REGULATORY DISCLOSURES

1. SECURITIES INVESTOR PROTECTION CORPORATION

Themis Trading LLC (“Themis”) is a member of the Securities Investor Protection Corporation (“SIPC”) and is required to advise its customers in writing about how to obtain SIPC information. Information can obtained from the following locations.

Website: www.sipc.org
Email: asksipc@sipc.org
Telephone: (202) 371-8300
Fax: (202) 371-6728
Address: Securities Investor Protection Corporation
805 15th Street, N.W., Suite 800
Washington, DC 20005-2215

2. CUSTOMER IDENTIFICATION PROGRAM

As a FINRA member, Themis is required to obtain certain customer identification information before opening new accounts. In order to comply with this requirement, below please find a web link to FINRA’s Customer Identification Program Notice.

http://www.finra.org/industry/customer-identification-program-notice

Additionally, Themis may also obtain information about its clients from other sources, including the SEC’s Investment Advisor Public Disclosure website.

http://www.adviserinfo.sec.gov/IAPD/Content/Search/iapd_Search.aspx

3. FINRA BROKERCHECK

In connection with FINRA Rule 2267 we remind you that you may access FINRA BrokerCheck at www.FINRA.org/brokercheck in order to review public disclosures of brokerage firms. Additionally, the related FINRA BrokerCheck Hotline is (800) 289-9999.

4. BUSINESS CONTINUITY PLAN (“BCP”) DISCLOSURE STATEMENT

Themis has developed a BCP on how we will respond to events that significantly disrupt our business. Since the timing and impact of disasters and disruptions is unpredictable, we will have to be flexible in responding to actual events as they occur. With that in mind, we are providing you with this information on our BCP.

Contacting Us – If after a significant business disruption you cannot contact us as you usually do via phone, Bloomberg, email, FIX connections, or instant messaging, you should call our emergency contact persons via their cell phones 201-787-9241 or 973-615-8880. If you cannot access us through either of those means, you should contact our clearing firm, Cowen Execution Services LLC (“Cowen”, see contact information below). As an introducing brokerage firm, Themis introduces customer accounts to Cowen on a fully disclosed basis for clearance purposes. As a clearing firm, Cowen is a member of the National Securities Clearing Corporation (“NSCC”). In accordance with the rules and procedures of the NSCC and applicable law, Cowen will compare, settle or carry out any transactions submitted to it for clearance and settlement by Themis, provided that the funds or financial instruments needed to settle those transactions are provided directly from our customers or our customer’s prime broker and provided that such transactions are not the subject of any third party claim.

Cowen Execution Services LLC
1633 Broadway, 48th Floor
New York, NY 10019
Contact: Matthew Ferguson
              646-690-3165

Our Business Continuity Plan – Themis has procedures in place that strive to provide assurance that our business continuity plan is adequate to respond to the unexpected disruption of our information systems and office facilities. We plan to quickly recover and resume business operations after any business disruption. Themis will respond by safeguarding our employees and property, making a financial and operational assessment, protecting the firm’s books and records, and allowing our customers to transact business. In short, our BCP is designed to permit our firm to resume operations as quickly as possible, given the scope and severity of a significant business disruption. 

Our business continuity plan addresses data backup and recovery; all mission critical systems; financial and operational assessments; alternative communications with customers, employees, and regulators; alternate physical location of employees; critical supplier, contractor, bank and counterparty impact; regulatory reporting; and assuring our customers prompt access to their funds and securities if we are unable to continue our business. 

Our clearing firm, Cowen, has developed their own BCP in order to provide reasonable assurance of business continuity in the event that there are disruptions of normal operations at the firm’s critical facilities. As part of the plan, Cowen backs up its important Themis related records in a geographically separate area. While every emergency situation poses unique problems based on external factors, such as time of day and the severity of the disruption, we have been informed by our clearing firm that its objective is: to restore its own operations, be able to complete existing transactions, and accept new transactions and payments as soon as it is practical. Your orders and requests for funds and securities could be delayed during this period that Cowen implements its business continuity plans.  

Varying Disruptions – Significant business disruptions can vary in their scope; for example, such as only our firm, a single building housing our firm, the business district where our firm is located, the city where we are located, or the whole region. Within each of these areas the severity of the disruption can also vary from minimal to severe. If a disruption is only to our firm or a building housing our firm, we will transfer our operations to a local site if needed and expect to recover and resume business within several hours. If a disruption affects our business district, city, or region such as a pandemic, we will transfer our operations to a site outside of the affected area, and recover and resume business within one business day. In either situation, we plan to continue business and transfer operations to our clearing firm if necessary. In that event, we will notify you through our customer emergency numbers provided in the “Contacting Us” section. If the significant business disruption is so severe that it prevents us from remaining in business, we will assure our customer’s prompt access to their funds and securities.  

For more information – If you have questions about our business continuity planning, please
contact us as follows.

Themis Trading LLC
Paul Zajac, Partner
973-665-9600 phone
pzajac@ThemisTrading.com

5. ORDER ROUTING INFORMATION

Pursuant to SEC Rule 606, formerly Rule 11ac1-6, Themis provides its order routing information to its clients. Please see the following website link for our most recent routing information.

http://www.markit.com/Product/BestEx

In addition, upon written request, Themis will provide: (1) the venue to which an order was routed for execution at any time during the six month period prior to the request; (2) whether the order was directed or non-directed; and (3) the time of the execution that resulted from such order.

Please contact Themis as follows with any disclosure questions.

Themis Trading LLC
Paul Zajac, Partner
973-665-9600 phone
pzajac@ThemisTrading.com

6. ORDERS

As a condition of Themis’ acceptance of your instructions, you represent that you will, and undertake to, comply with and fulfill all of your obligations under applicable laws and regulations and will not breach such applicable laws or regulations. You also agree to provide us promptly with all information necessary for us to perform our obligations under applicable laws and regulations.  

You acknowledge and agree that Themis may without prior notice, refuse to accept, execute or cancel all or any part of an order, including, but not limited to, circumstances where Themis believes that the execution of the order would be in contravention of applicable law; provided,
however, that Themis will endeavor to give you notice of such refusal as soon as is practicable.  Themis does not and will not (i) have any liability to you hereunder as a result of Themis’ reliance on any instructions, notices or communications (whether oral or in writing) that Themis believes to be by an individual authorized to act on behalf of your account, (ii) have any duty or obligation to inquire into the purpose or propriety of any instruction, notice or communication given, (iii) have any responsibility for knowledge of or compliance with (A) any applicable law that limits your ability to send orders to Themis or to purchase or sell securities referenced in
such orders or as to the suitability of any such orders, or (B) any of your internal controls regarding authority to place orders, (iv) provide investment advice or act as a fiduciary with respect to your account, or (v) solicit a specific order or engage in a specific transaction or recommend a specific security or investment strategy.

7. PAYMENT FOR ORDER FLOW

SEC Regulation NMS Rule 607 requires Themis to disclose its payment for order flow practices.  In connection with this rule, Themis has no payment for order flow relationships with any broker dealers or third-party execution providers. However, Themis is a member on several stock exchanges that employ maker-taker pricing mechanisms. Therefore, there are times when Themis receives a rebate for trades occurring on those exchanges, as well as times when Themis is charged for trades occurring on those exchanges. This does not alter Themis’ policy to route customer orders to the trading center where it believes clients will receive the best execution,
taking into account, among other factors, price, transaction cost, volatility, market depth, quality of service, speed, and efficiency.

8. ORDER HANDLING DISCLOSURE

Themis is committed to striving to obtain the best execution when handling your orders.  Unless you designate otherwise, Themis handles your orders on a “not held” basis. The designation of an order as “not held” gives Themis the flexibility and discretion to act in your best interest by working your orders to obtain the best possible price. “Not held” orders are not subject to the SEC Order Handling Rules. Unless you indicate otherwise, this understanding applies regardless of the method you use to communicate your order including, but not limited to telephone, instant message (“IM”), email, or FIX transmission.  Please inform your Themis sales trader, if you no longer wish to have your orders handled on a “not held” basis. 

FINRA Rule 5320 generally prohibits a member firm that accepts and holds a customer order from trading for its own account at terms that would satisfy the customer order, unless the member immediately thereafter executes the customer order at the same or better price than it
traded for its own account. Please note that consistent with regulatory guidance, “not held” orders are outside the scope of the rule. While Themis does not trade proprietarily, in the normal course, Themis may require the ability to trade principally for error and accommodation purposes. As such, Themis may during the course of such transaction, trade principally at prices that may satisfy your order. This disclosure establishes your consent for Themis to engage in this type of activity while working your orders. Please reach out to your account executive should you wish to revoke this consent at any time.  

Related to FINRA Rule 5270 and in the normal course, Themis may require the ability to trade principally for error and accommodation purposes. Such principal orders may impact the price of pending client order flow. Themis, however, will use reasonable efforts to avoid or minimize any such impact and to obtain best execution for any pending client orders.

9. INSTITUTIONAL ACCOUNTS

Themis considers your account to be an "institutional account," as defined under FINRA Rule 4512 (c). Furthermore, we also consider certain newly established registered investment advisors and hedge funds to be institutional accounts.

10. SUITABILITY

FINRA Rule 2111 requires Themis to have a reasonable basis to believe that an institutional customer is capable of evaluating investment risks independently, both in general and with regard to particular transactions and investment strategies involving a security or securities and to have our institutional customer affirmatively indicate that it is exercising independent judgment in evaluating the member's or associated person's recommendations. Where an institutional customer has delegated decision making authority to an agent, such as an investment adviser or a bank trust department, these factors shall be applied to the agent.

11. ANTI MONEY LAUNDERING

The USA Patriot Act (the “Act”) was established to detect, deter and punish terrorist acts in the US and world.  The Act imposes anti-money laundering requirements on broker-dealers and other financial institutions.  Under the Act’s provisions, all broker-dealers are required to have comprehensive anti-money laundering programs with procedures and controls that include verification of the identification of new customers, reporting suspicious transactions, reporting certain currency/asset transfers, designation of a compliance officer, and conducting an independent audit of the program.  All customer transactions conducted by Themis are subject to compliance with the Act.  As part of Themis’ required program, it may request that you provide various identification documents or other information.  Themis will not be able to open an account or effect any transactions on your behalf until all required information and/or documentation has been provided.

You agree that, if required by applicable law, (i) you have adopted and implemented anti-money laundering policies, procedures and controls that comply (and will continue to comply) in all respects with the requirements of applicable anti-money laundering law and other applicable law; (ii) you will at all times adhere to its anti-money laundering policies, procedures and controls; (iii) you have verified the identify of, and has conducted due diligence (and, where appropriate, enhanced due diligence) with regard to its investors in accordance with its anti-money laundering policies, procedures and controls and will provide Themis with that information upon request; and (iv) you maintains records of procedures used to verify the identity of its investors and updates such information on a regular basis.

You acknowledge that you are not (i) a “foreign shell bank,” (ii) a resident of a non-cooperative Financial Action Task Force jurisdiction or an individual or organization operating in a jurisdiction or industry designated as being of primary money laundering concern by the U.S. Secretary of Treasury; (iii) an individual or organization which the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) has listed as a “Specially Designated National and Blocked Person”; or (iv) a resident of any embargoed country as determined by OFAC.

12. INTERNATIONAL TRADING

Where an order originating in your jurisdiction involves a transaction in a foreign jurisdiction, Themis may arrange for the order to be executed by a third party licensed to conduct transactions in the relevant jurisdiction as agent for Themis.  Where this occurs, (i) you will not become a client of the relevant third party; (ii) you will receive a confirmation from or on behalf of Themis; and (iii) any rights of recourse that you may have with respect to such orders will be against Themis and not against the third party.  From time to time, it will be necessary for certain data about you to be disclosed to third parties. Such data may, if required, be sent to such other countries.  You hereby consent to such data transfers and disclosures.

13. SHORT SALES

The SEC has adopted Regulation SHO under the Securities Exchange Act of 1934 (the “Exchange Act”) covering short sale transactions.  The rule establishes certain stock locate and close-out standards that are intended to prevent abusive naked short selling practices.  The regulation also imposes short sale related circuit breakers.  All customer transactions conducted by Themis are subject to compliance with this rule.

You agree to comply with or assist Themis to comply with the order marking requirements of Regulation SHO, including, without limitation, the locate requirements set forth in Rule 203 of Regulation SHO.  All sell orders must be marked “long”, “short” or “short exempt”.  You agree to comply with all applicable law to locate securities to be delivered to settle and clear any such short sale.  Furthermore, you agree that, unless it is exempt from the locate requirements of Regulation SHO, you will provide the identity of the entity acting as the source of its locate for all short sell orders.  If no locate information is provided by you on a short sale order, Themis may reject your order.  You agree that Themis may take action to prevent the execution and/or clearance and settlement of any order or transaction that would violate any applicable law, including but not limited to securities designated as “threshold securities” under Rule 203 of Regulation SHO.

14. EXTENDED HOURS TRADING RISK DISCLOSURE

Themis executes extended hour trades (before 930AM and after 4PM) for its clients.  Please be aware of the following additional risks during Pre-Market and Post-Market trading.

  • 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 markets 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 of 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 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.
  • Risk of Lack of Calculation or Dissemination of Underlying Index Value or Intraday Indicative Value ("IIV") and Lack of Regular Trading in Securities Underlying Indexes.  For certain products, an updated underlying index or portfolio value or IIV will not be calculated or publicly disseminated during Extended Trading Hours. Since the underlying index or portfolio value and IIV are not calculated or widely disseminated during Extended Trading Hours, an investor who is unable to calculate implied values for certain products during Extended Trading Hours may be at a disadvantage to market professionals.  Additionally, securities underlying the indexes or portfolios will not be regularly trading as they are during Regular Trading Hours, or may not be trading at all. This may cause prices during Extended Trading Hours to not reflect the prices of those securities when they open for trading.

15. PRIVACY POLICY NOTIFICATION (SEC Rule S-P)

Themis and its employees understand that privacy is an important issue for its customers.  It is our policy to respect the privacy of all customers and accounts that we maintain as an introducing broker, and to protect the security and confidentiality of related non-public information.  We also understand that this policy applies to current and former customers.

Personal/Private Information Collections - Themis introduces accounts on a fully disclosed basis to Themis’ clearing broker, Cowen, In order to service introduced accounts and provide other financial services that customers have requested (e.g. commission sharing arrangements), Themis collects information and provides it to its clearing broker and other required parties.  The information may come from the following sources.

  • Information received from customers; such as customer name, address, telephone number, social security number, tax ID number, occupation and income. 
  • Information relating to trading and clearing in connection with customer transaction; including account balances, trade details, positions and allocations.
  • Information received from consumer reporting agencies, customer vendors and the government; such as credit bureau and other information relating to customer creditworthiness or reports obtained while conducting our AML obligations.
  • Information received from other sources with customer consent or with the consent of customer clearing brokers.

Sharing of Nonpublic Information - Themis does not disclose non-public personal information relating to current or former customers to any third parties; except as required or permitted by law and in order to facilitate the clearing of customer transactions, records archiving, or other financial services requested by customers in the ordinary course of business. 

Security - Themis strives to ensure that our systems are secure and that they meet industry standards. We protect personal information by maintaining physical, electronic and procedural safeguards that either meet or exceed applicable law. Where appropriate, we employ firewalls, encryption technology, user authentication systems (i.e. passwords and personal identification numbers) and access control mechanisms to control access to systems and data. Third parties who have access to such personal information must also agree to follow appropriate standards of security and confidentiality.

Opt-out Policy - If you prefer that we do not share your information (other than as prescribed by law) with non-affiliated third parties, you may contact our Compliance Department at 973-665-9600 or pzajac@ThemisTrading.com.

16. LARGE TRADER RULE

In accordance with Securities Exchange Act Rule 13h-1 market participants that conduct a substantial amount of trading activity are required to file Form 13H in order to identify themselves as a “large trader” to the SEC.  The SEC assigns a large trader identification number that must be provided to the participant’s registered broker-dealers.  Broker-dealers are then required to maintain records, including large trader transaction times, which may be required upon the request of the SEC.  

17. INTERNET SECURITY

Should you suspect your email account has been compromised, please contact Themis immediately at (973) 665-9600 so that you can instruct us to temporarily suspend any electronic delivery of sensitive account information as needed until you can resolve those issues with your internet service provider.

18. ODD LOT TRADING / “TRADE SHREDDING”

In connection with certain exchange regulations we remind you of the following prohibited actions.  Themis traders comply with these prohibitions.

  • Breaking up orders for the primary purpose of maximizing rebates or other payments;
  • Breaking up orders for the purpose of affecting the number of regulatory authority transaction reports; and
  • Entering both buy and sell odd-lot limit orders in the same stock before one of the orders is executed for the purpose of capturing the spread in the stock.

19. RULE 15c3-5 AND MARKET ACCESS

Rule 15c3-5 requires broker-dealers with or providing access to trading securities on exchanges or Alternative Trading Systems (“ATSs”) to establish, document, and maintain a system of risk management controls and supervisory procedures reasonably designed to manage the financial, regulatory and other risks in connection with market access.  Themis has developed controls which will reject or block orders that exceed previously defined risk parameters.  In the case of blocked orders, Themis will make the determination in a reasonable amount of time as to whether it is appropriate to send the orders to the market. 

20. MARKET ON CLOSE (“MOC”)/ Limit on Close (“LOC”)

NYSE and NYSE AMEX securities are subject to a deadline of 3:45 p.m. for the entry of MOC and LOC orders on all trading days.  There is no exception to this general rule for orders entered to offset imbalance publications.  Between 3:34 p.m. and 3:58 p.m., MOC and LOC orders are irrevocable, except to correct a legitimate error (e.g., side, symbol, price, or duplication of an order).  After 3:58 p.m., cancellation or reduction in size of MOC and LOC orders will not be permitted for any reason, including in the case of a legitimate order. 

21. RESTRICTED SECURITIES

You acknowledge and agree that you will not place an order to sell any securities subject to Rule 144 or 145(d) under the Securities Act of 1933, as amended, unless you first notify Themis regarding the status of such securities and furnish Themis with any and all legal documentation (including opinions of legal counsel, if requested) to permit legal transfer of such securities.  You are responsible for any and all costs and expenses associated with compliance or failure to comply with the requirements of Rule 144 and 145(d).  Furthermore, you recognize and acknowledge that even if all necessary documentation is provided to Themis in a timely manner, there may be delays in processing securities transactions subject to Rule 144 or 145(d) under the Securities Act of 1933, as amended.  Themis, in its sole and absolute discretion, may require the retention of proceeds from any sale and/or that such securities not be delivered until the securities clear legal transfer.