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FIS Brokerage & Securities Services LLC
FIS Brokerage & Securities Services LLC is committed to protecting the privacy and security of all personal information in order to provide services to our clients.
Collection and Use of Information: FBSS will only collect your personal information (such as your name, address, or telephone number) if you provide it voluntarily. If you do not want this information to be collected by us, please do not submit it. FBSS will not retain your personal information longer than is necessary for the purpose for which it is collected. FBSS does not sell, trade or rent your personal information to others.
Notice to Customers Regarding Information Collected for Customer Identification Purposes
To help the US government fight the funding of terrorism and money laundering activities, FIS Brokerage & Securities Services LLC (“FBSS” or the “Firm”) is required by the USA PATRIOT Act and FINRA Rule 3310 to obtain, verify, and record information that identifies each entity that obtains products or services from FBSS. As such, FBSS has established a Client Identification Program (“CIP”) and will collect certain information such as entity name, physical address, tax identification number as well as any other information that will allow FBSS to identify that entity. FBSS may also request to obtain identifying documents, such as formation documents, business licenses or similar records. If all required documentation or information is not provided, FBSS may be unable to open an account or establish a relationship with you.
FBSS understands that respecting and protecting client privacy are vital to its business. FBSS is committed to keeping client information private and secure and it complies with SEC Regulation S-P.
FBSS, as an introducing firm, has entered into a Fully Disclosed Clearing Agreement with Goldman, Sachs & Co., Member NYSE, FINRA, SIPC, Industrial and Commercial Bank of China Financial Services LLC, Member NYSE, FINRA, SIPC and BofA Securities, Inc., Member NYSE, FINRA, SIPC.
FBSS is a member of the Securities Investor Protection Corporation (“SIPC”). SIPC protects the clients of its member firms against the loss of their securities and cash in the event of the member’s insolvency or liquidation. Each client is insured up to a maximum of $500,000 (including $250,000 for claims for cash). For more information on SIPC coverage, please see the explanatory brochure at www.sipc.org or contact SIPC at +1 202.371.8300. SIPC does not insure the quality of investments or protect against losses from fluctuating market value.
Investor Education and Protection- FINRA BrokerCheck
Public Disclosure: You may reach FINRA by calling the FINRA BrokerCheck Hotline at +1 800.289.9999 or by viewing FINRA BrokerCheck online at http://brokercheck.finra.org. A brochure describing the FINRA BrokerCheck Program is also available from FINRA online or upon request.
Statement of Financial Condition
Customers may obtain the Firm’s annual audited financial statement and semi-annual un-audited financial statement through our Firm’s website here.
Questions and Complaints
You may direct any complaints you may have concerning your relationship with FBSS to: FIS Brokerage & Securities Services LLC, 2100 Enterprise Avenue, Geneva, Illinois 60134, Attn: Compliance Department or you can contact the Compliance Department at +1 630.482.7100.
Business Continuity Plan Summary
Disclosure Statement: FBSS has developed a Business Continuity Plan (the “BCP”) to ensure a timely and coordinated response to events that may significantly disrupt its business. As the timing, severity, and impact of disasters and disruptions are unpredictable by nature, the BCP must be flexible in responding to actual events as they occur.
Overview of Business Continuity Plan: The Firm’s goal in responding to a Significant Business Disruption (“SBD”) is to safeguard the Firm’s employees and property, safeguard customer assets, make a financial and operational assessment of the situation, protect the Firm’s books and records, and allow the Firm’s customers to transact business. The BCP is designed to allow the Firm to resume operations as quickly as possible, given the scope and severity of the SBD.
The BCP addresses the following areas: (i) data backup and recovery; (ii) mission critical systems; (iii) financial and operational assessments; (iv) alternative communications with customers, employees, and regulators; (v) alternate physical location of employees; (vi) critical supplier, contractor, bank and counter-party impact; (vii) regulatory reporting; and (viii) providing the Firm’s customers prompt access to their funds and securities if the Firm is unable to continue its business.
Varying Disruptions: SBDs can vary in their scope and magnitude. They may affect only the Firm, a single building housing the Firm, the business district where the Firm is located, the city where the Firm is located, or the whole region. Within each of these areas, the severity of the disruption can also vary from minimal to severe. For example, if there is a local power outage, the Firm may continue operations utilizing on-site backup power systems. If the building housing the Firm is deemed inoperable, the Firm may transfer operations to an alternative local site if necessary. In a disruption affecting the Firm’s business district, city, or region, the Firm may transfer operations to a site outside of the affected area. In any situation, the Firm plans to attempt to continue business and notify customers through the Firm web site or any other means that remain available. If the SBD is so severe that it prevents the Firm from remaining in business, the Firm will work to assure customers prompt access to their funds and securities.
Contacting Us: If you are unable to contact your FBSS representative after a SBD, you should call our alternative number at + 630.482.7100 and/or visit our website at https://securities.fisglobal.com or https://stcm.fisglobal.com for information and instructions.
If you are unable to access one of our websites or reach a representative via the alternative methods provided hereto, you should contact your Clearing Firm for information on how to gain access to your information and services. Provided below is the contact information for the firm’s which we currently maintain a clearing relationship:
For more information: This overview is designed to satisfy the disclosure requirements under FINRA Rule 4370 requiring the establishment and maintenance of a BCP. If you have questions about the Firm’s business continuity planning, you can contact us at +1 630.482.7100.
Best Execution (Reg NMS Rule 605)
The Best Execution Policy sets forth the policy and methods used by FBSS when handling orders for clients.
When the Firm receives an agency order from a client (“Agency Order”), the Firm will promptly handle such order via our trading participant and in accordance with the instructions indicated on the underlying order. In general, the following policies apply to the Firm in this regard: When handling client orders, as agent, the Firm must consider whether sending the order to another market, market maker or potentially crossing the order would result in a superior execution.
Metrics used when measuring execution quality may include, but shall not be limited to various or combinations of execution measurements as listed below:
- Client needs and expectations;
- The terms and conditions of the order;
- Price improvement opportunities;
- The likelihood of execution;
- The speed of execution;
- The size of the order
- The size of execution;
- Effective spread;
- Order type;
- The trading characteristics of the security involved;
- Accessibility to the quotation of the security involved;
- The availability of accurate information affecting choices as to the most favorable market center for execution and the availability of technological aids to process such information;
- Transaction costs;
- Volume; and
- The listing of the underlying issue
Please note the above metrics used to measure execution quality may change from time to time.
Best execution obligations cannot be satisfied simply by routing to the primary market of the underlying stock and trading at the inside price in that market. In determining where to route an order, the Firm must carefully evaluate the extent to which a different routing destination may offer opportunities for an improved execution.
Please note: There may be instances where, due to system failure or other reasons, where FBSS has no alternative but to handle an order using a method other than the method selected pursuant to the Best Execution Policy.
Even if a trade appears not to have been executed at the best possible price in hindsight, it does not necessarily constitute a violation of the duty of best execution.
Please note the following:
- Orders accepted and processed by FIS Execution Services are generally handled on a Not Held basis.
- In compliance with its best execution obligations, and as a way to provide our clients best execution at the lowest cost, the Firm may route orders via Morgan Stanley & Co. LLC or BofA Securities, Inc. to take advantage of volume-related tier breaks.
- Market orders routed to FBSS may be converted to marketable limit day orders with a display quantity of 100 shares.
If you are a customer of FBSS and would like additional information on our order handling practices, please call +1 630.482.7100.
Order Routing (Reg NMS Rule 606)
Pursuant to the U.S. Securities and Exchange Commission (“SEC”) Rule 606, certain "broker-dealers", including FBSS, are required to publicly disclose, on a quarterly basis, certain statistical information relating to their most significant execution venues for certain types of customer orders. As a result, a broker-dealer shall make publicly available for each calendar quarter a report on its routing of non-directed orders in NMS stocks that are submitted on a held basis and of non-directed orders that are customer orders in NMS securities that are option contracts during that quarter broken down by calendar month and keep such report posted on an internet website that is free and readily accessible to the public for a period of three (3) years from the initial date of posting on the internet website. Such report shall include a section for NMS stocks - separated by securities that are included in the S&P 500 Index as of the first day of that quarter and other NMS stocks - and a separate section for NMS securities that are option contracts. For each section, this report identifies the venues most often selected by FBSS, sets forth the percentage of various types of orders routed to the venues, and discusses the material aspects of FBSS’ relationship with the venues if applicable.
Additionally, every broker-dealer shall, on request of a customer, disclose to its customer orders in NMS stocks submitted on a held basis, orders in NMS stocks submitted on a not held basis, and orders in NMS securities that are options contracts, the identity of the venue to which the customer's orders were routed for execution in the six (6) months prior to the request, whether the orders were directed orders or non-directed orders, and the time of the transactions, if any, that resulted from such orders.
Furthermore, on request of a customer that places, directly or indirectly with the Firm, one (1) or more orders in NMS stocks that are submitted on a not held basis with the Firm, disclose to such customer within seven (7) business days of receiving the request, a report on its handling of such orders for that customer for the prior six (6) months by calendar month.
If you are a customer of FBSS and would like additional information on our order routing policies and procedures and how they pertain to your account, please call +1 630.482.7100. FBSS shall, upon customer request, disclose the identity of the venue to which the customer's orders were routed for execution within the six (6) months prior to the request, including whether the orders were directed orders or non-directed orders, time of the transactions, and other salient information.
Note: The Firm has made every attempt to prepare these statistics in compliance with SEC rules. However, these statistics have not been audited and may contain errors. Accordingly, any decision about whether to establish a relationship with FBSS should not be based solely on these statistics, but on an evaluation of FBSS’ full range of provided services.
This information is presented in accordance with uniform standards that are based on broad assumptions about order execution and routing practices.
Rule 606 statistics for FBSS are available for public review by visiting https://www.fisglobal.com/ptc.
Additionally, FBSS shall furnish a written copy to customers upon request without charge.
Payment for Order Flow Disclosure
Pursuant to the U.S. Securities and Exchange Commission (“SEC”) Rules 606 and 607, FBSS is required to disclose its payment for order flow practices. FBSS routes its customers’ equity orders to broker-dealers, national securities exchanges, alternative trading systems (“ATSs”), electronic communications networks (“ECNs”) and other markets for execution. In exchange for routing equity orders to those destinations, FBSS may receive monetary compensation in the form of a rebate for equity orders which is considered payment for order flow.
To mitigate payment for order flow conflicts, FBSS reviews the execution quality of its routing venues and potential alternate routing venues to ensure FBSS adheres to its Best Execution Policy as means of providing its clients Best Execution.
If you are a customer of FBSS and would like additional information on our payment for order flow practices or the routing of ordering submitted to the Firm for execution, please call +1 630.482.7100.
Electronic Trading Disclosure
The risk of loss in electronic trading can be substantial. Therefore, you should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. System access and trade executions may be delayed or fail due to market volatility, system failure, high volume or other factors.
Proprietary Transaction Order Handling Disclosure (No-Knowledge Exception)
FBSS operates in accordance with FINRA Rule 5320, Cboe BZX, Cboe BYX, Cboe EDGA and Cboe EDGX Rule 12.6, Investors Exchange LLC Rule 10.160, NYSE Chicago, Inc Rule 17, NASDAQ Rule 5320, NASDAQ PHLX Rule 765, NASDAQ BX Rule 2111 and IM-2110-2, NYSE and NYSE American Rule 5320, NYSE ARCA Rule 9.5320 and NYSE National Rule 11.5320, collectively (the “Rules”) as it relates to proprietary transactions that would otherwise satisfy a customer order. In an effort to avoid conflicts with customer orders, FBSS handles customer orders independent of transactions executed proprietarily.
In accordance with the Rules noted above, FBSS has implemented the following procedures:
- FBSS’ principal trading system has no knowledge, or access to knowledge, of any customer orders that FBSS has received or is handling. As such, there is no leakage of customer order information that could lead to the misuse of information regarding customer orders;
- The systems pertaining to the receipt of agency customer orders will be maintained in separate technologically controlled environments and servers apart from the systems pertaining to the proprietary trading activity of the Firm;
- Associated Persons that handle proprietary transactions versus those that handle customer orders are limited to monitoring only as the trading decisions are made exclusively by the proprietary execution engines which have no knowledge of the agency order flow; and
- The Firm will maintain unique order identifiers for all agency and proprietary orders to ensure separate and distinct activity. The unique order identifiers will be present in applicable CAT records as required under FINRA Rule 6830(a).
Clearly Erroneous Executions
An execution may be considered “clearly erroneous” when there is an obvious error in any term, such as price, number of shares or other unit of trading, or the identification of the underlying security. Occasionally, securities transactions may occur that are unintended and are clearly erroneous.
Generally, to break executions, including client executions purported to be clearly erroneous, FBSS must submit a petition to the market center on which the order was executed. Market centers expect petitions to be made promptly and to have sufficient information to identify the erroneous executions and to support the basis for the petition.
FBSS informs its clients to which it provides market access of the following:
- Petitions arising from orders routed or executed involving an FBSS MPID shall be made or asserted only by FBSS, and
- FBSS shall make only those petitions it reasonably believes are meritorious under the standards in effect at the adjudicating market center.
Petitioning for a Clearly Erroneous Execution
To file a clearly erroneous transaction petition request, please complete and submit the Firm’s Clearly Erroneous Filing Request Form which can be found here. Once the Clearly Erroneous Filing Request Form has been completed and submitted, an immediate phone call is required to +1 630.482.5105.
Stop Order Activation
FINRA Rule 5350 provides that a firm may, but is not obligated to, accept a stop order or stop limit order. The Rule further provides that a firm may accept stop orders and stop limit orders that activate as a market or limit order using an event other than a transaction at the stop price as the trigger.
FBSS informs its clients of the following:
- Stop orders and stop limit orders accepted by FBSS will activate upon the transaction of a round lot in the underlying security at the stop price.
- In instances where a broker-dealer routes an order to FBSS after using an alternative trigger in accordance with FINRA Rule 5350, it is the broker-dealer’s responsibility that relied on the alternative trigger to undertake reasonable steps to ensure that their client’s order is handled or executed in accordance with the terms of the order as communicated to the client when placing the order with the broker-dealer.
Low Priced Securities Disclosure
Investing in low-priced securities is speculative and may involve considerable risk. Low-priced securities often exhibit high price volatility and erratic market movements. Trading low-priced securities may be subject to significant risks, increased regulatory requirements and oversight, and additional fees.
FBSS reserves the right to reject orders in low priced securities.
Market Order to Limit Order Conversion Disclosure
Market orders in thinly traded securities may cause a price impact. As a result, FBSS reserves the right to convert its client market orders to limit orders.
Note: Converted market orders will be changed to marketable limit day orders with a display quantity of 100 shares.
Market Access Controls
Consistent with the Firm’s obligation to maintain a fair and orderly market, FBSS reserves the right to reject an order based on its systemic controls as required under SEC Rule 15c3-5 (the “Market Access Rule”).
Margin Disclosure Statement
FBSS is furnishing this disclosure to you to provide some basic facts about purchasing securities on margin, and to alert you to the risks involved with trading securities in a margin account. Before trading stocks in a margin account, you should carefully review your margin agreement.
When you purchase securities, you may pay for the securities in full or you may borrow part of the purchase price. If you choose to borrow funds, you will open a margin account. The securities purchased are the clearing firms’ collateral for the granted loan. If the securities in your account decline in value, so does the value of the collateral supporting your loan, and, as a result, the clearing firm can take action, such as issue a margin call and/or sell securities or other assets in any of your accounts held with the clearing firm, in order to maintain the required equity in the account.
It is important that you fully understand the risks involved in trading securities on margin. These risks include the following:
- You can lose more funds than you deposit in the margin account.
- A decline in the value of securities that are purchased on margin may require you to provide additional funds to the clearing firm to avoid the forced sale of those securities or other securities or assets in your account(s). The clearing firm can force the sale of securities or other assets in your account(s).
- If the equity in your account falls below the maintenance margin requirements or the clearing firms’ higher “house” requirements, the clearing firm can sell the securities or other assets in any of your accounts held by the clearing firm to cover the margin deficiency. You also will be responsible for any short fall in the account after such a sale.
- The clearing firm can sell your securities or other assets without contacting you.
- Some investors mistakenly believe that they must be contacted for a margin call to be valid, and that the clearing firm cannot liquidate securities or other assets in their accounts to meet the call unless they are contacted first. This is not the case. The clearing firm will attempt to notify customers of margin calls, but is not required to do so. However, even if the clearing firm has contacted a customer and provided a specific date by which the customer can meet a margin call, the clearing firm can still take necessary steps to protect its financial interests, including immediately selling the securities without notice to the customer.
- You are not entitled to choose which securities or other assets in your account(s) are liquidated or sold to meet a margin call.
- Because the securities are collateral for the margin loan, the clearing firm has the right to decide which security to sell in order to protect its interests.
- The clearing firm can increase its “house” maintenance margin requirements at any time and is not required to provide you advance written notice.
- These changes in firm policy often take effect immediately and may result in the issuance of a maintenance margin call. Your failure to satisfy the call may cause the clearing firm to liquidate or sell securities in your account(s).
- You are not entitled to an extension of time on a margin call.
- While an extension of time to meet margin requirements may be available to customers under certain conditions, a customer does not have a right to the extension.
Day Trading Margin Requirements: FINRA rules define a “pattern day trader” as any customer who executes four (4) or more “day trades” within five (5) business days, provided that the number of day trades represents more than six percent of the customer’s total trades in the margin account for that same five business day period. Under FINRA rules, customers that are deemed “pattern day traders" are subject to the following:
Minimum Equity Requirement: The minimum equity requirement for a customer who is designated as a pattern day trader is $25,000. This $25,000 requirement must be deposited into the customer’s account prior to any day trading activities and must be maintained at all times. A customer cannot fulfill this $25,000 requirement by cross-guaranteeing separate accounts. Each day trading account is required to meet the $25,000 requirement independently, using only the financial resources available in that account. If a customer’s account falls below the $25,000 requirement, the customer will not be permitted to day trade until the customer deposits cash or securities into the account to restore the account to the $25,000 minimum equity level.
Day Trading Buying Power: Day trading buying power is equal to the equity in the account at the close of business the previous day, less self-regulatory organization (“SRO”) requirements, multiplied by up to four.
Day Trading Minimum Equity Call: If the underlying account has less than $25,000 equity and such account is identified as a pattern day trading account, a day trading minimum equity call will be issued. If a day trade is executed when the equity is below $25,000, the account will be restricted to closing/liquidating transactions for a period of ninety (90) days, or until the equity is brought up to $25,000.
Day Trading Buying Power Call: If an account satisfies minimum equity requirements for day trading and exceeds the day trading buying power at any point throughout the trading day, a day trading buying power call will be issued. Once a day trading buying power call is issued, the day trading buying power will be restricted to two (2) times SRO excess for five (5) business days unless the call is prior to five (5) business days. If the day-trading buying power call is not met within five (5) business days, the account will be permitted to execute cash transactions only for ninety (90) days, or until the call is satisfied. It is possible to sustain multiple day-trading buying power violations which may result in a restriction to cash transactions only. Day trading calls can only be met by depositing cash, fully paid securities, selling non-marginable securities, or by selling long options held in the pattern day trading account.
Regulation T Restricted Day Trading Accounts: Pattern day trader accounts under a Regulation T restriction will have their buying power limited as follows:
- If the account satisfies the $25,000 minimum equity requirement, the account will receive the lesser of SMA times two or SRO excess times four.
- A pattern day trader accounts that fall below the $25,000 minimum equity requirement will not be allowed to day trade. If a day trade is executed when the equity is below $25,000, the account will be restricted to closing/liquidating transactions for a period of ninety (90) days, or until the equity is brought up to $25,000.
Day Trading Risk Disclosure
You should consider the following points before engaging in a day trading strategy. For purposes of this notice, a "day trading strategy" means an overall trading strategy characterized by the regular transmission by a customer of intraday orders to affect both purchase and sale transactions in the same security or securities.
You Can Lose More Funds Than You Deposit In The Margin Account: A decline in the value of securities that are purchased on margin may require you to provide additional funds to the clearing firm to avoid the forced sale of those securities or other securities or assets in your account(s).
Day Trading Can Be Extremely Risky: Day trading generally is not appropriate for someone of limited resources and limited investment or trading experience and low risk tolerance. You should be prepared to lose all of the funds that you use for day trading. In particular, you should not fund day trading activities with retirement savings, student loans, second mortgages, emergency funds, funds set aside for purposes such as education or home ownership, or funds required to meet your living expenses.
Be Cautious of Claims of Large Profits From Day Trading: You should be wary of advertisements or other statements that emphasize the potential for large profits in day trading. Day trading can also lead to large and immediate financial losses.
Day Trading Requires Knowledge of Securities Markets: Day trading requires in-depth knowledge of the securities markets and trading techniques and strategies. In attempting to profit through day trading, you must compete with professional, licensed traders employed by securities firms. You should have appropriate experience before engaging in day trading.
Day Trading Requires Knowledge of a Firm's Operations: You should be familiar with a securities firm's business practices, including the operation of the firm's systems and procedures. Under certain market conditions, you may find it difficult or impossible to liquidate a position quickly at a reasonable price. This can occur, for example, when the market for a stock suddenly drops, or if trading is halted due to recent news events or unusual trading activity. The more volatile a stock is, the greater the likelihood that problems may be encountered in executing a transaction. In addition to normal market risks, you may experience losses due to system failures.
Day Trading May Generate Substantial Commissions, Even if the Per Trade Cost is Low: Day trading involves aggressive trading, and generally you will pay commissions on each trade. The total daily commissions that you pay on your trades will add to your losses or significantly reduce your earnings.
Day Trading on Margin or Short Selling May Result in Losses Beyond Your Initial Investment: When you day trade with funds borrowed from a firm or someone else, you can lose more than the funds you originally placed at risk. A decline in the value of the securities that are purchased may require you to provide additional funds to the firm to avoid the forced sale of those securities or other securities in your account. Short selling as part of your day-trading strategy also may lead to extraordinary losses, because you may have to purchase a stock at a very high price in order to cover a short position.
Potential Registration Requirements: Persons providing investment advice for others or managing securities accounts for others may need to register as either an "Investment Advisor" under the Investment Advisors Act of 1940 or as a "Broker" or "Dealer" under the Securities Exchange Act of 1934. Such activities may also trigger state registration requirements.
Extended Hours Trading Risk Disclosure
Overnight Positions Risk: Positions held into the close or entered into during the extended trading hours may not be available for possible liquidation, thus causing the trader to carry the position over night. This can expose the trader to additional market risk as well as changes in margin to their account.
Risk of Lower Liquidity: Liquidity generally refers to the ability of market participants to buy and sell securities. Basically, the more orders that are available in a market, the greater the liquidity. Liquidity is important because with greater liquidity it is easier for investors to buy or sell securities, and as a result, investors are more likely to pay or receive a competitive price for securities purchased or sold. There may be lower liquidity in extended hours trading as compared to regular market hours. As a result, your order may only be partially executed, or not at all.
Risk of Higher Volatility: Volatility refers to the changes in price that securities undergo when trading. Generally, the higher the volatility of a security, the greater its price swings. There may be greater volatility in extended hours trading than in regular market hours. As a result, your order may only be partially executed, or not at all, or you may receive an inferior price in extended hours trading than you would during regular market hours.
Risk of Changing Prices: The prices of securities traded in extended hours trading may not reflect the prices either at the end of regular market hours, or upon the opening the next morning. As a result, you may receive an inferior price in extended hours trading than you would during regular market hours.
Risk of Unlinked Markets: Depending on the extended hours trading system or the time of day, the prices displayed on a particular extended hours trading system may not reflect the prices in other concurrently operating extended hours trading systems dealing in the same securities. Accordingly, you may receive an inferior price in one extended hours trading system than you would in another extended hours trading system.
Risk of News Announcements: Normally, issuers make news announcements that may affect the price of their securities after regular market hours. Similarly, important financial information is frequently announced outside of regular market hours. In extended hours trading, these announcements may occur during trading, and if combined with lower liquidity and higher volatility, may cause an exaggerated and unsustainable effect on the price of a security.
Risk of Wider Spreads: Generally, the spread refers to the difference between the price available for an immediate sale (bid) and immediate purchase (ask) for a stock. Lower liquidity and higher volatility in extended hours trading may result in abnormal or unusually wide spreads for a particular security.
Statements of Financial Condition
- Download the Statement of Financial Condition (unaudited) June 2021
- Download the Statement of Financial Condition (audited) December 2020