Regulatory Disclosures

Privacy Notice

Policy Notice

Extended Hours Trading Risk Disclosure

 


Privacy Notice

Craig-Hallum Capital Group LLC (“CHCG”) is providing you this notice in accordance with the federal financial privacy Law.

PROTECTING INFORMATION ABOUT YOU FROM MARKETERS

CHCG does not sell or otherwise share any personally identifiable information about the customers, including former customers, (“Customer Information”) with marketers.

MAKING THE SECURITY OF INFORMATION A PRIORITY

Keeping financial information secure is one of our most important responsibilities. We maintain physical, electronic and procedural safeguards to protect Customer Information. Employees are authorized to access Customer Information only when they need it to provide you products and services or to maintain your accounts. Our employees are bound by a code of ethics that requires confidential treatment of Customer Information and are subject to disciplinary action if they fail to follow this code.

COLLECTING INFORMATION

We collect and use various types of information to service your accounts, save you time and money and better understand your needs.

Customer Information we collect is defined as the following five types:

  1. Application Information – Information, such as your assets, income, and debts which you provide to us on applications and through other means.
  2. Transaction and Experience Information – Information about your transactions and account experience, such as your account balances or transaction history; or information about any communication between us.
  3. Consumer Report Information – Information from a consumer report, such as your credit-worthiness or credit history.
  4. Information from Outside Sources – Information from other outside sources regarding their employment, credit and other relationship with you or verifying representations made by you, such as your employment history or loan and credit card balances.
  5. Other General Information – Information, such as demographics not assembled or used for the purpose pf determining your eligibility for any product or service.

MANAGING INFORMATION WITH COMPANIES THAT WORK FOR US

We may share any of the five types of Customer Information outlined above with companies that work for us. All companies that act on our behalf are contractually obligated to keep the information we provide to them confidential, and use the Customer Information we share only to provide the services we ask them to perform for you and us. These companies may include our clearing firm, financial service providers such as payment processing companies, and non-financial companies such as check printing and data processing companies. These companies might assist us, for example, in fulfilling your service requests, processing your transactions and mailing account statements.  For purposes of Subsection 314(b) of the USAPATRIOT Act, we have notified the Department of the Treasury, Financial Crimes Enforcement Network that we may engage in the sharing of information with other financial institutions as permitted by that subsection.

DISCLOSING INFORMATION IN OTHER SITUATIONS

We may also disclose any of the five types of Customer Information to credit bureaus and similar organizations, and otherwise when required or permitted by law. For example, Customer Information may be disclosed in connection with a subpoena or similar legal process, a fraud investigation, an audit or examination. Through the normal course of doing business, including servicing your accounts and better serving your financial needs, we will continue to share transaction and account experience information, as well as other general information among our companies. We may also share any of the five types of Customer Information outside Craig-Hallum Capital Group LLC if we have your consent.

KEEPING UP-TO-DATE WITH OUR PRIVACY POLICY

CHCG will provide notice of our privacy policy annually, as long as you maintain as ongoing relationship with us.

 


Policy Notice

PAYMENT FOR ORDER FLOW AND ORDER ROUTING PRACTICES

We are required by Securities and Exchange Commission rules to inform you upon account opening and on an annual basis thereafter of our policy regarding the receipt of “payment for order flow” from various third parties in connection with the routing of customer orders for execution. Those rules define payment for order flow as “any monetary payment, service, property, or other benefit that results in remuneration, compensation or consideration to a broker or dealer from any broker or dealer, national securities exchange, registered securities association or exchange member in return for the routing of customer orders by such broker or dealer to any broker or dealer, national securities exchange, registered securities association or exchange member for execution, including but not limited to: research, clearance, custody, products or services; reciprocal agreements for the provision of order flow; adjustment of a broker or dealer’s unfavorable trading errors; offers to participate as an underwriter in public offerings; stock loans or shared interest accrued thereon; discounts, rebates, or any other reductions of or credits against any fee to, or expense or other financial obligation of, the broker or dealer routing a customer order that exceeds that fee, expense or financial obligation.”  Craig-Hallum Capital Group LLC (“CHLM”) does not send orders to a venue for purposes of obtaining payment for order flow.  However, CHLM does receive rebates for providing liquidity to various trading venues which, under the above stated regulatory definition of the term, could be deemed payment for order flow.

CHLM has the obligation, and makes every effort, to execute its customers’ orders at the most favorable terms possible under the facts and circumstances surrounding each customer order. In addition, CHLM will seek to provide price improvement on its customers’ orders whenever such opportunities are reasonably available.

CHLM is a registered market maker in many Nasdaq securities and due to such status may internalize the execution of non­directed customer orders in such securities. Should CHLM internalize non-directed customer orders in Nasdaq securities in which it makes a market, CHLM may trade as principal with such customer orders and may generate a gain or loss in its proprietary account as a result of such transactions.

CHLM has, on the Trading page of its website (www.craig-hallum.com), a link to information regarding the routing of orders by Craig-Hallum.  A written copy of this SEC Rule 606 report will be furnished upon request.  Also on your request, we will disclose to you the identity of the venue to which your particular orders were routed for execution in the six months prior to the request, whether the orders were directed or non-directed orders, and the time of the transactions, if any, that resulted from such orders.

“HELD “OR “NOT HELD” ORDERS

This letter will confirm our understanding of the manner in which you want CHLM to handle orders you may place for equity securities. Absent specific instructions to the contrary, we understand that when you place an order with CHLM, you are directing that we handle your order on a “not held” basis, which means you are giving CHLM discretion to exercise our brokerage judgment to seek to obtain the best execution of your order. “Held” orders do not permit discretion in handling your order. Depending on whether your order is a market or limit order, “held” orders obligate CHLM to execute your market order immediately at the then prevailing market price or your limit order at your limit price (or better), which may not necessarily be the best price that can ultimately be obtained. Further, under the current limit order rules, “held” limit orders may often require CHLM to sell shares at the same price at which we bought them, and therefore may cause us to charge a fee or commission on “held” limit orders. “Not held” orders, on the other hand, give CHLM the flexibility and discretion to act in your best interest by working your order to seek to obtain the best execution possible.

CHLM believes that by exercising appropriate judgment and discretion (i.e. on a not held basis) with respect to your order, it can achieve the best execution possible under the surrounding facts and circumstances. Therefore, unless you give CHLM specific instructions to treat such an order differently at the time you place the order, we will treat the order as “not held”, and will work that order accordingly. We will try to use the term “not held” in taking your orders, but our omission to do so will not alter our understanding as to your order handling instructions. Please be advised that under Financial Industry Regulatory Authority (“FINRA”) rules, a “not held” order is not a priced order. Consequently, CHLM is permitted to trade for its own account at prices equal to, or better than, those of “not held” orders (that is, there are no Manning obligations), and CHLM is not required to match incoming market orders with unexecuted better priced limit orders. Nevertheless, any purchases or sales by CHLM must be consistent with our efforts to provide best execution of such orders.

AVERAGE PRICE CONFIRMATIONS

In order to provide you with best execution, we will exercise our professional discretion and may work your equity order by executing it in more than one transaction during the course of a trading day, or we may aggregate your order with other orders and execute them as a block or in multiple smaller transactions (i.e., handling an order as “not held”). Depending on market conditions, “held” market or limit orders may also be executed in multiple transactions.

In such cases, our policy is to provide our customers with an “average price confirmation” which summarizes the aggregate amount of securities purchased or sold and the “average price” of the executions. The confirmation will also indicate the capacity or capacities in which CHLM acted (that is, as principal, agent or dual agent) and the possibility that your order may have been aggregated with other customer orders and may have been executed in more than one market. Although the confirmation does not list the details of the individual executions and capacities, we are pleased to make such information available to you upon request.

In the absence of your direction otherwise at the time you place an order, we will continue to provide you with average price confirmations. Should you not agree with our treatment of your orders as “not held” or our practice of providing average price confirmations as described in the sections above, please contact your sales representative.

CHLM PRODUCTS AND SERVICES

As a customer of CHLM, we may provide you with proprietary products and services (such as research) as part of the bundled services we provide to our customers and we do not separately charge you for them (unless pursuant to a soft dollar arrangement). Should you place orders for your investment advisory clients with us, we remind you that you may also have an obligation to obtain best execution for those orders, whether it be with CHLM or with another broker-dealer.

IMPORTANT INFORMATION ABOUT NEW ACCOUNT OPENING PROCEDURES

The USA PATRIOT Act was enacted to strengthen the United States government’s ability to combat terrorist financing and money laundering. An essential component of the PATRIOT Act requires financial institutions to obtain, verify and record information that identifies each person or entity with an account relationship at a financial institution. This new regulation was effective October 1, 2003.

What this means for you:

  • For individuals opening accounts with CHLM, we will ask for your: (i) name; (ii) residential address; (iii) date of birth; (iv) social security or other U.S. taxpayer identification number, or, if you are not a citizen or resident of the United States, a passport number and country of issuance or the number and country of issuance of any other government issued document evidencing nationality or residence and bearing a photograph; and (v) such other information or documents that we consider necessary to verify your identity. This may include a form of photo identification to verify identity.
  • For corporations, partnerships, trusts or other entities opening accounts we will ask for your: (i) name; (ii) address (either your principal place of business, a local office or other physical location); (iii) a U.S. taxpayer identification number, or if you are not organized or resident in the United States or filing U.S. income tax returns, the number and country of issuance of any other government-issued document certifying the existence of your organization; and (iv) such other information or documents that we consider necessary to verify your identity. Examples of additional information include articles of incorporation, a government-issued business license, a partnership agreement or a trust instrument.

INVESTOR EDUCATION AND PROTECTION

In addition, we are required by FINRA Conduct Rule 2280 to provide you with information about the availability of information through FINRA’s Public Disclosure Program. Consequently, please be advised that FINRA offers an investor brochure, describing the Public Disclosure Program The, investor brochure may be obtained via the FINRA Web Site (www.finra.org) or through FINRA Public Disclosure Program Hotline Number at (800) 289-9999.

SIPC

You may obtain information about SIPC, including obtaining the SIPC brochure, by contacting SIPC at (202)371-8300 or accessing their website at www.sipc.org.

 

CRAIG-HALLUM CAPITAL GROUP LLC

 


Extended Hours Trading Risk Disclosure

RISK OF LOWER LIQUIDITY

Liquidity refers to the ability of market participants to buy and sell securities; generally, 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

The spread refers to the difference in price between what you can buy a security for and what you can sell it for. Lower liquidity and higher volatility in extended hours trading may result in wider than normal spreads for a particular security.

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