate last established for such Master Account pursuant to this Section 4.

(b) Interest shall be calculated daily and credited monthly to the principal for the Master Accounts on the last Business Day of the calendar month, or on such other date as may be agreed to by the parties in writing. Interest will begin to accrue on funds deposited to the Master Accounts on the day on which such funds are credited to the Master Accounts in accordance with the provisions of Section 3(c) hereof, and will accrue to, but not including, the day on which funds are withdrawn from the Master Accounts.

5. Fees; Related Matters.

(a) TDA and TDATC make sweep alternatives available to its Customers, including but not limited to (x) money market funds, (y) free credits and (z) Money Market Deposit Accounts. During the term of this Agreement, to the extent that TDA and TDATC determine to make available Money Market Deposit Accounts to its Customers as one of its designated sweep vehicles, TDA and TDATC shall be obligated to make available the Money Market Deposit Accounts, as established and maintained at the Depository Institutions, as the default designated Money Market Deposit Account sweep vehicle to the Customers and as the exclusive sweep option for Money Market Deposit Accounts; provided, however, that notwithstanding the foregoing, (i) TDA may change the default designated sweep vehicle from the Money Market Deposit Accounts to free credit balances held at TDAC for new accounts opened after the date of implementation of such a change or if required by applicable law or regulation; (ii) TDA and TDATC may make available Money Market Deposit Accounts established and maintained with other depository institutions (A) to the extent any Customer Accounts exceed the Depository Institutions’ aggregate FDIC deposit insurance limits as described in Section 7 or (B) if requested by a Customer. In connection herewith, the Ameritrade Companies shall provide marketing and support services in respect of Money Market Deposit Accounts established on behalf of the Customers at the Depository Institutions.

In consideration of the services to be provided by TDA, TDAC and TDATC respectively hereunder, the Depository Institutions agree to pay to the Ameritrade Companies collectively an aggregate fee (the “Marketing Fee”), on a monthly basis in arrears, not later than 15 calendar days after the end of each calendar month, in an amount equal to (i) the amount computed in accordance with Exhibit A with respect to the aggregate balances in the Master Accounts during such preceding calendar month, less (ii) the actual interest paid by the Depository Institutions during such preceding calendar month on the Master Accounts pursuant to Section 4(a), less (iii) an annual servicing fee (“Service Fee”) of 25 basis points on the aggregate average daily balance in the Master Accounts (subject to adjustment as set forth in Exhibit B ), less (iv) the total amount of FDIC deposit insurance premium assessments payable (including, if applicable, any special FDIC deposit insurance premium assessments paid; provided, however, that if and to the extent such special assessment represents a prepayment of assessments for future periods, the Depository Institutions and the Ameritrade Companies shall enter into good faith negotiations regarding a payment schedule for the Ameritrade Companies to pay their requisite share of such assessment) by the Depository Institutions each year in respect of or resulting from the deposits in the Master Accounts, all as determined in accordance with

Section 5(h), less (v) 55 basis points of average outstanding CRA Assets (as defined in Exhibit A ), subject to revision annually at the Depository Institutions’ fiscal year-end to reflect inherent loss in the CRA portfolio for the prior year calculated in accordance with the Depository Institutions’ policy on allowance for loan losses, plus (vi) the tax benefit realized by the Depository Institutions on any tax-exempt municipal securities included in CRA Assets, as calculated in accordance with Exhibit C . For purposes of this Section 5, the amounts payable pursuant to the foregoing clauses (iii) through (vi) shall be based on the actual number of days elapsed in such prior calendar month divided by 365. In the event that the computation of the Marketing Fee in any given month results in a negative amount, the Ameritrade Companies collectively agree to pay to the Depository Institutions such amount.

The mechanics of the payment of the Marketing Fee may vary from time to time as agreed to in writing by the parties. The parties hereto agree that no portion of the Marketing Fee shall compensate TDAC or TDATC, or reimburse TDAC or TDATC for expenses incurred, in connection with acting as messenger for their respective Customers. The Marketing Fee shall be allocated between the Depository Institutions as directed from time to time by TD Parent.

(b) The Ameritrade Companies shall be permitted to designate portions of the amounts on deposit in the Master Accounts as “Notional Investments,” on the following terms and conditions:

(i) only amounts in excess of the designated Liquidity Reserve Levels set forth in Section 6 may be designated as Notional Investments;

(ii) Notional Investments shall be designated by the Ameritrade Companies and may not have a final maturity in excess of [CONFIDENTIAL TREATMENT REQUESTED] years from the investment date (a “Permitted Notional Investment”) unless a maturity or extension beyond [CONFIDENTIAL TREATMENT REQUESTED] years is agreed upon by the Ameritrade Companies and the Depository Institutions;

(iii) The Ameritrade Companies shall designate a Permitted Notional Investment by giving the Depository Institutions written notice of the designated principal amount and maturity date;

(iv) the yield on any such Permitted Notional Investment shall be determined as set forth in Exhibit A ;

(v) yields on a Permitted Notional Investment will be determined and credited as the proceeds are invested by the Depository Institutions in corresponding assets, but in no event later than 10 Business Days after the Depository Institutions have received the related notice of designation of such Permitted Notional Investment from the Ameritrade Companies;

(vi) should the Ameritrade Companies designate a Notional Investment in excess of [CONFIDENTIAL TREATMENT REQUESTED] in any given week, the first [CONFIDENTIAL TREATMENT REQUESTED] designated in that week will be credited in accordance with clauses (i) through (v) above and the excess portion will be credited when and if the Depository Institutions have notified the Ameritrade Companies in writing that they have

identified sufficient and adequate assets corresponding thereto (which the Depository Institutions shall use reasonable best efforts to so identify as promptly as practicable after receiving the related notice of designation of such Notional Investment from the Ameritrade Companies and pursuant to applicable investment policies);

(vii) prior to the Depository Institutions sending to the Ameritrade Companies for execution any written confirmation pursuant to Section 5(c) below, the Ameritrade Companies may rescind any designation of a Notional Investment made pursuant to this Section 5(b), solely with respect to the then-remaining portion of a designated Notional Investment for which the Depository Institutions have not yet sent a confirmation to the Ameritrade Companies, by providing written notice to the Depository Institutions of such rescission, which rescission notice shall be irrevocable and shall become effective at the end of business on the Business Day immediately following receipt of such rescission notice by the Depository Institutions (it being understood and agreed that the Depository Institutions may continue sending confirmations to the Ameritrade Companies for execution with respect to the then-remaining portion of a designated Notional Investment until the time at which such rescission notice becomes effective as provided in this clause (vii)); and

(viii) notwithstanding any other provision herein, the Ameritrade Companies shall use their commercially reasonable efforts to honor the respective maturity schedules of the corresponding Notional Investments.

For purposes of this Agreement, a “Notional Investment” shall mean a synthetic asset equal in amount to a given deposit in the Master Account. Notional Investments are initiated at a price of par, have a maturity date (a tenor designated by the Ameritrade Companies at the time of the investment) and carry a coupon rate and yield equal to the prevailing rate at the time such investment is confirmed and determined in accordance with Exhibit A . For purposes of clarity, a Notional Investment is not a deposit.

(c) Each Notional Investment shall be evidenced by a written confirmation executed by the Ameritrade Companies and the applicable Depository Institution that details the agreed-upon yield, maturity date, principal amount and other material terms. Except as otherwise provided in Section 6(d) or 18(h), in the event any portion of the funds underlying a particular Notional Investment are withdrawn prior to the maturity of the investment, the Ameritrade Companies shall reimburse the applicable Depository Institution in an amount equal to the Economic Replacement Value, if positive, on the principal amount withdrawn to the applicable Depository Institution. Such reimbursement shall be due upon receipt by the Ameritrade Companies of written notice of the amount of the reimbursement from such Depository Institution. For purposes of this Agreement, “Economic Replacement Value” is the interest cost to the applicable Depository Institution calculated as the actual discounted value of any positive difference between the cost of the replacement funds underlying the Notional Investment and the cost of the previously agreed-upon funding, and shall be calculated in the manner set forth in Exhibit D . At the request of the Ameritrade Companies, the Depository Institution(s) will provide estimates of the reimbursement that would be payable under this paragraph in the event of withdrawal of funds underlying certain Notional Investments, and will cooperate with the Ameritrade Companies regarding potential liquidation strategies and, specifically, the determination of which Notional Investment will be withdrawn.

(d) The Ameritrade Companies and the Depository Institutions may from time to time agree, in writing, on specific extension strategies and crediting arrangements (including modification of the Service Fee) that vary from the terms and conditions set forth above.

(e) On at least an annual basis, but no more often than quarterly, the Ameritrade Companies and the Depository Institutions will review and use reasonable best efforts to jointly agree, in writing, on the maximum amount that may be designated per week for Notional Investments pursuant to Section 5(b).

(f) The parties hereby agree that the Marketing Fee shall not be subject to either a cap or a floor. Notwithstanding the foregoing, the parties understand and agree that the arrangement created by this Agreement is subject to Section 23B of the Federal Reserve Act, as amended, and applicable regulations thereunder (collectively, “Section 23B”) and, accordingly, must be on terms and conditions that comply with such statute and regulations. In the event that either Depository Institution determines that the Marketing Fee paid by such Depository Institution, together with the interest rate paid on the Master Accounts exceeds the rate that such Depository Institution would have to pay to obtain funds in similar amounts and duration from unaffiliated deposit sources and fails to comply with Section 23B, or that the arrangement otherwise fails to comply with Section 23B, then upon request of that Depository Institution, the parties shall renegotiate the Marketing Fee in good faith and, if they cannot come to agreement, the Depository Institutions may terminate this Agreement in accordance with Section 18(g) hereof.

(g) The Depository Institutions shall provide to the Ameritrade Companies, on an annual basis, an agreed-upon procedure report prepared by auditors for the Depository Institutions verifying that the calculations of the Marketing Fees paid by the Depository Institutions pursuant to this Section 5 during the preceding fiscal year are in conformity with the terms of this Agreement.

(h) The parties acknowledge that the deposits maintained in the Master Accounts and held at the Depository Institutions [CONFIDENTIAL TREATMENT REQUESTED] . In light of the foregoing, the Ameritrade Companies collectively agree to pay the Depository Institutions (in respective amounts as determined by TD Parent) on a monthly basis until the termination of this Agreement, an amount equal to the sum of (i) the full amount of insurance premiums assessed by the FDIC in respect of the deposits maintained in the Master Accounts and held at the Depository Institutions and (ii) until there is a change resulting in the deposits in the Master Accounts [CONFIDENTIAL TREATMENT REQUESTED] , or resulting in other deposits at the Depository Institutions being assessed at a higher rate (including through waiver, exception or otherwise, or a change in applicable law or regulation then in effect), [CONFIDENTIAL TREATMENT REQUESTED] % of the incremental cost incurred by the Depository Institutions as a result of any [CONFIDENTIAL TREATMENT REQUESTED] to the total base assessment rate applicable to the Depository Institutions in respect of all other deposits held at the Depository Institutions that are not maintained in the Master Accounts. Such amounts shall be payable as reductions to the Marketing Fee pursuant to Section 5(a) or, at TD Parent’s election and upon reasonable prior written notice, by direct payment to the Depository Institutions. The methodology for calculating applicable FDIC deposit insurance premium assessments for purposes of this Agreement is set forth in Exhibit E . If at the time of any such payments the actual FDIC assessment for a relevant period has not been determined, such payments shall be based on good faith estimates provided by the Depository Institutions, subject to retroactive adjustment based

on final FDIC determination and FDIC assessment payments paid by the Depository Institutions for the relevant period. In connection with the foregoing, the Depository Institutions shall provide the Ameritrade Companies, within a reasonable period of time following the end of each calendar quarter, with statements showing the calculation of FDIC assessments used by the Depository Institutions to determine the amounts payable under this Section 5(h) during the immediately preceding calendar quarter, which calculations for the four calendar quarters in a particular calendar year shall be covered by the auditors’ report delivered for such year pursuant to Section 5(g) above. The parties agree that promptly following the end of each calendar quarter, they will jointly review the amounts paid to the FDIC and owed by the Ameritrade Companies under this Section 5 for the preceding periods for which final assessment information is available and, if necessary, adjust between the parties any identified over or under payments.

(i) TDA and the Depository Institutions agree to jointly review and evaluate possible steps that may be taken to reduce the aggregate level of FDIC deposit insurance premiums related to or resulting from the program contemplated by this Agreement by reversing the order in which TDAC Customer deposits are allocated to the Depository Institutions. If agreed and implemented by the parties, the costs of such study and implementation shall be shared equally between TDA, on the one hand, and the Depository Institutions, on the other hand.

(j) In the event that for any reason, including a change in law or regulation, the deposits in a Master Account cease to qualify as savings deposits for purposes of 12 C.F.R. Section 204.2(d)(2), (i) the parties shall negotiate in good faith to make appropriate adjustments to the Marketing Fee to reflect any financial consequences to the Depository Institutions resulting from such change, including increased reserving requirements or other incremental costs that may be incurred by either party; and (ii) to the extent the parties cannot come to an agreement within 30 days of such event, the Depository Institutions shall have the right to terminate this Agreement in accordance with Section 18(b).

(k) The Depository Institutions shall pay TDAC and TDATC the Marketing Fee referred to in Section 5(a) above, pro rata , as calculated based on the deposits held in the Master Accounts.

6. Liquidity Reserve Requirements.

(a) The Depository Institutions shall maintain an aggregate portfolio of Liquid Investments in respect of the balances on deposit in the Master Accounts in the percentages (each, a “Liquidity Reserve Level”) and for the categories set forth below:

(i) Retail – [CONFIDENTIAL TREATMENT REQUESTED] %;

(ii) Institutional – [CONFIDENTIAL TREATMENT REQUESTED] %; and

(iii) Savings – [CONFIDENTIAL TREATMENT REQUESTED] %;

provided, that the Depository Institutions shall, at all times, have the right to manage the Liquidity Reserve Levels, on an individual basis, in order to comply with applicable legal and regulatory requirements or satisfy any regulatory guidance, request or directive received by any Depository Institution or TD Parent from any applicable bank regulatory agency, including,

without limitation, the Office of the Superintendent of Financial Institutions (Canada) (“OSFI”), the Board of Governors of the Federal Reserve System (“Federal Reserve”), the Office of the Comptroller of the Currency (“OCC”) and the FDIC, in each case as determined by TD Parent in its reasonable judgment using principles consistent with comparable other deposits of TD Parent or the Depository Institutions, as the case may be. TD Parent shall, to the extent practicable, provide the Ameritrade Companies with notice of, and a reasonable opportunity to review and comment on, any proposed change to such Liquidity Reserve Levels prior to such change becoming effective. Should any change to the Liquidity Reserve Levels be materially adverse to the Ameritrade Companies and the parties cannot come to resolution satisfactory to each within 90 days of the change being effected, the Ameritrade Companies may elect to terminate this Agreement by providing written notice to TD Parent pursuant to Section 18(c). The Liquidity Reserve Levels shall be reviewed at least annually by the Depository Institutions and the Ameritrade Companies.

(b) For purposes of this Agreement, “Liquid Investments” shall mean (i) assets other than those in respect of Notional Investments and CRA Assets and (ii) investments in respect of Notional Investments having a maximum remaining maturity of 90 days.

(c) In the event that the aggregate Liquid Investments maintained pursuant to Section 6(a) at a Depository Institution fall below the Liquidity Reserve Levels specified in or determined pursuant to Section 6(a) for all the Master Accounts at such Depository Institution on an aggregate basis, whether as a result of a reduction in deposit balances in the Master Accounts, a change in Liquidity Reserve Levels or otherwise (in each case, a “Liquidity Deficiency Event”), such Depository Institution shall give prompt written notice to the Ameritrade Companies, and the parties shall cooperate with each other to develop an orderly plan to remedy such Liquidity Deficiency Event. Notwithstanding the foregoing, nothing herein shall restrict the Depository Institutions from taking any and all actions as they may deem necessary to comply with applicable legal and regulatory requirements or satisfy any regulatory guidance, request or directive received by the Depository Institutions or TD Parent from any applicable bank regulatory agency.

(d) If, in connection with a Liquidity Deficiency Event under Section 6(c) and following development of an orderly remedial plan if applicable, the applicable Depository Institution determines that a reduction in Notional Investments is necessary in order to remedy such Liquidity Deficiency Event, the Ameritrade Companies shall: (i) designate the specific Notional Investments and related swaps to be terminated, after having consulted with the applicable Depository Institution on minimizing to the extent possible any change in the weighted average maturity applicable to the aggregate portfolio of Notional Investments and related swaps at such Depository Institution, and (ii) reimburse such Depository Institution in an amount equal to the Economic Replacement Value (as calculated in the manner set forth in Exhibit D ) for the principal amount of the Notional Investment so terminated. Notwithstanding clause (i) of this Section 6(d), nothing herein shall restrict the Depository Institutions from taking any and all actions as they may deem necessary to remedy a Liquidity Deficiency Event in compliance with applicable laws and regulations, and any such damages shall be covered as and to the extent provided in clause (ii) of this Section 6(d).

7. Allocation of Deposits.

(a) TDAC shall allocate TDAC Customer funds in the TDAC Master Accounts so that an amount that is less than or equal to each TDAC Customer’s FDIC deposit insurance limit is deposited in the TDAC Master Account at TD Bank, with any overage to be allocated to the TDAC Master Account at TD Bank USA, and TDATC shall allocate TDATC Customer funds to the TDATC Master Accounts at TD Bank USA. As may be agreed by TDA and the Depository Institutions from time to time, in writing and in accordance with Section 5(i), TDAC may allocate TDAC Customer funds in such different manner as so agreed in order to reduce FDIC deposit insurance premiums.

(b) The Depository Institutions recognize that the Ameritrade Companies may enter into agreements in respect of Money Market Deposit Accounts with other depository institutions for, among other reasons as provided in Section 5(a), the purpose of providing FDIC insurance to Customer Accounts that exceed the Depository Institutions’ FDIC deposit insurance limits, including, but not limited to, pursuant to the terms of Section 18(d). The Depository Institutions agree that the selection of other depository institutions to participate in the offering of Money Market Deposit Accounts to Customers shall be in the sole discretion of the Ameritrade Companies, subject to TD Parent’s right to object based on reasonable commercial business considerations; provided, however, that regardless of any such objection, the final decision concerning the selection of the other depository institutions remains in the sole discretion of the Ameritrade Companies. The Ameritrade Companies recognize and acknowledge that the Depository Institutions may offer Money Market Deposit Accounts to persons other than the Customers without restriction.

(c) In the event that the Ameritrade Companies enter into agreements with other depository institutions as permitted by Section 7(b), it is understood and agreed that the funds of the Customers in excess of the applicable FDIC insurance limits at the Depository Institutions shall be allocated to the depository institutions offering Money Market Deposit Accounts as the Customers and TDAC or TDATC as agent for the Customers shall determine appropriate. In this regard, the Depository Institutions recognize that the Ameritrade Companies may (i) provide the Customers with a list of depository institutions making Money Market Deposit Accounts available, and (ii) deposit in a Money Market Deposit Account at the depository institution selected by the Customer all Customer funds in excess of the FDIC deposit insurance limits available at the Depository Institutions.

(d) If at any time a Depository Institution is not legally permitted to accept deposits in a Master Account (whether because it has been deemed to be “adequately capitalized,” as defined in 12 C.F.R. Section 337.6, and has not yet received a waiver from the FDIC, or is deemed to be less than “adequately capitalized,” or otherwise), TDAC and TDATC shall direct Customer deposits to the other Depository Institution (including, in the case of TDATC, to TD Bank) to the extent required to comply with applicable law and subject to applicable deposit insurance limitations. To the extent that neither Depository Institution is then able to accept such Customer deposits, or the remaining Depository Institution that is permitted to accept such deposits has reached its FDIC deposit insurance limit for applicable Customer Accounts, the Ameritrade Companies shall not direct such excess Customer deposits to any Depository Institution but may direct such excess Customer deposits to other depository institutions pursuant to Section 7(b).

8. Withdrawals from and Closure of a Master Account.

(a) Withdrawals from a Master Account may be made prior to 4:00 p.m., Eastern Time, on any Business Day only by TDAC, as agent for the TDAC Customers, or by TDATC, as agent for the TDATC Customers. All withdrawals shall be made no more than once a day on any Business Day pursuant to instructions delivered by TDAC or TDATC, as applicable, or their respective messenger. TDAC, TDATC or such messenger, as applicable, shall receive evidence of the Depository Institution’s receipt of the withdrawal and transfer instructions for same day funds representing the total of such withdrawals to be made to TDAC, as agent for the TDAC Customers, or TDATC, as agent for the TDATC Customers, as applicable. If directed by TDAC, TDATC or their respective messenger, as applicable, the Depository Institution will transfer funds to accounts at another depository institution. Each of TDAC and TDATC agrees that upon its receipt of such payment for withdrawals, the Depository Institution shall have no further obligation and shall be discharged as to TDAC or TDATC, as appropriate, and any Customers on whose behalf such payment was made, and that the Depository Institution shall have no further obligation with respect to the funds represented by such withdrawal other than the obligation to pay any accrued and unpaid interest relating to those funds.

(b) Each of TDAC and TDATC reserves the right to make withdrawals equal to the remaining balance in a Master Account. Such Master Account may only be closed by TDAC, as agent for the TDAC Customers, or TDATC, as agent for the TDATC Customers, as applicable.

9. Registration at the Depository Institutions. Pursuant to instructions received from a Customer, if TDAC or TDATC, as applicable, so advises a Depository Institution, such Depository Institution shall record a Money Market Deposit Account on behalf of such Customer on the books and records of the Depository Institution in the name of such Customer (i) if such Customer terminates its agency relationship with respect to the applicable Master Account at the Depository Institution, (ii) if TDAC or TDATC cease to make the Depository Institution’s Money Market Deposit Account available as a designated sweep vehicle as permitted by the terms of this Agreement, or (iii) if this Agreement is terminated by any party (in such case or in the case of clause (ii), subject to the provisions of Section 18(h)). Upon request, TDAC or TDATC, as applicable, will provide the Depository Institution with confirmation of such Customer’s instructions. To facilitate such recordation in the name of such Customer, and upon direction by such Customer or by TDAC or TDATC, as applicable, TDAC or TDATC, as applicable, shall reasonably cooperate with the Depository Institution in establishing the identity of such Customer, including, without limitation, the name, address and taxpayer identification number of such Customer and such other information as the Depository Institution may request in order to comply with applicable law. Upon recordation of a Money Market Deposit Account in the name of a Customer, the provisions of this Agreement shall no longer govern the terms of such account and TDAC or TDATC, as applicable, shall have no further obligation with respect to servicing such Customer’s Customer Account.

10. Books and Records Concerning the Master Accounts.

(a) As agents and custodians for the Customers, each of TDAC and TDATC will maintain, in good faith and in the regular course of business, and in accordance with applicable published requirements of the FDIC (including, without limitation, FDIC requirements for pass-through deposit insurance coverage), books and records setting forth the daily balance and accrued interest in the Master Accounts at the Depository Institutions and identifying with respect to such Master Accounts the names, addresses and social security or tax identification numbers of the Customers and any representative capacity in which the Customers may be acting. It is understood that the names, addresses and social security or tax identification numbers of the Customers, and any representative capacity in which they may be acting, will be maintained on TDAC’s or TDATC’s, as applicable, books and records in its capacity as agent and custodian for the Customers and will not be disclosed to the Depository Institutions except as otherwise required by law or this Agreement.

(b) In connection with the Depository Institutions’ compliance with 12 C.F.R. Part 204 (“Regulation D”), TDAC and TDATC, as recordkeepers for the Depository Institutions, shall allow independent auditors, examiners and other authorized representatives of the federal bank regulatory agencies that have appropriate jurisdiction over the Depository Institutions reasonable access from time to time upon request to the books and records of TDAC and TDATC, as applicable, with respect to the Master Accounts, and each of TDAC and TDATC shall cooperate with such independent auditors and agencies to the extent necessary to enable the Depository Institutions to comply with their obligations under Regulation D and other regulatory guidelines with regard to such requests for access.

(c) Each of TDAC and TDATC covenants that it shall at all times maintain, or cause to be maintained, an emergency system to ensure that the books and records concerning the Master Accounts will be retrievable within a reasonable period of time in the event of a computer failure or malfunction.

(d) TDAC and TDATC may delegate to a third party service provider their respective duties under this Section 10; provided, that (i) the third party service provider will at all times maintain, or cause to be maintained, an emergency system to ensure that the books and records concerning the Master Accounts will be retrievable within a reasonable period of time in the event of a computer failure or malfunction and (ii) TDAC and TDATC will remain liable to the Depository Institutions for such delegated services to the same extent as if TDAC or TDATC, as applicable, had performed them themselves.

(e) Upon request of a Depository Institution, TDAC or TDATC, as applicable, will prepare and deliver to the Depository Institution, as promptly as is commercially reasonable, the following information with respect to any date(s) designated by the Depository Institution in machine readable form or in the form of a computer printout:

(i) a list of all beneficial owners of the applicable Master Account(s) at the Depository Institution, designated by account number, in which deposits are being made on that day, setting forth the amount of the deposit to each Money Market Deposit Account;

(ii) a list of all beneficial owners of the applicable Master Account(s) at the Depository Institution, designated by account number, from which withdrawals are being made on that day, setting forth the amount of the withdrawals from each Money Market Deposit Account;

(iii) a statement of the aggregate balance in each applicable Customer’s Money Market Deposit Account after the deposits and withdrawals set forth in the lists described in (i) and (ii) above, respectively, have been effected;

(iv) a list of all beneficial owners of the applicable Master Account(s) at the Depository Institution, designated by account number, indicating whether each beneficial owner is an individual; an organization that is operated primarily for religious, philanthropic, charitable, educational, political or other similar purpose and that is not operated for profit; the United States; a state, county, municipality or political subdivision thereof; or the District of Columbia, the Commonwealth of Puerto Rico, American Samoa, Guam, any territory or possession of the United States or any political subdivision thereof; and

(v) such other information as the Depository Institution may reasonably request to facilitate or demonstrate its compliance with Regulation D (or any successor regulation).

(f) Not later than 15 days following the end of each calendar quarter, TDAC and TDATC shall furnish to the Depository Institutions such information, and in such format, as the Depository Institutions may from time to time specify in connection with the preparation of their quarterly Consolidated Reports of Condition and Income (Call Reports) or comparable report to be filed with the OCC, the FDIC or any other member of the Federal Financial Institutions Examination Council.

(g) TDAC and TDATC shall at all times comply, and ensure that any third party service provider to which it delegates any of its respective duties under this Section 10 will at all times comply, with the applicable requirements of OCC Bulletin 2005-13 (12 C.F.R. Part 30, Appendix B), and TDAC and TDATC will allow the Depository Institutions access to their books and records and personnel in order to permit the Depository Institutions to maintain and assess compliance with the foregoing requirements by TDAC and TDATC and any such third party service providers.

(h) TDAC and TDATC will: (i) implement and maintain appropriate programs reasonably designed to ensure compliance with all regulations, orders and policies concerning matters such as the identity of the Customers and the sources of funds that are handled pursuant to this Agreement, including the Bank Secrecy Act and the USA PATRIOT Act, and all regulations issued thereunder, Executive Order No. 13224 and the regulations administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (together, “U.S. Money Laundering and Investor Identification Requirements”); and (ii) provide such information as the Depository Institutions may reasonably require from time to time to verify TDAC’s and TDATC’s compliance with applicable U.S. Money Laundering and Investor Identification Requirements. The parties acknowledge that certain letter agreement, dated March 15, 2011, as may be amended from time to time, by and among TD Parent, TD Bank, TD Bank USA and the Ameritrade Companies, with respect to anti-money laundering compliance and other matters set forth therein, and agree that this Section 10(h) should be read together with such letter agreement.

(i) TDAC and TDATC agree to provide the Depository Institutions with such reports as the Depository Institutions may reasonably request from time to time in connection with their asset/liability management and forecasting programs.

11. Representations and Warranties of TDA. TDA represents and warrants to the Depository Institutions, as of the date hereof, as follows:

(a) TDA is a corporation duly incorporated, validly existing and in good standing under the laws of the State of New York.

(b) This Agreement constitutes a legal, valid and binding obligation of TDA, enforceable against TDA in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, liquidation or other similar laws affecting generally the enforcement of creditors’ rights.

(d) Neither the execution and delivery of this Agreement, the consummation of the transactions herein contemplated, the fulfillment of, or compliance with, the terms and provisions hereof, nor the performance of its obligations hereunder will conflict with, or result in a breach of any of the terms, conditions or provisions of (i) any material federal law, regulation, order, regulatory agreement, or rule applicable to TDA, (ii) any material applicable law, rule or regulation of the state in which TDA has its principal place of business or of any regulatory agency or self-regulatory organization, (iii) the articles of incorporation or bylaws of TDA or (iv) any material agreement to which TDA is a party or by which it may be bound.

(e) TDA either has full power and authority to receive on behalf of, and as agent for, each of the Customers any information, including disclosure information, that the Depository Institutions may provide in connection with a Money Market Deposit Account, including any disclosure information required by law or, if TDA lacks such power and authority, TDA shall deliver such information directly to the Customers within any applicable time periods required by law.

(f) There is no action, suit, proceeding, inquiry or investigation by or before any court, governmental agency, public board or body pending or, to the knowledge of TDA, threatened against or contemplated by any governmental agency which could reasonably be expected to materially impair the ability of TDA to perform its obligations under this Agreement.

12. Representations and Warranties of TDAC and TDATC. TDAC and TDATC, severally and not jointly, represent and warrant to the Depository Institutions, as of the date hereof, as follows:

(a) TDAC is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Nebraska and TDATC is a non-depository trust company duly incorporated, validly existing and in good standing under the laws of the State of Maine.

(b) This Agreement constitutes a legal, valid and binding obligation of each of TDAC and TDATC, enforceable against each in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, liquidation or other similar laws affecting generally the enforcement of creditors’ rights.

(d) Neither the execution and delivery of this Agreement, the consummation of the transactions herein contemplated, the fulfillment of, or compliance with, the terms and provisions hereof, nor the performance of its obligations hereunder will conflict with, or result in a breach of any of the terms, conditions or provisions of (i) any material federal law, regulation, order, regulatory agreement, or rule applicable to TDAC or TDATC, (ii) any material applicable law, rule or regulation of the state in which TDAC or TDATC has its principal place of business or of any regulatory agency or self-regulatory organization, (iii) the articles of incorporation or bylaws of TDAC or TDATC or (iv) any material agreement to which TDAC or TDATC is a party or by which it may be bound.

(e) TDAC is the authorized representative, agent (or sub-agent) and nominee (or sub-nominee) for each TDAC Customer in establishing, maintaining, making deposits to and withdrawals from and effecting other transactions in the TDAC Master Accounts and is authorized to give the Depository Institutions instructions on behalf of the TDAC Customers with respect to the TDAC Master Accounts; and the Depository Institutions may conclusively rely without further inquiry on such instructions given by TDAC on behalf of the TDAC Customers or otherwise in connection with this Agreement. TDATC is the authorized representative, agent (or sub-agent) and nominee (or sub-nominee) for each TDATC Customer in establishing, maintaining, making deposits to and withdrawals from and effecting other transactions in the TDATC Master Accounts and is authorized to give the Depository Institutions instructions on behalf of the TDATC Customers with respect to the TDATC Master Accounts; and the Depository Institutions may conclusively rely without further inquiry on such instructions given by TDATC on behalf of the TDATC Customers or otherwise in connection with this Agreement.

(f) Each of TDAC and TDATC either has full power and authority to receive on behalf of, and as agent for, each of their respective Customers any information, including disclosure information, that the Depository Institutions may provide in connection with a Money Market Deposit Account, including any disclosure information required by law or, if either TDAC or TDATC lacks such power and authority, TDAC or TDATC, as applicable, shall deliver such information directly to its Customers within any applicable time periods required by law.

(g) There is no action, suit, proceeding, inquiry or investigation by or before any court, governmental agency, public board or body pending or, to the actual knowledge of each of TDAC and TDATC, threatened by any governmental agency that could reasonably be expected to materially impair the ability of either of TDAC and TDATC to perform its obligations under this Agreement.

13. Representations and Warranties of the Depository Institutions. Each Depository Institution, severally and not jointly, represents and warrants to the Ameritrade Companies, as of the date hereof, as follows:

(a) Such Depository Institution is a national banking association organized and existing under the laws of the United States and regulated by the OCC.

(b) This Agreement constitutes a legal, valid and binding obligation of such Depository Institution, enforceable against it in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, liquidation or other similar laws affecting the enforcement of creditors’ rights generally or of creditors of depository institutions the accounts of which are insured by the FDIC.

(c) Neither the execution and delivery of this Agreement, the consummation of the transactions herein contemplated, the fulfillment of, or compliance with, the terms and provisions hereof, nor the performance of its obligations with respect to the Master Accounts will conflict with, or result in a breach of any of the terms, conditions or provisions of (i) any material federal banking or other law, regulation, order, regulatory agreement, or rule applicable to such Depository Institution or governing the acceptance of deposits, (ii) any material applicable law, rule or regulation of the state in which such Depository Institution has its principal place of business or of any regulatory agency or self-regulatory organization, (iii) the articles of association or bylaws of such Depository Institution or (iv) any material agreement to which such Depository Institution is a party or by which it may be bound.

(d) Such Depository Institution has obtained and/or made any consent, approval, waiver or other authorization of or by, or filing or registration with, any court, administrative or regulatory agency or other governmental authority of the federal government or the state in which such Depository Institution has its principal place of business that is required to be obtained by the Depository Institution in connection with the execution, delivery or performance by the Depository Institution of this Agreement or the consummation by the Depository Institution of the transactions contemplated by this Agreement including, without limitation, the offering of Money Market Deposit Accounts to the Customers.

(e) The deposits made at such Depository Institution are insured by the FDIC to the fullest extent permitted by law and the Customer Accounts will be eligible for FDIC insurance for each Customer identified on the records maintained pursuant to Section 10 for each recognized legal capacity for which the Customer is eligible, subject to (i) FDIC aggregation rules for other accounts held by a Customer with such Depository Institution and (ii) such Depository Institution recording the Master Accounts as set forth in Section 3.

(f) Such Depository Institution is “well capitalized,” as defined in 12 C.F.R. Section 337.6, and may accept, renew or roll over “brokered deposits,” as defined in 12 C.F.R. Section 337.6, without obtaining a waiver from the FDIC.

(g) There is no action, suit, proceeding, inquiry or investigation by or before any court, governmental agency, public board or body pending or, to the knowledge of such Depository Institution, threatened by any governmental agency which could reasonably be expected to materially impair the ability of such Depository Institution to perform its obligations under this Agreement.

(h) The statements made in the TDA and TDATC disclosures to Customers and Customer agreements, as provided to the Depository Institutions by TDA and TDATC prior to the signing of this Agreement (collectively, the “Customer Disclosures”), to the extent that they make representations concerning such Depository Institution and its deposit insurance coverage, are true and accurate in all material respects.

(i) Such Depository Institution is not the subject of or party to a memorandum of understanding or any supervisory agreements, mandated board resolutions, cease-and-desist orders, consent agreements, or regulatory restrictions that would, directly or indirectly, materially impair its ability to perform its obligations under this Agreement.

(j) Such Depository Institution is authorized under applicable law and regulation to pay interest on the Master Accounts at the interest rate determined in accordance with Section 4 hereof.

(k) Deposits of Customers in the Master Accounts at such Depository Institution are entitled to the priority provided to “deposit liabilities” by Section 11(d)(11) of the Federal Deposit Insurance Act, as amended, and applicable regulations thereunder.

(l) No applicable law or regulation of the state of such Depository Institution’s principal place of business or any political subdivision thereof imposes any state or local income or franchise tax with respect to any Customer’s interest in a Master Account established by a nonresident of such state.

14. Representation and Warranty of TD Parent. TD Parent represents and warrants to the Ameritrade Companies, as of the date hereof, that:

(a) TD Parent has capital at or above OSFI’s minimum capitalization ratio as currently required by OFSI; and

(b) TD Parent is a Schedule I bank under the Bank Act (Canada).

15. General Covenants.

(a) Each Depository Institution will provide notification as promptly as reasonably possible (and in any event within twenty-four (24) hours of learning of the relevant action or information) to the Ameritrade Companies of any action by the FDIC or by such Depository Institution to terminate such Depository Institution’s FDIC-insured status.

(b) Each Depository Institution will provide notification as promptly as reasonably possible (and in any event within twenty-four (24) hours of learning of the relevant occurrence) to the Ameritrade Companies upon the occurrence of any event that causes, or could reasonably be expected to cause, (i) the termination of such Depository Institution’s FDIC-insured status and (ii) such Depository Institution to be placed in a lower capital category or deemed “undercapitalized,” as defined in 12 C.F.R. Section 337.6.

(c) TD Parent agrees to provide written notice to the Ameritrade Companies as promptly as reasonably practicable (i) if TD Parent no longer owns or controls, directly or indirectly, a majority of the issued and outstanding voting securities of either or both of the Depository Institutions, or (ii) if TD Parent’s capital falls below OSFI’s minimum capitalization ratio as required from time to time by OSFI.

(d) Each of TDA, TDAC and TDATC will perform their respective obligations under this Agreement pursuant to all federal and state securities laws and all regulations of any regulatory agency or self-regulatory organization applicable to the performance of such obligations hereunder.

(e) TDA shall maintain a fidelity bond covering its officers and employees in an amount equal to or exceeding $1,000,000.

(f) TDA shall provide all of the services specified herein to be provided by TDA in accordance with industry practices; provided, however, that in the event any applicable regulation, statute or rule changes or any new applicable regulation, statute or rule is enacted, the parties shall negotiate in good faith to determine appropriate service levels.

(g) Each of TDAC and TDATC, as recordkeepers for the Depository Institutions, will maintain the applicable Master Accounts in accordance with the definition of “savings deposit” in 12 C.F.R. Section 204.2(d)(2), and interpretations of the Federal Reserve thereunder, including the transfer and withdrawal restrictions contained therein.

(h) Each of TDAC and TDATC will prepare and file, on a timely basis and in the manner prescribed by the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), and applicable regulations thereunder, all information returns that may be required by TDAC and TDATC in whatever capacity with respect to its respective Master Accounts (with the customary copies thereof for state and local taxing authorities) and will furnish a copy of all information returns and notifications prescribed by the Internal Revenue Code and applicable regulations thereunder with respect to any Customer holding a Money Market Deposit Account at the Depository Institution(s) to the Customer; provided, however, that in the event TDAC or TDATC does not have available to it the information required to complete such information return and such information is available to the Depository Institution(s), TDAC or TDATC, as applicable, shall request such information from the Depository Institution(s) and upon receipt of such information in a timely manner, TDAC or TDATC, as appropriate, shall prepare and file such return in an timely manner. Each of TDAC and TDATC will cause to be obtained and retained in its files any necessary exemption certificates from its respective Customers with respect to the filing of any information return and the withholding of taxes.

(i) Each of TDAC and TDATC will withhold in a timely and proper manner any and all taxes required to be withheld under applicable law in connection with the payment or crediting of any interest on any beneficial interest in the applicable Master Accounts and will pay in a timely and proper manner such amount to the appropriate governmental agency or its designated agent.

(j) Each of TDAC and TDATC shall maintain a fidelity bond covering its officers and employees in an amount equal to or exceeding $1,000,000.

(k) Each of TDAC and TDATC shall provide all of the services specified herein to be provided by TDAC and TDATC in accordance with industry practices; provided, however, that in the event any applicable regulation, statute or rule changes or any new applicable regulation, statute or rule is enacted, the parties shall negotiate in good faith to determine appropriate service levels.

(l) Each of TDAC and TDATC shall, with respect to their Customer Accounts, comply with applicable U.S. Money Laundering and Investor Identification Requirements and implement, verify and maintain appropriate procedures to verify suspicious transactions and the source of funds for the Customer Accounts.

(m) The Depository Institutions will furnish to the Ameritrade Companies (i) copies of all annual, quarterly, and other reports and information furnished to stockholders of TD Parent, on or promptly following the time such reports and other information are first furnished to such stockholders, and (ii) any other reports and financial statements filed by TD Parent with the U.S. Securities and Exchange Commission.

(n) The Master Accounts will not at any time be subject to any right, charge, security interest, lien or claim of any kind against TDA, TDAC or TDATC in favor of the Depository Institutions or any person claiming through the Depository Institutions, and the Depository Institutions will not exercise any right of set-off or recoupment against the Master Accounts.

(o) Each Depository Institution shall maintain a fidelity bond covering its officers and employees in an amount equal to or exceeding $1,000,000.

(p) The Depository Institutions hereby covenant and agree that, upon request by and at the sole option of the Ameritrade Companies, the Depository Institutions shall provide Master Accounts and related services to any of the Ameritrade Companies’ Affiliates or any successor entity of TDA, TDAC or TDATC, as applicable, controlled by Ameritrade Parent upon terms and conditions that are substantially similar to those contained herein pursuant to either an amendment to this Agreement or a separate agreement; and the Ameritrade Companies hereby covenant and agree that, in the event that TD Parent shall acquire one or more additional FDIC-insured depository institution subsidiaries in the United States that qualify as Affiliates after the date of this Agreement, the Ameritrade Companies shall, at the request of TD Parent, enter into an amendment to this Agreement or a separate agreement for such additional depository institutions to provide services to the Ameritrade Companies that are substantially similar to those provided to such companies by the Depository Institutions (but not in lieu of the Depository Institutions) pursuant to the terms of this Agreement; provided, however, that (i) if a new agreement is entered into pursuant to this Section 15(p), the term of the new agreement shall be the term of this Agreement such that any expiration or termination of this Agreement shall

cause such new agreement to terminate simultaneously with this Agreement; and (ii) the parties shall negotiate in good faith the timing and order of deposit sweep allocation of Customer Account funds to the new depository institution or institutions; and (iii) the cost and effort to provide the necessary connectivity is substantially the same as that required between the Ameritrade Companies and the Depository Institutions.

(q) Each Depository Institution shall provide all of the services specified herein to be provided by the Depository Institution in accordance with industry practices; provided, however, that in the event any applicable regulation, statute or rule changes or any new applicable regulation, statute or rule is enacted, the parties shall negotiate in good faith to determine appropriate service levels.

(r) Each Depository Institution has provided, and while any Master Account is maintained will provide, the Ameritrade Companies with all information that each Depository Institution is required to provide Money Market Deposit Account holders under any federal or state law, rule or regulation governing savings deposits held under arrangements similar to that set forth herein. None of TDA, TDAC or TDATC shall have any responsibility for any omission on a Depository Institution’s part to notify the Ameritrade Companies or for any delay in notification, of any disclosure that is required to be distributed by a Depository Institution at the time of, or subsequent to, the date hereof.

16. Master Account Description, Statements and Disclosures.

(a) TDA and TDATC agree to provide each Customer with a description of the terms and conditions of the Master Accounts, substantially in the form of the Customer Disclosures referred to in Section 13(h), as the same shall be amended from time to time, prior to or simultaneously with the Customer’s election of the Money Market Deposit Account as the designated sweep vehicle. TDA and TDATC agree to provide any amendments to the Customer Disclosures to the Depository Institutions for their review and approval prior to providing the amended Customer Disclosures to Customers.

(b) TDA and TDATC agree to periodically provide each Customer with a statement on a monthly, quarterly or other basis permitted by law, which shall reflect each deposit to or withdrawal from the Customer Account during the previous period, the closing balance of such Customer Account at the end of the previous period, and the amount of interest earned on funds in such Customer’s Money Market Deposit Account during the previous period. The parties acknowledge that the Depository Institutions will have no responsibility for providing such periodic statements or for the completeness or accuracy thereof.

(c) TDA and TDATC agree to distribute all disclosures provided by the Depository Institutions pursuant to Section 15(r) hereof to the Customers.

(d) Upon establishment of a Money Market Deposit Account by a Customer, TDA or TDATC, as applicable, shall provide the Customer with information regarding the date of the initial deposit to the applicable Master Account, the name of the Depository Institution, and the fact that TDA or TDATC, as applicable, will receive from the Depository Institution the fee described in Section 5 hereof. The information may be furnished by TDA or TDATC, as applicable, in the form of a trade confirmation or a customer transaction statement.

17. Indemnification.

(a) Each Depository Institution agrees, severally and not jointly, to indemnify and hold harmless the Ameritrade Companies and their Affiliates, and their respective officers, directors, employees, agents and contractors, from and against any liability, claim, cost or expense (including court costs and attorneys’ fees) arising out of (i) such Depository Institution’s material breach of any of its representations, warranties, covenants or other agreements set forth in this Agreement and (ii) such Depository Institution’s gross negligence, fraud or intentional misconduct.

(b) The Ameritrade Companies agree, severally and not jointly, to indemnify and hold harmless the Depository Institutions and their Affiliates, and their respective officers, directors, employees, agents and contractors, from and against any liability, claim, cost or expense (including court costs and attorneys’ fees) arising out of (i) TDA’s, TDAC’s or TDATC’s material breach of any of TDA’s, TDAC’s or TDATC’s representations, warranties, covenants or other agreements set forth in this Agreement and (ii) TDA’s, TDAC’s or TDATC’s gross negligence, fraud or intentional misconduct.

(c) For purposes of this Section 17, the party obligated to provide the indemnity described in Sections 17(a) and 17(b) will be referred to as the “Indemnitor” and the party receiving the benefit of such indemnity will be referred to as the “Indemnitee.” The Indemnitee shall give the Indemnitor prompt notice of any claim for indemnification; provided, that the Indemnitee’s failure to give such prompt notice shall not relieve the Indemnitor of its indemnification obligation except to the extent that the Indemnitor was materially prejudiced by such failure. The Indemnitor shall have no obligation pursuant to Section 17(a) or 17(b), as applicable, unless the Indemnitee permits the Indemnitor to assume and control the defense of the related claim, suit, action or proceeding, with counsel chosen by the Indemnitor (who must be reasonably acceptable to the Indemnitee). The Indemnitor shall not enter into any settlement or compromise of any such claim, suit, action or proceeding without the Indemnitee’s prior written approval, which approval shall not be unreasonably withheld.

(d) Notwithstanding the foregoing, the Indemnitee may, at its own option and expense, employ counsel to monitor any claim for which it is entitled to indemnification under this Section 17, and counsel for the Indemnitor shall provide cooperation and assistance to such counsel for the purpose of apprising the Indemnitee of the status of such proceeding, including the status of settlement negotiations, if any. Nothing in this Agreement shall be deemed to limit or eliminate the right of a party at any time to waive indemnification to which it is otherwise entitled pursuant to this Section 17 by independently defending or settling any claim on its own behalf; provided, that the party exercising this right will provide the other party with prompt written notice of its intent to do so, and such party agrees that it will not be entitled to seek any other remedy against the other with respect to the subject matter of the claim for which it has waived indemnification.

(e) Notwithstanding any other provision herein, neither party will be liable to the other for:

(i) special, indirect, consequential, punitive, exemplary or incidental damages of the other party of any kind, including but not limited to lost profits, lost savings, and loss of use of facility or equipment, regardless of whether arising from breach of contract, warranty, tort, strict liability or otherwise, even if advised of the possibility of such losses or damages or if such losses or damages could have been reasonably foreseen, except in any such case for amounts awarded by a final judicial determination or settlement to third parties; or

(ii) any delay or failure to perform its obligations under this Agreement to the extent that such delays or failures result from causes or circumstances beyond its reasonable control, including, but not limited to, failure of electronic or mechanical equipment, strikes, failure of common carrier or utility systems, severe weather, market disruptions, or other causes commonly known as “acts of God”; in any such event, in order to be so excused from such delay or failure to perform, the party so affected must give notice of the cause of such delay or failure to the other party as promptly as practicable and use reasonable efforts to remedy the cause of such delay or failure if practicable and take all reasonable actions as may be appropriate to continue performance under this Agreement.

18. Termination; Related Procedures.

(a) The initial term of this Agreement shall expire on July 1, 2018 (the “Initial Expiration Date”) and will automatically renew for a term that is five (5) years from such Initial Expiration Date (for purpose of clarity, such initial renewal term would expire on July 1, 2023) and from each subsequent fifth anniversary of the prior expiration date unless, in the case of any such renewal term, the Ameritrade Companies, on the one hand, or the Depository Institutions, on the other hand, have given the other written notice of non-renewal at least two (2) years prior to (x) the Initial Expiration Date (for purposes of clarity, such date of notice being July 1, 2016), or (y) prior to the expiration date of any subsequent renewal term of this Agreement. If none of the parties gives written notice of non-renewal at least two (2) years prior to the end of a five-year renewal term, this Agreement shall automatically renew for a successive five-year term at the end of such renewal term.

(b) The Depository Institutions shall have the right to terminate this Agreement by written notice to the Ameritrade Companies (i) in order to comply with any order or directive received by the Depository Institutions or TD Parent from any applicable regulatory agency, including, without limitation, OSFI, the Federal Reserve, the OCC and the FDIC, to terminate this Agreement; or (ii) if there is a materially adverse regulatory development, including for purposes of Section 5(j) above, relating to the qualification of the deposits in the Master Accounts as savings deposits under 12 C.F.R. Section 204.2(d)(2).

(c) The Ameritrade Companies shall have the right to terminate this Agreement by written notice to the Depository Institutions (i) in the event that TD Parent fails to maintain capital at or above the then-applicable minimum capitalization ratio required by OSFI, as published from time to time by OSFI, (ii) in order to comply with any order or directive received by the Ameritrade Companies from any applicable regulatory agency, including,

without limitation, the Securities and Exchange Commission, the Financial Industry Regulatory Authority or the State of Maine, to terminate this Agreement, (iii) if there is a materially adverse regulatory development, or (iv) if Liquidity Reserve Levels are modified as set forth in Section 6(a) above.

(d) The Ameritrade Companies and the Depository Institutions shall each have the right to terminate this Agreement by written notice to the other if TD Parent no longer owns, directly or indirectly, a majority of the issued and outstanding shares of common stock of either or both of the Depository Institutions; provided, that the Ameritrade Companies shall not have a right of termination pursuant to this Section 18(d) as long as TD Parent, directly or indirectly, is able to provide the Ameritrade Companies through an Affiliate of TD Parent, without material interruption to their Customers, with Money Market Deposit Accounts on terms, including product terms, economics (including, but not limited to, pricing) and FDIC deposit insurance coverage, at least as favorable in all material respects as offered to the Ameritrade Companies hereunder immediately prior to the date on which the termination event provided for in this Section 18(d) first occurred. In the event of any right of termination pursuant to this Section 18(d), the Ameritrade Companies shall have the right to commence good faith negotiations to acquire the assets related to the Notional Investments at their respective fair market values pursuant to terms mutually agreed to in writing by the Ameritrade Companies and the Depository Institutions.

(e) The Ameritrade Companies and the Depository Institutions shall each have the right to terminate this Agreement by written notice to the other if any Depository Institution is deemed (x) “adequately capitalized,” as defined in 12 C.F.R. Section 337.6, and has failed to obtain the waiver referenced in 12 C.F.R. Section 337.6(c) within 180 days of such Depository Institution being deemed adequately capitalized, or (y) “undercapitalized,” as defined in 12 C.F.R. Section 337.6 or any lower category set forth therein; provided, that the Ameritrade Companies shall not have a right of termination pursuant to this Section 18(e) as long as TD Parent, directly or indirectly, is able to provide the Ameritrade Companies, through an Affiliate of TD Parent without material interruption to their Customers, with Money Market Deposit Accounts on terms, including product terms, economics (including, but not limited to, pricing) and FDIC deposit insurance coverage, at least as favorable in all material respects as offered to the Ameritrade Companies hereunder immediately prior to the date on which the termination event provided for in this Section 18(e) first occurred.

(f) In the event that any of TDA, TDAC or TDATC, on the one hand, or the Depository Institutions, on the other hand, materially breaches any of their respective covenants set forth in the first paragraph of Section 5(a) or in Sections 5, 6, 15(d), 15(g), 15(h), 15(i), 15(l), 15(n) or 15(r) of this Agreement, as applicable, and fails to cure such breach within 90 days of receipt of written notice of such breach from the non-breaching parties if any regulatory action is required to cure such breach (or, if no regulatory action is required to cure such breach, within 45 days of receipt of written notice of such breach), the non-breaching parties shall have the right to terminate this Agreement upon written notice to the breaching parties.

(g) The Depository Institutions shall have the right to terminate this Agreement under the terms of Section 5(f) by providing written notice to the Ameritrade Companies promptly upon arriving at the decision to terminate; provided, that upon any exercise

of such right, (i) the Marketing Fee shall be adjusted only if required as directed in writing by a federal bank regulatory agency with jurisdiction over the Depository Institutions in order for the Depository Institutions to be in compliance with Section 23B of the Federal Reserve Act, as amended, and applicable regulations thereunder, and (ii) no new accounts shall be accepted in the Master Accounts.

(h) Each of the parties agree that it will not exercise its right to terminate this Agreement (unless in the case of a termination pursuant to Section 18(b) or Section 18(c) an immediate termination of this Agreement is required to comply with any applicable law, regulation, order or directive) until the CEO of TDA and the CEO of TD Parent have had a reasonable opportunity to discuss the circumstances that give rise to the right of termination and are unable to resolve the matter within ninety (90) days after the referral of the matter to them.

(i) Any termination of this Agreement pursuant to Sections 18(a)-(g) shall become effective on the second anniversary of the exercise by the applicable parties of their right to terminate this Agreement (unless, in the case of a termination pursuant to Section 18(b) or Section 18(c)(ii), an earlier termination of this Agreement is required to comply with any applicable law, regulation, order or directive; or in the case of a termination pursuant to Section 18(g), if the Marketing Fee is required to be adjusted, then the Agreement shall immediately enter the “run-off” period described below), and, until the effectiveness date of such termination (the “two-year notice period”), this Agreement shall continue in full force and effect (subject to any regulatory restrictions with regard to the acceptance, renewal or roll over of deposits in the Master Accounts, if applicable). After such two-year notice period, or in the case of a termination pursuant to Section 18(g) if the Marketing Fee is required to be adjusted, this Agreement then shall enter a “run-off” period (unless and to the extent, in the case of a termination pursuant to Section 18(b) or Section 18(c)(ii), such run-off period is not permitted by applicable laws, regulations, orders or directives) in which (a) no incremental accounts shall be accepted in the Master Accounts; and (b) deposits in the Master Accounts shall be repaid ratably from each of the categories set forth in Section 6(a) based on the respective maturity schedules of the corresponding Notional Investments designated by TDA pursuant to Section 5(b) beginning with the earliest such maturity; provided that, for purposes of calculating the Marketing Fee payable to the Ameritrade Companies during this run-off period following the two-year notice period, any repayment of deposits that reduces a Notional Investment shall also reduce a pro rata portion of any corresponding Liquid Assets maintained by the Depository Institutions pursuant to Section 6 hereof.

(ii) TDA will reimburse the Depository Institutions, promptly upon their request from time to time, for losses resulting from or relating to reductions in deposit levels in the Master Accounts in excess of the run-off process specified in paragraph (ii) of this Section 18(h) in an amount equal to the sum, if positive, of (A) the Economic Replacement Value of the amount of such excess deposit run-off, plus (B) if and to the extent that such deposit run-off has resulted in the early termination of Notional Investments which exceed [CONFIDENTIAL TREATMENT REQUESTED] in principal amount , an amount equal to, for each investment security sold or disposed of as a result of such excess deposit run-off, [CONFIDENTIAL TREATMENT REQUESTED] . In connection with any reduction in Notional Investments and in the interest of minimizing losses to the extent practicable, the Depository Institutions shall use their reasonable best efforts to reallocate the corresponding assets and swaps or other derivatives to TD Parent or its other subsidiaries rather than selling, settling or terminating such assets, swaps and other derivatives.

(iii) During the two-year notice period referred to in Section 18(h), TDA and TDATC will no longer be required to make the Money Market Deposit Accounts at the Depository Institutions the default designated depository institution sweep vehicle to Customers. In the interest of an orderly transition, TDA and TDATC shall not be restricted (A) from transferring or reinvesting deposits from then-existing Customer Accounts to another depository institution in accordance with the agreed-upon transition plan referred to in paragraph (iv) of this Section 18(h) (B) from directing new sweep and deposit accounts to any other depository institution as part of its transition strategy or (C) from offering Customers the ability to sweep their available cash to free credits held at TDAC or to other products or venues.

(iv) Following notice of any termination of this Agreement pursuant to Section 18 hereof (and, if applicable, any specified cure period), the Depository Institutions and TDA and TDATC shall, as soon as practicable, use their reasonable best efforts in good faith to jointly develop and adopt a plan for the orderly transition of the deposits maintained in the Master Accounts to a successor depository institution or successor depository institutions consistent with the deposit payout schedule referred to in paragraph (i) of this Section 18(h).

(v) The right to terminate pursuant to this Section 18 shall not be deemed to be the exclusive remedy for breach of this Agreement but shall be in addition to all other remedies under this Agreement or available at law or in equity.

19. Survival. Following expiration or termination of this Agreement pursuant to Section 18 hereof, Sections 17, 19, 20, 23, 24, 25, 28, 29 and 31 shall survive any such expiration or termination. All other sections of this Agreement shall survive until the Master Accounts established at the Depository Institutions are closed.

20. Confidentiality.

(a) The Ameritrade Companies and the Depository Institutions mutually acknowledge that, in the course of their dealings with each other in connection with this Agreement, each may learn Confidential Information of or concerning the other party or third persons to whom the other party has an obligation of confidentiality. For the purposes of this Agreement, “Confidential Information” shall mean, with respect to any person, any confidential, business, trade secret, proprietary or other like information that is provided, produced or disclosed by such person in connection with performance of this Agreement, whether in written, electronic or oral form, whether tangible or intangible, and whether or not labeled or designated as “confidential.” Confidential Information also includes any information regarding the contents of this Agreement.

(b) Each party shall treat all Confidential Information received from the other party as proprietary, and shall not disclose such Confidential Information orally or in writing to any third party without the prior written consent of the other applicable party, and shall not appropriate any of such Confidential Information for its own use or for the use of any other

person. Without limiting the foregoing, each party agrees to take at least such precautions to protect the other party’s Confidential Information as it takes to protect its own Confidential Information, but in no event shall such precautions be less than reasonable or as required by applicable law.

(c) Upon the request of another party following the termination of the Agreement and the closing of the Master Accounts, each party shall (a) return to such other party all tangible items containing any of such other party’s Confidential Information, including all copies, abstractions and compilations thereof, and (b) remove from its computer systems any record in electronic form that contains any of such other party’s Confidential Information, including all copies, abstractions and compilations thereof, without retaining any copies of the items required to be returned. Any party may further require that the other parties certify in writing that they have fulfilled their obligations under this Section 20(c).

(d) Notwithstanding anything herein to the contrary, each party may keep records of the other parties’ Confidential Information for recordkeeping as required by applicable law; provided, that the confidentiality of all such Confidential Information is maintained in a manner consistent with the requirements of this Agreement. The obligations of this Section 20 extend to the employees, agents, service providers and subcontractors of each party and their respective Affiliates, and each party shall inform such persons of their obligations under this Section 20.

(e) Nothing in this Agreement shall be construed to restrict disclosure or use of any information otherwise constituting Confidential Information that: (a) was in the possession of or rightfully known by the recipient, without an obligation to maintain its confidentiality, prior to receipt from the other party; (b) is or becomes generally known to the public without violation of this Agreement; (c) is obtained by the recipient in good faith from a third person having the right to disclose it without an obligation of confidentiality; or (d) is independently developed by the receiving party without the participation of any persons who have had access to the other party’s Confidential Information.

(f) Each party shall, upon learning of any unauthorized disclosure or use of another party’s Confidential Information, notify such other party promptly and cooperate fully with such party in protecting its Confidential Information.

(g) If any party believes it is required, by applicable law or by a subpoena or order of a court, regulatory agency or self-regulatory organization having appropriate jurisdiction, to disclose any of another party’s Confidential Information, subject to applicable law that may prohibit the rendering of such notification, it shall promptly notify the applicable party prior to any disclosure and shall make all reasonable efforts to allow such other party an opportunity to seek a protective order or other judicial relief. Despite any contrary provision in this Agreement, if the party seeking to prevent disclosure of such Confidential Information does not obtain a protective order or other judicial relief within a reasonable period of time, the party required to disclose the Confidential Information may disclose such information only to the extent required and will continue to treat the Confidential Information in accordance with this Agreement for all other purposes. Notwithstanding the foregoing and in connection with the Depository Institutions’ compliance with Regulation D, if a Depository Institution receives a

request for information regarding a Customer Account at such Depository Institution from a federal bank regulatory agency with jurisdiction over such Depository Institution, the Depository Institution will inform TDA and TDAC or TDATC, as applicable, of the request and TDA and TDAC or TDATC, as applicable, will provide the information sought as soon as possible, but in any event within ten (10) days. Notwithstanding anything in this Agreement to the contrary, nothing in this Agreement will prevent a party from disclosing any Confidential Information to any regulatory authority having jurisdiction over it or its subsidiaries in connection with ordinary course reporting/discussions between it or its subsidiaries and such authorities, or as may otherwise be required by law or regulation and, accordingly, the prohibitions of disclosure, obligations of notice and related provisions in this Agreement do not apply to any such disclosure to any such regulatory authority.

(h) Each party, with reasonable notice to the other parties and during normal business hours, shall have the right to inspect the other parties’ books and records relating to this Agreement in order to monitor the other parties’ compliance with applicable privacy policies, laws and regulations. The party requesting the inspection shall bear all costs in connection with such inspection. Each party agrees that it shall not interfere with the ordinary and normal course of the other parties’ business in conducting the inspection.

(i) The parties acknowledge that disclosure of any Confidential Information by the party receiving it will cause irreparable injury to the disclosing party, its customers and other persons, and is inadequately compensable in monetary damages. Accordingly, a party may seek injunctive relief in any court of competent jurisdiction for the breach or threatened breach of this Section 20, in addition to any other remedies in law or equity, and no party will raise the defense of an adequate remedy at law in opposition to any such petition for injunctive relief. This Section 20(i) shall not apply to disclosures required by applicable law, as provided in, and under the conditions of Section 20(g) hereof.

21. Notices.

(a) All notices under the Agreement will be in writing and will be sent:

if to TD Bank USA, to:

TD Bank USA, National Association

1701 Route 70 East

Cherry Hill, NJ 08034

Attention: General Counsel

Facsimile: ****

if to TD Bank, to:

TD Bank, National Association

1701 Route 70 East Cherry Hill, NJ 08034Attention: General Counsel

Facsimile: ****

if to TD Parent, to:

The Toronto-Dominion Bank

66 Wellington Street West, 4th Floor

Toronto, Ontario M5K 1A2, Canada

Attention: General Counsel

Facsimile: ****

if to TDA, to:

TD Ameritrade, Inc.

c/o TD Ameritrade Holding Corporation

4211 South 102nd Street

Omaha, Nebraska 68127

Attention: Chief Financial Officer

Facsimile: ****

if to TDAC, to:

TD Ameritrade Clearing, Inc.

4211 South 102nd Street

Omaha, Nebraska 68127

Attention: Chief Financial Officer

Facsimile: ****

if to TDATC, to:

TD Ameritrade Trust Company

6940 Columbia Gateway Drive, Suite 200

Columbia, Maryland 21046

Attention: General Counsel

Facsimile: ****

and, a copy to:

TD Ameritrade Holding Corporation

6940 Columbia Gateway Drive, Suite 200

Columbia, Maryland 21046

Attention: General Counsel

Facsimile: ****

(b) All notices to be sent or delivered hereunder shall be deemed to be given or become effective for all purposes of this Agreement as follows: (i) when delivered in person, when delivered; (ii) when sent by registered, certified or express mail, on the earlier of the third Business Day after the date of deposit in the United States mail or the date of receipt; and (iii) when sent by telegram, telecopy, overnight delivery or other form of rapid transmission, when receipt of such transmission is received by the sender.

22. Expenses. Except as otherwise set forth herein, each party hereto shall pay its own expenses incident to the preparation, execution and performance of this Agreement and the consummation of the transactions contemplated herein.

23. Governing Law. This Agreement and all rights and obligations of the parties hereunder shall be governed by and construed in accordance with the laws of the State of New York.

24. Assignment. None of TDA, TDAC or TDATC, on the one hand, or the Depository Institutions, on the other hand, may assign its rights or delegate its duties under this Agreement, either in whole or in part, without the prior written consent of the other party; provided, however, that such consent shall not be required for an assignment by: (i) TDA, TDAC or TDATC to any entity that is an Affiliate of, or successor entity to, TDA, TDAC or TDATC, or to a purchaser of all or substantially all of the assets of TDA, TDAC or TDATC, as applicable; or (ii) any Depository Institution to another depository institution that is an Affiliate of TD Parent in order to effectuate the terms set forth under the provisos found in Sections 18(d) and 18(e) which limit the Ameritrade Companies right to terminate. Notwithstanding anything to the contrary contained herein, TD Parent may assign this Agreement to another depository institution that is an Affiliate of TD Parent provided that it receives the prior written consent of the Ameritrade Companies, which consent will not be unreasonably withheld. Any attempted assignment or delegation in violation of this Section 24 shall be void. This Agreement shall be binding upon all successors and permitted assigns of each party, irrespective of any change with regard to the name of or the personnel of any party.

25. Court Fees and Damages. In the event of suit by any of the parties to enforce this Agreement, the prevailing party shall be entitled to such court costs and attorneys’ fees as the court deems reasonable.

26. Entire Agreement. This Agreement, together with all exhibits and schedules attached hereto, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements, negotiations, representations and proposals, whether written or oral, with the exception of: (i) any confidentiality agreements that may have been entered into by the parties prior to the execution of this Agreement; (ii) the Amended and Restated Cash Management Services Agreement, dated November 1, 2011, by and between TDA and TD Bank USA (the “CMS Agreement”); (iii) that certain letter agreement, dated February 15, 2012, by and between TDA and TD Bank USA, setting forth certain understandings relating to the CMS Agreement; (iv) that certain letter agreement, dated March 15, 2011, as may be amended from time to time, by and among TD Parent, TD Bank, TD Bank USA and the Ameritrade Companies, with respect to anti-money laundering compliance and other matters set forth therein; and (v) that certain letter confirmation, dated December 17, 2009, from TD Bank to TDAC, and that certain letter confirmation, dated December 17, 2009, from TD Bank USA to TDAC, each confirming certain matters with respect to the TDAC Customer Accounts identified therein.

27. Invalidity. If any provision or condition of this Agreement is held invalid or unenforceable by any court or regulatory agency, such invalidity or unenforceability attaches only to such provision or condition, and the validity of the remaining provisions and conditions remain unaffected and shall be enforced to the fullest extent permitted by applicable law or regulation.

28. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

29. Headings. The division of this Agreement into sections, clauses, paragraphs or subdivision and the insertion of headings are for convenience only and shall not affect the construction or interpretation. This Agreement shall be read and interpreted with all changes of gender or number required by the context to the ordinary and usual meanings of words, but words with recognized technical or trade meanings shall be interpreted according to such recognized meanings.

30. References to Statutes, Rules or Regulations. Any reference to a statute, rule or regulation in this Agreement is deemed also to refer to any amendment or successor provision to that statute, rule or regulation.

31. Gramm-Leach-Bliley Compliance and Related Matters.

(a) The Depository Institutions and the Ameritrade Companies hereby acknowledge that they are subject to the privacy regulations under Title V of the Gramm-Leach-Bliley Act, 15 U.S.C. Section 6801 et seq., pursuant to which regulation the Ameritrade Companies are required to obtain certain undertakings from the Depository Institutions, and the Depository Institutions are required to obtain certain undertakings from the Ameritrade Companies, with regard to the privacy, use and protection of nonpublic personal financial information of their respective Customers or prospective customers. Therefore, notwithstanding anything to the contrary contained in this Agreement, the Depository Institutions and the Ameritrade Companies agree that (i) they shall not disclose or use any Customer Data except to the extent necessary to carry out obligations under this Agreement and for no other purpose; (ii) they shall not disclose Customer Data to any third party, including, without limitation, third party service providers without the prior consent of each other and an agreement in writing from the third party to use or disclose such Customer Data only to the extent necessary to carry out the Depository Institutions’ obligations or the Ameritrade Companies’ obligations under this Agreement, and for no other purposes; (iii) they shall maintain, and shall require all third parties approved under clause (ii) to maintain, effective information security measures to protect Customer Data from unauthorized disclosure or use; and (iv) they shall provide each other with information regarding such security measures upon reasonable request and promptly provide information regarding any failure of such security measures or any security breach related to Customer Data. The Ameritrade Companies further agree to provide all Customers with copies of the Ameritrade Companies’ privacy policies as in effect from time to time, and comply with the provisions of such policies. In furtherance of the foregoing, the Ameritrade Companies agree to take appropriate remedial actions upon the occurrence of any breach of such privacy policies or any federal or state privacy, customer information security or similar laws, regulations or guidelines. The obligations set forth in this Section 31 shall survive termination of this Agreement.

(b) For purposes of this Agreement, “Customer Data” means the nonpublic personal information (as defined in 15 U.S.C. Section 6809(4)) of TDA, TDAC or TDATC Customers or prospective customers (and/or TDA’s, TDAC’s and TDATC’s respective Affiliates) received by a Depository Institution, or of a Depository Institution’s customers or prospective customers received by TDA, TDAC or TDATC, in connection with the performance of obligations under this Agreement, including, but not limited to (i) an individual’s name, address, e-mail address, IP address, telephone number and/or social security number; (ii) the fact that an individual has a relationship with such Depository Institution, TDA, TDAC or TDATC and/or its respective Affiliates; or (iii) an individual’s account information.

(c) The Ameritrade Companies and the Depository Institutions may disclose Customer Data (i) pursuant to a request by any governmental or regulatory agency or individual body having authority or jurisdiction over TDA, TDAC, TDATC or the Depository Institutions, as the case may be, pursuant to a request or order under applicable laws or regulations, and (ii) to regulatory examiners, their Affiliates, auditors, and counsel in connection with the transactions contemplated hereby. In the event a subpoena or other legal process concerning Customer Data disclosed by a Depository Institution to TDA, TDAC or TDATC, or TDA, TDAC or TDATC to the Depository Institution, is served upon TDA, TDAC or TDATC or a Depository Institution, as the case may be, TDA, TDAC or TDATC or such Depository Institution, as the case may be, agrees that it will notify the other promptly upon receipt of such subpoena or other legal process and will reasonably cooperate with the other in any lawful effort by the other to contest the legal validity of such subpoena or other legal process.

32. Litigation.

(a) TDA, TDAC and TDATC, as applicable, will promptly advise the Depository Institution of any legal or administrative action of which TDA, TDAC or TDATC, as applicable, obtain knowledge by any state or federal court, agency or authority taken or threatened to be taken that would preclude, limit or otherwise restrict the offering of the Money Market Deposit Accounts as contemplated by this Agreement.

(b) Each Depository Institution will promptly advise the Ameritrade Companies of any legal or administrative action of which the Depository Institution obtains knowledge by any state or federal court, agency or authority, taken or threatened to be taken that would preclude or limit or otherwise restrict the offering of the Money Market Deposit Accounts as contemplated by this Agreement.

33. No Recourse to TDA, TDAC or TDATC. It is understood and agreed that none of TDA TDAC or TDATC is a guarantor of, and shall in no way be liable to perform, the obligations of the Depository Institutions under the Master Accounts.

34. Business Continuity Plan. Each of the Depository Institutions and the Ameritrade Companies warrants that it has and will maintain throughout the term of this Agreement a written business continuity plan (“BCP”) to enable it to recover and resume the services provided by it to the other party or parties under this Agreement within one Business Day in the event of any disruptive event. Each of the Depository Institutions and the Ameritrade Companies further represents and warrants that it has tested its BCP and will continue to conduct sufficient ongoing verification testing for the recovery and resumption of services provided to the other party or parties under this Agreement and will update its BCP at least annually. Each party will notify the other party or parties within 30 days of any material alterations to its BCP that would impair its ability to recover and resume any interrupted services it provides to the other party or parties. Upon request by the other party or parties, each party will provide to the other party or parties a description of its BCP procedures as they relate to the recovery and resumption of the services provided to the other party or parties accompanied by a written certification that the BCP has undergone review and testing to account for any changes to such services. Each party will promptly notify the other party or parties of any actual, threatened, or anticipated event that does or may disrupt or impact the services provided by it to the other party or parties pursuant to this Agreement and will cooperate fully with the other party or parties to minimize any such disruption and promptly restore and recover the services.

35. Amendments. The terms of this Agreement cannot be modified, supplemented or rescinded by a party to this Agreement except in writing signed by each party to be bound by such modification, supplement or rescission.

36. Benefit of the Parties. This Agreement is entered into for the sole and exclusive benefit of the parties hereto. Nothing in this Agreement shall be construed to grant any person other than the parties hereto, and their respective successors and permitted assigns, any right, remedy or claim under or with respect to this Agreement or any provision hereof.

37. No Agency. Each party represents and warrants that it is an independent contractor with no authority to contract for the other party or in any way to bind or to commit the other party to any agreement of any kind or to assume any liabilities of any nature in the name or on behalf of the other party. Under no circumstances will either party, or any of its employees, hold itself out as or be considered an agent, employee, partner or joint venturer of the other party.

38. No Waiver. The failure of any party to require performance by another party of any provision of this Agreement shall in no way affect the full right to require such performance at any time thereafter. All rights or remedies of a party specified in this Agreement and all other rights or remedies that either party may have at law, in equity or otherwise shall be distinct, separate and cumulative rights or remedies, and no one of them, whether exercised by the party seeking enforcement or not, shall be deemed to be in exclusion of any other right or remedy of such party.

39. Amendment and Restatement of Prior Agreements. Each of TD Bank USA, TD Bank, TDA, TDAC, TDATC and TD Parent hereby agree that this Agreement amends, restates and supersedes the Amended and Restated Money Market Deposit Account Agreement, dated as of August 2, 2006, and the Insured Deposit Account Agreement, dated as of December 19, 2009, both of which are superseded and of no further force or effect.

40. Authorized Representative of Ameritrade Companies. Whenever any provision of this Agreement requires the Depository Institutions or TD Parent to give any notice or instructions to or receive notice or instructions from the Ameritrade Companies, the Depository Institutions and TD Parent may give such notice or instructions or rely on such notice or instructions from TDA, acting on behalf of the Ameritrade Companies, unless otherwise instructed by TDA, TDAC or TDATC in writing.

[Remainder of page intentionally left blank]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers effective as of the date first above written.


TD BANK USA, NATIONAL ASSOCIATION

By:		/s/ Steve Boyle
Name:		Steve Boyle
Title:		Chief Financial Officer


TD BANK, NATIONAL ASSOCIATION

By:		/s/ Steve Boyle
Name:		Steve Boyle
Title:		Chief Financial Officer


TD AMERITRADE, INC.

By:		/s/ William J. Gerber
Name:		William J. Gerber
Title:		Chief Financial Officer


TD AMERITRADE CLEARING, INC.

By:		/s/ William J. Gerber
Name:		William J. Gerber
Title:		Chief Financial Officer


TD AMERITRADE TRUST COMPANY

By:		/s/ William J. Gerber
Name:		William J. Gerber
Title:		Chairman


THE TORONTO-DOMINION BANK (solely with respect to Sections 7(b), 14 and 15(c))

By:		/s/ Riaz Ahmed
Name:		Riaz Ahmed
Title:		Group Head, Corporate Development, Enterprise Strategy and Treasury

Exhibit A

The yield used to calculate the amount to be paid to TDA, TDAC and TDATC in accordance with Section 5 of the Agreement shall be computed as follows:

The yield accrued on the outstanding balances of Notional Investments (Note 1) during the calendar month preceding the calculation date; plus

The Daily Float Crediting Rate multiplied by the ending daily balance of Float Rate Assets (Note 2) during the calendar month preceding the calculation date, plus

The monthly equivalent yield earned on CRA Assets (Note 3) multiplied by the average monthly balance of (a) TD Bank USA’s CRA Assets and (b) the pro rata portion of TD Bank’s CRA Assets corresponding to those Master Accounts maintained at TD Bank, in each case for the month preceding the calculation date. In the event the parties agree to change the order of utilization of the Depository Institutions for the Master Accounts, the Ameritrade Companies’ obligation for CRA Assets shall remain based on the pro rata portion of each Depository Institution’s CRA Assets corresponding to those Master Accounts maintained at the Depository Institution.

Note 1 . From time to time, in accordance with Section 5 of the Agreement, Notional Investments may be added to the Notional Investment portfolio. The yield on each Notional Investment will be equal to the rate that would be earned in the fixed leg of a USD receive fixed swap transaction with identical balance and maturity to the new Notional Investment, including adjustments or concessions that would be required to adjust the pay float leg of such swap to a one month reset frequency and the overall swap payment frequency to monthly, in each case, based on such rate displayed on the applicable Bloomberg screen (the “Yield”) at the time that a written confirmation is sent by the Depository Institutions to TDA pursuant to Section 5(c) (or, in the case of any portion of a Permitted Notional Investment for which yields have not been determined and credited by the close of business on the tenth Business Day after the Depository Institutions have received the related notice of designation, the Yield shall be such rate displayed on the applicable Bloomberg screen at the close of business on such tenth Business Day).

In the event the following two conditions are met: (1) the US Federal Funds Effective Rate is established at 0.75% or greater, and (2) the rate on 5 year U.S. dollar interest rate swaps is equal to or greater than 1.50% for 20 consecutive business days, then the Notional Investment crediting rate or calculated yield derived above and payable to TD Ameritrade on New Notional Investments if the crediting rate is greater than or equal to 1.50%, regardless of tenor, will be adjusted by an amount as follows:

Notional Investment yield adjustment = (5 Year US Swap Rate – 1.50%) * 20%

Notwithstanding the results of this calculation, the yield adjustment may not exceed 0.10% (10 basis points).

This yield adjustment will be retroactive to the first day the rate on 5 year U.S. dollar interest rate swaps is equal to or greater than 1.50%, and applied to any Notional Investment implemented in the period during which the two conditions are met.

Note 2 . Float Rate Assets allocable to Master Account funds will be equal to daily Master Account balance for the month less monthly average balance of CRA Assets and daily Notional Investment balance. The Daily Float Crediting Rate will be equal to the greater of (i) the Interest Rate Paid on Excess Reserve Balances and (ii) the Federal Funds Rate.

For purposes of this Exhibit A , “Interest Rate Paid on Excess Reserve Balances” means the interest rate paid by the Federal Reserve Banks on balances held in excess of required reserve balances and contractual clearing balances under Regulation D, as published on the applicable Federal Reserve website page (www.federalreserve.gov/monetarypolicy/reqresbalances.htm), as updated from time to time generally on the last Wednesday of the reserve maintenance period at 4:30 p.m. (New York City time), or any successor page.

For purposes of this Exhibit A , “Federal Funds Rate” means the rate per annum (rounded upwards, if necessary, to the next higher 1/100th of 1%) representing the daily effective federal funds rate, as published in Federal Reserve Statistical Release H.15 (http://www.federalreserve.gov/releases/h15/data.htm) or any successor or substitute publication selected by the Depository Institutions. If, for any reason, such rate is unavailable, then “Federal Funds Rate” shall mean a daily rate that is determined, in the opinion of the Depository Institutions, to be the rate at which federal funds are being offered for sale in the national federal funds market at 9:00 a.m. (New York City time).

Note 3 . CRA Assets are those loans and other assets acquired in order to comply with the Community Reinvestment Act of 1977, as amended (12 U.S.C. Section 2901 et seq.), and identified on the records of and tracked by the Depository Institutions.

A-2

Exhibit B

For purposes of Section 5(a) of the Agreement, the Service Fee referred to in the second paragraph thereof, as it relates to deposits of less than or equal to $20 billion in the Master Accounts kept in float or invested in Notional Investments with a maturity of up to 24 months, shall be calculated as follows:

Service Fee for float investments = the sum of the Daily Float Crediting Rate (as defined in Note 2 of Exhibit A) less FDIC Insurance assessments paid (in basis points) divided by two.

Service Fee for fixed rate investments up to 24 months as referenced above = the sum of the Notional Investment crediting rate (as defined in Note 1 of Exhibit A) less FDIC Insurance assessments paid (in basis points) divided by two.

The Service Fee shall have a floor of 3 basis points, unless modified as provided below, and a maximum of 25 basis points.

The 3 basis point factor referred to above shall be adjusted from time to time to reflect material changes to the Depository Institutions’ demonstrated Tier 1 leverage costs. The parties agree to negotiate in good faith, not less than once each calendar year, the terms of any such adjustment.

[CONFIDENTIAL TREATMENT REQUESTED]

A-3

Exhibit C

Tax-Exempt Municipal Bond Tax Benefit Calculation

The parties agree to share the tax benefit generated by the Tax-Exempt Municipal Bond portfolio in accordance with the following calculation:*

1.	Divide the Book Value of Tax-Exempt Municipal Bonds by Total Balance Sheet Assets.

2.	Multiply the quotient obtained in (1) above by Total Income Statement Interest Expense to equal interest allocated.

3.	Subtract from the amount calculated in (2) above the interest allocated from total Tax-Exempt Municipal Bond Interest Income. The result equals the Net Schedule M1 adjustment.

4.	Multiply the Net Schedule M1 adjustment by the Federal Tax Provision Rate. The product equals the full bank legal entity benefit.

5.	Multiply the full legal bank entity tax benefit by 50%. The product equals the amount of the tax benefit to be added to the Marketing Fee.

Definitions :

“Book Value of Tax-Exempt Municipal Bonds”

Par value net of outstanding premiums and discounts

“Total Balance Sheet Assets”

Total U.S. GAAP Assets of TD Bank USA or TD Bank, as appropriate

“Total Interest Expense”

Total U.S. GAAP interest expense of TD Bank USA or TD Bank, as appropriate

“Total Tax-Exempt Municipal Bond Interest Income”

Total U.S. GAAP accrued interest net of amortized premiums and accreted discounts

“Federal Tax Provision Rate”

As calculated by external tax preparer

Although the CRA Assets are not currently invested in municipal securities deemed to be “bank qualified” as defined under the Internal Revenue Code, in the event that any of the municipal securities comprising the CRA Assets are determined to be “bank qualified,” the parties shall modify the formula to reflect the appropriate tax treatment of such “bank qualified” municipal securities.

Exhibit D

Economic Replacement Value Calculation

Section 5(c) of the Agreement provides that in the event funds underlying a particular Notional Investment are withdrawn prior to the maturity of the investment, TDA, TDAC and TDATC, as appropriate, shall reimburse the Depository Institutions in an amount equal to the Economic Replacement Value, if positive, on the principal amount withdrawn to the applicable Depository Institution. Economic Replacement Value may also be calculated for purposes of Sections 6(d) and 18(h)(ii). The parties agree that the following is an example of how Economic Replacement Value shall be calculated:

The below calculator shows on January 14, 2009, entering a 4-year received fixed swap with a notional of USD$100 million. The swap starts on January 14, 2009 and matures on January 14, 2013. The payment frequency is monthly. The at-the-market swap (fixed) rate is 1.64744% (which can be seen at bottom right corner “Par Cpn”). Another way of telling it is an at-the-money swap is its “Market Value” is close to zero. The fixed rate is determined by the “bid” side of the swap curve and the float side is discounted based on the “ask” side of the swap curve. The calculator has taken the 1-month/3-month basis into account.

LOGO

The next screen shows the swap on March 27, 2009 to be settled on March 31 (two Business Day settlement):

LOGO

In this example, the Economic Replacement Value would be a loss of $338,431.78 (which can be seen at the bottom “Market Value.” This is done by taking the “ask” side of the swap curve on March 27, 2009 (middle part of the screen, the row that says “Valuation”) and the “bid” side for the float leg. The negative marked-to-market is due to the fact that rates have risen, the yield to maturity has risen to 1.75469% (bottom right “Par Cpn”).

This is for illustration purposes taking the end-of-day yield curves on those two dates. The Bloomberg calculator is flexible to put in any yield curve.

C-2

Exhibit E

Methodology for Calculating Applicable FDIC Deposit Insurance Premium Assessments

To determine the total base assessment for the Depository Institutions, divide the FDIC deposit insurance premium assessments for the Depository Institutions by the total deposits of the Depository Institutions and multiply by total sweep deposits of the Depository Institutions (the “Base Assessment”).

The Base Assessment shall be recalculated by [CONFIDENTIAL TREATMENT REQUESTED]

The FDIC assessment is invoiced quarterly in arrears. TD Bank will apply the most recent assessment received in the monthly fee statement and reconcile assessment received in the monthly fee statement and reconcile quarterly upon receipt of the actual invoice from the FDIC according to the following:

Fee Statement Month

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sept.

Oct.

Nov.

Dec.

FDIC Assessment Applied

Sep.

Dec.

Mar.

Jun.

Quarterly Reconciliation

Sep.
invoice

Dec.
invoice

Mar.
invoice

Jun.
invoice

EXHIBIT 10.2

TD AMERITRADE HOLDING CORPORATION

AMENDMENT TO FREDRIC J. TOMCZYK EMPLOYMENT AGREEMENT

This amendment (the “ Amendment ”) is made by and between Fredric J. Tomczyk (“ Executive ”) and TD Ameritrade Holding Corporation (the “ Company ,” and together with Executive, the “ Parties ”) on the dates set forth below.

W HEREAS , the Parties entered into an amended and restated employment agreement dated May 18, 2008 (the “ Employment Agreement ”);

W HEREAS , the Company and Executive desire to amend certain provisions of the Employment Agreement to come into documentary compliance with Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ”), and the final regulations and guidance promulgated thereunder (together, “ Section 409A ”).

N OW , T HEREFORE , for good and valuable consideration, Executive and the Company agree that the Employment Agreement is hereby amended as follows.

1. Release of Claims . Section 9(a) of the Employment Agreement is amended and restated in its entirety to provide the following:

“(a) Conditions to Receipt of Severance. The receipt of any severance pursuant to Section 8 will be subject to Executive signing and not revoking a separation and release of claims agreement in substantially the form attached as Exhibit A, but with any appropriate reasonable modifications, reflecting changes in applicable law, as is necessary to provide the Company with the protection it would have if the release were executed as of the Effective Date (the “Release”). The Release must become effective and irrevocable no later than sixty (60) days following Executive’s termination of employment with the Company (the “Release Deadline Date”). If the Release does not become effective and irrevocable by the Release Deadline Date, Executive will forfeit any right to severance payments or benefits under this Agreement. In no event will severance payments or benefits be paid or provided until the Release becomes effective and irrevocable. The Company agrees that it will execute and deliver to Executive said Release no later than eight (8) days after it receives a copy of such agreement executed by Executive. Company agrees that it will be bound by such Release and that same will become effective from and after the “Effective Date” thereof (as defined in Section 28 of such Release), even if Company fails or refuses to execute and deliver same to Executive. The receipt of any severance pursuant to Section 8 will also be subject to, during the Employment Term and the Restricted Period, Executive complying with the non-solicitation and non-competition requirements of Section 9(b). Provided that the Release becomes effective and irrevocable by the Release Deadline Date, the severance payments set forth in Section 8 will be paid on, or in the case of installments, will commence on, the sixtieth (60 ^th ) day following Executive’s termination of employment with the Company, and any

severance payments otherwise payable to Executive during the sixty (60) day period immediately following Executive’s termination of employment with the Company will be paid in a lump sum to Executive on the sixtieth (60 ^th ) day following Executive’s termination of employment with the Company, with any remaining payments to be made as provided in this Agreement. For purposes of this Agreement, any reference to Executive’s termination of employment with the Company will mean a separation from service within the meaning of Section 409A of the Code.”

2. Full Force and Effect . To the extent not expressly amended hereby, the Employment Agreement shall remain in full force and effect.

3. Entire Agreement . This Amendment and the Employment Agreement constitute the full and entire understanding and agreement between the Parties with regard to the subject matter hereof and thereof. This Amendment may be amended at any time only by mutual written agreement of the Parties.

4. Counterparts . This Amendment may be executed in counterparts, all of which together shall constitute one instrument, and each of which may be executed by less than all of the parties to this Amendment.

5. Governing Law . This Amendment will be governed by the laws of the State of New York (with the exception of its conflict of laws provisions).

I N W ITNESS W HEREOF , each of the Parties has executed this Amendment, in the case of the Company by its duly authorized officer, on the dates set forth below.


TD A MERITRADE H OLDING C ORPORATION		E XECUTIVE

EVP, Chief Human Resources Officer		/s/ Fredric J. Tomczyk

By:	/s/ Karen Ganzlin

Date:	December 19, 2012	Date:	December 19, 2012

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EXHIBIT 10.3

TD AMERITRADE HOLDING CORPORATION

AMENDMENT TO MARVIN W. ADAMS TERM SHEET

This amendment (the “ Amendment ”) is made by and between Marvin W. Adams (“ Executive ”) and TD Ameritrade Holding Corporation (the “ Company ,” and together with Executive, the “ Parties ”) on the dates set forth below.

W HEREAS , the Parties entered into the term sheet agreement dated April 11, 2011 (the “ Term Sheet ”);

W HEREAS , the Company and Executive desire to amend certain provisions of the Term Sheet to come into documentary compliance with Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ”), and the final regulations and guidance promulgated thereunder (together, “ Section 409A ”).

N OW , T HEREFORE , for good and valuable consideration, Executive and the Company agree that the Term Sheet is hereby amended as follows.

1. Release of Claims . The section titled “Termination” of the Term Sheet is amended to add the following at the end of such section:

“The Separation and Release of Claims Agreement (the “Release”) must become effective and irrevocable no later than sixty (60) days following Executive’s termination of employment with the Company (the “Release Deadline Date”). If the Release does not become effective and irrevocable by the Release Deadline Date, Executive will forfeit any right to the severance payments or benefits set forth above. In no event will severance payments or benefits be paid or provided until the Release becomes effective and irrevocable. Provided that the Release becomes effective and irrevocable by the Release Deadline Date, the severance payments set forth above will be paid on, or in the case of installments, will commence on, the sixtieth (60 ^th ) day following Executive’s termination of employment with the Company, and any severance payments otherwise payable to Executive during the sixty (60) day period immediately following Executive’s termination of employment with the Company will be paid in a lump sum to Executive on the sixtieth (60 ^th ) day following Executive’s termination of employment with the Company, with any remaining payments to be made as provided above. Any reference to Executive’s termination of employment with the Company will mean a separation from service within the meaning of Code Section 409A.”

2. Full Force and Effect . To the extent not expressly amended hereby, the Term Sheet shall remain in full force and effect.

3. Entire Agreement . This Amendment and the Term Sheet constitute the full and entire understanding and agreement between the Parties with regard to the subject matter hereof and thereof. This Amendment may be amended at any time only by mutual written agreement of the Parties.

5. Governing Law . This Amendment will be governed by the laws of the State of New York (with the exception of its conflict of laws provisions).

I N W ITNESS W HEREOF , each of the Parties has executed this Amendment, in the case of the Company by its duly authorized officer, on the dates set forth below.


TD A MERITRADE H OLDING C ORPORATION		E XECUTIVE

EVP, Chief Human Resources Officer		/s/ Marvin W. Adams

By:	/s/ Karen Ganzlin

Date:	December 19, 2012	Date:	December 19, 2012

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EXHIBIT 10.4

TD AMERITRADE HOLDING CORPORATION

AMENDMENT TO ELLEN L.S. KOPLOW EMPLOYMENT AGREEMENT

This amendment (the “ Amendment ”) is made by and between Ellen L.S. Koplow (“ Executive ”) and TD Ameritrade Holding Corporation (the “ Company ,” and together with Executive, the “ Parties ”) on the dates set forth below.

W HEREAS , the Parties entered into an amended and restated employment agreement dated October 13, 2008 (the “ Employment Agreement ”);

N OW , T HEREFORE , for good and valuable consideration, Executive and the Company agree that the Employment Agreement is hereby amended as follows.

1. Release of Claims . Section 9(a) of the Employment Agreement is amended and restated in its entirety to provide the following:

2. Full Force and Effect . To the extent not expressly amended hereby, the Employment Agreement shall remain in full force and effect.

5. Governing Law . This Amendment will be governed by the laws of the State of New York (with the exception of its conflict of laws provisions).

I N W ITNESS W HEREOF , each of the Parties has executed this Amendment, in the case of the Company by its duly authorized officer, on the dates set forth below.


TD A MERITRADE H OLDING C ORPORATION		E XECUTIVE

EVP, Chief Human Resources Officer		/s/ Ellen L.S. Koplow

By:	/s/ Karen Ganzlin

Date:	December 20, 2012	Date:	December 20, 2012

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EXHIBIT 10.5

TD AMERITRADE HOLDING CORPORATION

RESTRICTED STOCK UNIT AGREEMENT

TD Ameritrade Holding Corporation (the “Company”) hereby grants you, Fredric J. Tomczyk (the “Grantee”), the number of Restricted Stock Units indicated below under the Company’s 1996 Long-Term Incentive Plan (the “Plan”). Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Restricted Stock Unit Agreement (the “Agreement”) and each Appendix. Subject to the provisions of Appendix A and B (attached) and of the Plan, the principal terms of this grant are as follows:



Grant Date:		[Date]

Total Number of

Restricted Stock Units:		[Number]

		This reflects the total number of Restricted Stock Units granted to you on the Grant Date, and shall be increased as of any date by the cumulative number of additional Restricted Stock Units, if any, credited by this Agreement through such date in payment of Dividend Equivalent Rights as described in paragraph 30 of Appendix A (attached) to this Agreement. *

Scheduled Vesting:		The Restricted Stock Units will vest in accordance with the schedule set forth in Appendix A and B (attached) and provisions of the Plan and this Agreement.

Settlement Date:		One Share will be issued for each Restricted Stock Unit that has vested on the Vesting Date specified in Appendix A and B (or on a date as soon as practicable, and no more than thirty (30) days, thereafter).

Acceptance:		You must accept this grant of Restricted Stock Units prior to the Acceptance Deadline, which is sixty (60) days from the Grant Date.

*Except as otherwise provided in this Agreement, or by the terms of the Plan, you will not vest in the Restricted Stock Units unless you remain employed by the Company or one of its Related Entities through the applicable Vesting Date.

Your signature below indicates your agreement and understanding that this grant is subject to all of the terms and conditions contained in the Plan and this Agreement, including Appendix A and Appendix B. Important additional information on vesting, forfeiture and the actual issuance of the Shares in settlement of the Restricted Stock Units covered by this grant are contained in paragraphs 4 through 15 of Appendix A. PLEASE BE SURE TO READ ALL OF APPENDIX A AND APPENDIX B, WHICH CONTAIN THE SPECIFIC TERMS AND CONDITIONS OF THIS AGREEMENT.

THIS AGREEMENT MUST BE ACCEPTABLE BY YOU BY THE ACCEPTANCE DEADLINE, OR THIS GRANT OF RESTRICTED STOCK UNITS WILL AUTOMATICALLY BE CANCELED.

TD AMERITRADE HOLDING CORPORATION

By:

Title: Karen Ganzlin, Chief Human Resources Officer

ACCEPTED BY THE GRANTEE

Print Name

Signature

Acceptance Date (must be within sixty (60) days of the Grant Date)

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APPENDIX A

TERMS AND CONDITIONS OF RESTRICTED STOCK UNITS

1. Grant. The Company hereby grants to the Grantee under the Plan at the per share price of $.01, equal to the par value of a Share, the number of Restricted Stock Units indicated in the Notice of Grant, subject to all of the terms and conditions in the Agreement, Appendix A and B and the Plan.

2. No Payment of Purchase Price Necessary. When the Restricted Stock Units are settled through the issuance of Shares to the Grantee, the par value of the underlying Company Stock will be deemed paid by the Grantee for each Restricted Stock Unit through the past services rendered by the Grantee, and such deemed payment will be subject to the appropriate tax withholdings.

3. Company’s Obligation to Pay. Each Restricted Stock Unit represents a right to receive, on the Vesting Date, one Share for each vested Restricted Stock Unit. Unless and until the Restricted Stock Units have vested in the manner set forth in this Agreement and Appendix A and B, the Grantee will have no right to receive settlement of Shares underlying such Restricted Stock Units. Prior to the settlement of any vested Restricted Stock Units, such Restricted Stock Units will represent an unsecured obligation. Payment of any vested Restricted Stock Units will be made in Shares.

4. Vesting Schedule. Except as otherwise provided in paragraph 5 of this Appendix A, the Restricted Stock Units awarded by this Agreement are scheduled to vest in accordance with the vesting schedule set forth in Appendix B. Restricted Stock Units scheduled to vest on any applicable date actually will vest only if the Grantee continues to be an Employee through such date.

5. Committee Discretion. The Committee, in its discretion, may accelerate the vesting of the balance, or some lesser portion of the balance, of the Restricted Stock Units at any time, subject to the terms of the Plan. If so accelerated, such Restricted Stock Units will be considered as having vested as of the date specified by the Committee.

6. Issuance of Shares after Vesting. Each Restricted Stock Unit that becomes vested under this Agreement will be settled by the Company through the issuance of Shares to the Grantee (or in the event of the Grantee’s death, to his or her estate) as soon as administratively practicable following the Vesting Date, subject to paragraph 15, and in no event later than the thirtieth (30 ^th ) day following the Vesting Date.

7. Forfeiture Upon Ceasing to be an Employee. Other than as provided in paragraphs 9 through 14, and notwithstanding any contrary provision of this Agreement, Appendix A and Appendix B, the balance of the Restricted Stock Units that have not vested pursuant to paragraphs 4 or 5 at the time the Grantee ceases to be an Employee will be forfeited and automatically transferred to and reacquired by the Company at no cost to the Company. The Grantee shall not be entitled to a refund of any price paid for the Restricted Stock Units forfeited to the Company pursuant to this paragraph 7.

8. Forfeiture or Repayment in Connection with Certain Events.

(a) Forfeiture or Repayment. Notwithstanding any contrary provision of this Agreement, Appendix A, Appendix B or the terms of any written agreement between the Company and the Grantee (including specifically any written employment, severance or change in control agreement) if the Committee determines (in its sole discretion, but acting in good faith) that a Clawback Event has occurred at any time while the Grantee is an Employee and such determination is made no later than three (3) years following the Grant Date, then: (i) the balance of the Restricted Stock Units that have not vested as of the date of such event may, in the sole discretion of the Committee, be forfeited and automatically transferred to and reacquired by the Company at no cost to the Company; (ii) any Shares previously issued under this Agreement to the Grantee for vested Restricted Stock Units that have not been sold, transferred or otherwise disposed of by the Grantee may, in the sole discretion of the Committee, be forfeited and automatically transferred to and reacquired by the Company at no cost to the Company; and (iii) if the Shares previously issued under this Agreement to the Grantee for vested Restricted Stock Units have been sold, transferred or otherwise disposed of by the Grantee, the Gain realized by the Grantee (or that would have been realized had the Grantee sold the Shares in an arms-length transaction) will be paid by the Grantee to the Company, if the Committee, in its sole discretion, requires such payment. If, with respect to subsections (ii) and/or (iii) in the preceding sentence, the Grantee refuses to transfer the Shares to the Company and/or make a payment to the Company equal to the Gain, the Company will, if directed by the Committee, in its sole discretion, and subject to applicable law (including any Code Section 409A considerations), recover the value of such Shares and/or Gain and, if applicable, the amount of its court costs, attorneys’ fees and other costs and expenses incurred in connection with enforcing this paragraph 8 by (w) reducing the amount that would otherwise be payable to the Grantee under any compensatory plan, program or arrangement maintained by the Company or any Subsidiary, (x) withholding payment of future increases in compensation (including the payment of any discretionary bonus amount) or grants of compensatory awards that would otherwise have been made in accordance with the Company’s (or a Subsidiary’s) otherwise applicable compensation practices, (y) reducing any severance benefits that would otherwise be payable or provided to the Grantee under any plan, program or arrangement maintained or entered into by the Company or any Subsidiary (including specifically under any employment or severance agreement) or (z) by any combination of the foregoing.

(b) Discretion to Reduce Amount Subject to Forfeiture or Repayment. In the event of a Clawback Event described in paragraph 8(c)(i)(A) below and the Restricted Stock Units were issued to the Grantee as payment (in whole or part) for an award earned under the Company’s Management Incentive Plan (or any other bonus plan of the Company), the Committee may, in its sole discretion, limit the amount to be forfeited by the Grantee and/or recovered from the Grantee to the amount by which the award earned under the applicable bonus plan exceeded the amount that would have been earned had the financial statements been initially filed as restated, as determined by the Committee in accordance with the terms and conditions of the applicable bonus plan. In the event the Committee exercises such discretion, if the award earned under the applicable bonus plan was paid in cash and the Restricted Stock Units, the Committee will have discretion to determine how the amount to be recovered will be allocated among the portion paid in cash and the portion paid in Restricted Stock Units. The amount of Restricted Stock Units, if any, subject to forfeiture or repayment will be covered in the following order: first, unvested Restricted Stock Units that remain

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outstanding; then, Shares previously issued under this Agreement to the Grantee for vested Restricted Stock Units that have not been sold, transferred or otherwise disposed of by the Grantee; and finally, Gain realized (or that would have been realized in an arms-length transaction) by the Grantee from the sale, transfer or disposition of Shares previously issued under this Agreement to the Grantee for vested Restricted Stock Units.

(i) For purposes of this Agreement, Appendix A and Appendix B, a “Clawback Event” shall mean one or more of the following: (A) any of the Company’s financial statements are required to be restated resulting from fraud or willful misconduct by the Grantee or any other person, provided that the Grantee knew or should have known of such fraud or willful misconduct; or (B) any act of fraud, negligence or breach of fiduciary duty by the Grantee or any other person, provided that the Grantee knew or should have known of such fraud, negligence or breach of fiduciary duty, resulting in material loss, damage or injury to the Company.

(ii) For purposes of this Agreement, Appendix A and Appendix B, “Gain” shall mean the Fair Market Value of a Share on the date of sale, transfer or other disposition, multiplied by the number of Shares sold, transferred or otherwise disposed of.

(d) Restrictions on Sale of Stock Pending Determination of Clawback Event. If the Company reasonably believes that a Clawback Event has occurred, the Grantee understands and agrees that the Company may, in its sole discretion, restrict the Grantee’s ability to directly or indirectly sell, offer, contract or grant any option to sell (including without limitation any short sale), pledge, swap, hedge, transfer, or otherwise dispose of any shares of Company common stock held by the Grantee in his or her Company brokerage account (whether issued in connection with this Agreement or otherwise) pending a final determination by the Committee that a Clawback Event has or has not occurred. Such determination shall be made as soon as administratively practicable but in no event will the Grantee be restricted in accordance with the preceding sentence for more than that period of time reasonably necessary for the Committee to determine the existence of a Clawback Event. The Grantee further understands and agrees that that the Company shall have no responsibility or liability for any fluctuations that occur in the price of the Company’s common stock or for any potential loss or gain the Grantee could have realized from the sale of his or her shares of Company common stock during the period of time in which the Grantee is restricted in accordance with this paragraph 8(d).

(e) Change of Control. Notwithstanding any contrary provision of this Agreement, Appendix A or Appendix B, this paragraph 8 will expire and have no further force or effect upon a Change of Control. Solely with respect to this paragraph 8, a “Change of Control” shall not be deemed to have occurred if the Company’s outstanding Shares or substantially all of the Company’s assets are purchased by TD Bank Financial Group.

(f) No Waiver. Any failure by the Company to assert the forfeiture and repayment rights under this paragraph with respect to specific claims against the Grantee shall not waive, or operate to waive, the Company’s right to later assert its rights hereunder with respect to other or subsequent claims against the Grantee.

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(g) No Limitation on Remedies. The Company’s forfeiture and repayment rights under this paragraph shall be in addition to, and not in lieu of, actions the Company may take to remedy or discipline any misconduct by the Grantee including, but not limited to, termination of employment or initiation of appropriate legal action.

(h) Grantee Acknowledgement and Agreement. Without limiting the generality of any other provision herein regarding the Grantee’s understanding of and agreement to the terms and conditions of this Agreement, Appendix A and Appendix B, by signing this Agreement, the Grantee specifically acknowledges that he or she has read and understands this paragraph 8 and agrees to the terms and conditions of this paragraph, including but not limited to the forfeiture and repayment provisions of paragraph 8(a).

9. Death of Grantee. In the event that the Grantee ceases to be an Employee due to his or her death prior to the Vesting Date, the Restricted Stock Units will vest and be settled by the Company through the issuance of Shares to the administrator or executor of the Grantee’s estate, on a date as soon as practicable after the date of the Grantee’s death. The Company may require any administrator or executor of the Grantee’s estate to furnish (a) written notice of his or her status as transferee, or (b) evidence satisfactory to the Company to establish the validity of the transfer and compliance with Applicable Laws pertaining to the transfer of the Shares underlying the Restricted Stock Units.

10. Disability of Grantee. In the event that the Grantee ceases to be an Employee due to his or her Disability prior to the Vesting Date, the Restricted Stock Units will vest and be settled by the Company through the issuance of Shares to the Grantee on a date as soon as practicable after the date of the Grantee’s Disability.

11. Retirement of Grantee. In the event that the Grantee ceases to be an Employee due to his or her Retirement (as defined below) prior to the Vesting Date, the Restricted Stock Units will vest and be settled by the Company through the issuance of Shares to the Grantee on a date as soon as practicable after the date of the Grantee’s Retirement. For the purposes of this Agreement, “Retirement” shall mean a termination of employment for any reason, other than “Cause” (as defined below in paragraph 12), after attaining age fifty-five (55) and after having at least ten (10) years of continuous service with the Company.

12. Termination of Employment without Cause. In the event that the Grantee’s employment is terminated by the Company without “Cause” (as defined below) prior to the Vesting Date, then the actual number of Shares to be issued upon settlement of the Restricted Stock Units, so long as permissible by the terms of the Plan, will be determined as follows: (A) the total number of Restricted Stock Units subject to this award shall be pro-rated based on the number of twelve (12) month periods which have elapsed since the Date of Grant and through the date of the Grantee’s termination of employment, then such pro-rated number of Restricted Stock Units shall (B) vest in accordance with, and pursuant to, paragraph 4. For the purposes of this Agreement, “Cause” shall mean the Grantee’s: (a) failure to substantially perform his or her duties as an Employee, other than due to illness, injury or Disability; (b) willful engaging in conduct which is materially injurious to the Company; (c) misconduct involving serious moral turpitude, or any conviction of, or plea of nolo contendre to, a criminal offense arising out of a breach of trust, embezzlement or fraud committed

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against the Company by the Grantee in the course of the Grantee’s employment with the Company; (d) any violation of paragraph 14 of this Appendix A; or (e) any other action which might be considered “gross misconduct” under the Company’s applicable associate handbook.

13. Termination of Employment following Change of Control. In the event that the Grantee’s employment is terminated by the Company for any reason, other than for Cause (as defined above) within twenty-four (24) months following a Change of Control and prior to the Vesting Date, the Restricted Stock Units will vest and be settled by the Company through the issuance of Shares to the Grantee on a date as soon as practicable after the date of the Grantee’s termination of employment.

14. Non-solicitation and Non-competition. The receipt of any Shares pursuant to this award will be subject to the Grantee, for the period of his or her employment with the Company and for a period the greater of either, twelve months or such period of time set forth in the Grantee’s associate agreement, after the termination of his or her employment with the Company, not: (i) directly or indirectly soliciting customers of the Company in an attempt to have such customers cease their relationship with the Company, (ii) soliciting any employee of the Company for employment with any employer other than the Company, or (iii) directly or indirectly engaging in, having any ownership interest in or participating in any entity that as of the date of termination, competes with the Company in any substantial business of the Company or any business reasonably expected to become a substantial business of the Company. To the extent the Grantee has violated any term and condition of this paragraph 14, the Restricted Stock Units prior to settlement shall be forfeited pursuant to paragraph 7 and if Shares of Company Stock have already been issued to the Grantee, then the Grantee shall be required to either return the Shares or forfeit any gain recognized by the Grantee from the sale of such Shares.

15. Withholding of Taxes. When the Shares are issued in settlement for vested Restricted Stock Units, the Grantee will recognize immediate U.S. taxable income if the Grantee is a U.S. taxpayer. If the Grantee is a non-U.S. taxpayer, the Grantee will be subject to applicable taxes in his or her jurisdiction. The Company (or the employing Related Entity) will withhold a portion of the Shares or cash otherwise issuable in settlement for vested Restricted Stock Units that have an aggregate market value sufficient to pay the minimum federal, state and local income, employment and any other applicable taxes required to be withheld by the Company (or the employing Related Entity) with respect to the Shares. Withholding will occur at the time that the Company (or the employing Related Entity) determines is necessary or appropriate to comply with applicable law, which may be before the Restricted Stock Units are due to be settled. No fractional Shares will be withheld or issued pursuant to the grant of Restricted Stock Units and the issuance of Shares thereunder. By accepting this Award, the Grantee expressly consents to the withholding of Shares as provided for in this paragraph 15. All income and other taxes and withholding related to the Restricted Stock Unit award and any Shares delivered in payment thereof are the sole responsibility of the Grantee.

16. Rights as Stockholder. Except as provided pursuant to the Dividend Equivalent Rights provided in paragraph 30, neither the Grantee nor any person claiming under or through the Grantee shall have any of the rights or privileges of a stockholder of the Company in respect of any Shares deliverable hereunder unless and until certificates representing such Shares (which may be in

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book entry form) shall have been issued, recorded on the records of the Company or its transfer agents or registrars, and delivered to the Grantee (including through electronic delivery to a brokerage account) after the Vesting Date. After such issuance, recordation and delivery, the Grantee will have all the rights of a stockholder of the Company with respect to voting such Shares and receipt of dividends and distributions on such Shares.

17. No Effect on Employment or Service. The Grantee acknowledges and agrees that this Agreement and Appendix A and B and the transactions contemplated hereunder do not constitute an express or implied promise of continued service or employment as an Employee for any period, or at all, and shall not interfere with the Grantee’s right or the Company’s (or employing Related Entity’s) right to terminate the Grantee’s relationship as an Employee at any time, with or without Cause.

18. Address for Notices. Any notice to be given to the Company under the terms of this Agreement shall be addressed to the Company, in care of its General Counsel, at 6940 Columbia Gateway Drive, Suite 200, Columbia, Maryland 21046, or at such other address as the Company may hereafter designate in writing.

19. Grant is Not Transferable. Except to the limited extent provided in paragraph 9 above, this grant and the rights and privileges conferred hereby shall not be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to sale under execution, attachment or similar process. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of this grant, or of any right or privilege conferred hereby, or upon any attempted sale under any execution, attachment or similar process, this grant and the rights and privileges conferred hereby immediately shall become null and void.

20. Restrictions on Sale of Stock. The Shares issued as settlement for the payment for any vested Restricted Stock Units awarded under this Agreement will be registered under the federal securities laws and will be freely tradable upon receipt. However, the Grantee’s subsequent sale of the Shares will be subject to paragraph 8(d) above, any market blackout-period that may be imposed by the Company and must comply with the Company’s insider trading policies, and any other applicable securities laws. In addition, the Shares issued as settlement for the payment of any vested Restricted Stock Units awarded under this Agreement will also be subject to any applicable ownership guidelines and Share ownership holding periods which may be currently in effect under the Company’s trading policy.

21. Binding Agreement. Subject to the limitation on the transferability of this grant contained herein, this Agreement shall be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

22. Conditions for Issuance of Certificates for Stock. The Shares deliverable to the Grantee may be either previously authorized but unissued Shares or issued Shares which have been reacquired by the Company. The Company shall not be required to issue any certificate or certificates for Shares hereunder prior to fulfillment of all the following conditions: (a) the admission of such Shares to listing on all stock exchanges on which such class of stock is then listed; and (b) the completion of any registration or other qualification of such Shares under any state or federal law or under the rulings or regulations of the Securities and Exchange Commission or any

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other governmental regulatory body, which the Committee shall, in its absolute discretion, deem necessary or advisable; and (c) the obtaining of any approval or other clearance from any state or federal governmental agency, which the Committee shall, in its absolute discretion, determine to be necessary or advisable; provided that issuance of certificates for Shares hereunder is to be made in no event later than the thirtieth (30 ^th ) day following the Vesting Date.

23. Plan Governs. This Agreement and Appendix A and B is subject to all terms and provisions of the Plan. In the event of a conflict between one or more provisions of this Agreement and Appendix A and B and one or more provisions of the Plan, the provisions of the Plan shall govern. Capitalized terms used and not defined in this Agreement and Appendix A and B shall have the meaning set forth in the Plan.

24. Committee Authority. The Committee shall have the power to interpret the Plan and this Agreement and Appendix A and B and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules (including, but not limited to, the determination of whether or not any Restricted Stock Units have vested). All actions taken and all interpretations and determinations made by the Committee shall be final and binding upon the Grantee, the Company and all other persons. The Committee shall not be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or this Agreement and Appendix A and B.

25. Captions. Captions provided herein are for convenience only and are not to serve as a basis for interpretation or construction of this Agreement and Appendix A and B.

26. Agreement Severable. In the event that any provision in this Agreement and Appendix A and B shall be held invalid or unenforceable, such provision shall be severable from, and such invalidity or unenforceability shall not be construed to have any effect on, the remaining provisions of this Agreement and Appendix A and B.

27. Entire Agreement. Other than to the extent any written employment agreement between the Grantee and the Company provides for (a) treatment different or (b) the definition of terms different, than that which is provided by this Agreement and Appendix A and B, this Agreement and Appendix A and B constitutes the entire understanding of the parties on the subjects covered. The Grantee expressly warrants that he or she is not executing this Agreement and Appendix A and B in reliance on any promises, representations, or inducements other than those contained herein.

28. Modifications to the Agreement. The Grantee expressly warrants that he or she is not accepting this Agreement in reliance on any promises, representations, or inducements other than those contained herein. Modifications to this Agreement or the Plan can be made only in an express written contract executed by a duly authorized officer of the Company.

29. Amendment, Suspension or Termination of the Plan. By accepting this award, the Grantee expressly warrants that he or she has a right to receive Shares under, and subject to the terms and conditions of, the Plan and this Agreement and Appendix A and B, and has received, read and understood the Plan and this Agreement and Appendix A and B. The Grantee understands that the Plan is discretionary in nature and may be modified, suspended or terminated by the Company at any time.

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30. Dividend Equivalent Rights. Subject to the provisions of this paragraph 30, the number of Restricted Stock Units subject to this Agreement shall be increased by such additional Restricted Stock Units in an amount determined by the following formula: X = (A x B) / C; where:

•

“X” is the number of whole Restricted Stock Units to be credited (which shall be rounded down to the next whole Share as no fractional Shares shall be credited pursuant to this Dividend Equivalent Right);

•

“A” is the amount of cash dividends paid by the Company to stockholders with respect to one Share;

•

“B” is the number of whole Restricted Stock Units remaining subject to this Agreement as of the cash dividend record date but immediately prior to the application of this paragraph 30; and

•

“C” is the Fair Market Value of a Share on the cash dividend payment date.

The Grantee will be entitled to additional Restricted Stock Units in accordance with this paragraph 30 only if the Grantee remains an Employee Continuously through the applicable Record Date. If a Settlement Date occurs before the cash dividend payment date, and the Grantee (if eligible in accordance with the preceding sentence) did not otherwise receive any additional Restricted Stock Units with respect to such Shares issued on the applicable Settlement Date, the Grantee shall nevertheless be entitled to receive either additional Shares or cash in lieu of such Restricted Stock Units, as determined by the Committee, in an amount determined pursuant to this paragraph 30, which shall be immediately settled through the issuance of Shares or cash, as applicable, on the cash dividend payment date (or as soon as reasonably practicable thereafter but not later than thirty (30) days after the dividend payment date) by deposit to the Grantee’s Company brokerage account. Such additional Restricted Stock Units shall be subject to the same terms and conditions and shall be settled in the same manner and at the same time as to which applied to each underlying Share pursuant to which the Dividend Equivalent Rights were paid.

31. Code Section 409A. Notwithstanding anything to the contrary in the Agreement, Appendix A and B and/or the Plan, if the Company reasonably determines that Section 409A of the Code will result in the imposition of additional tax with respect to the settlement of the Shares underlying the Restricted Stock Units on account of the Grantee’s separation from service (as defined in Section 409A of the Code), the Shares (and/or at the election of the Grantee the cash received from the sale of the Shares underlying the vested Restricted Stock Units) will not be paid to the Grantee until the date six (6) months and one (1) day following the date of the Grantee’s separation from service.

32. Notice of Governing Law. This grant of Restricted Stock Units shall be governed by, and construed in accordance with, the laws of the State of Nebraska without regard to principles of conflict of laws.

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APPENDIX B

VESTING SCHEDULE

OF RESTRICTED STOCK UNITS

The vesting of the Restricted Stock Units subject to this award shall be determined based on the following schedule (except as otherwise provided in Appendix A):

The Vesting Date shall be the third (3 ^rd ) anniversary of the Date of Grant. One hundred percent (100%) of the Restricted Stock Units shall become vested on such Vesting Date.

The Settlement Date, when the vested Restricted Stock Units, if any, will be settled by issuing Shares to the Grantee shall be the date, as soon as reasonable practicable following the date the applicable Restricted Stock Units have vested in accordance with the terms of the Plan, the Agreement and this Appendix B, but in no event later than the thirtieth (30 ^th ) day following such date.

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EXHIBIT 15.1

Awareness Letter of Independent Registered Public Accounting Firm

The Board of Directors

TD Ameritrade Holding Corporation

We are aware of the incorporation by reference in the following Registration Statements of TD Ameritrade Holding Corporation:

(1)	Registration Statement (Form S-8 No. 333-132016)

(2)	Registration Statement (Form S-8 No. 333-105336)

(3)	Registration Statement (Form S-8 No. 333-99353)

(4)	Registration Statement (Form S-8 No. 333-86164)

(5)	Registration Statement (Form S-8 No. 333-77573) pertaining to the Associates’ 401(k) Profit Sharing Plan and Trust

(6)	Registration Statement (Form S-8 No. 333-160073)

(7)	Registration Statement (Form S-3 No. 333-185286)

of our report dated February 6, 2013 relating to the unaudited condensed consolidated interim financial statements of TD Ameritrade Holding Corporation that are included in its Form 10-Q for the quarter ended December 31, 2012.

/s/ ERNST & YOUNG LLP

Chicago, Illinois

February 6, 2013

EXHIBIT 31.1

CERTIFICATION

I, Fredric J. Tomczyk, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of TD Ameritrade Holding Corporation;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 6, 2013

/s/ FREDRIC J. TOMCZYK

Fredric J. Tomczyk

President and Chief Executive Officer

EXHIBIT 31.2

CERTIFICATION

I, William J. Gerber, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of TD Ameritrade Holding Corporation;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 6, 2013

/s/ WILLIAM J. GERBER

William J. Gerber

Executive Vice President, Chief Financial Officer

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned hereby certify that the Quarterly Report on Form 10-Q for the quarter ended December 31, 2012 filed by TD Ameritrade Holding Corporation with the Securities and Exchange Commission fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in the report fairly presents, in all material respects, the financial condition and results of operations of TD Ameritrade Holding Corporation.


Dated: February 6, 2013		/s/ FREDRIC J. TOMCZYK
		Fredric J. Tomczyk
		President, Chief Executive Officer

Dated: February 6, 2013		/s/ WILLIAM J. GERBER
		William J. Gerber
		Executive Vice President,
		Chief Financial Officer