disclosures

The Wex website is provided solely for informational purposes and therefore should not be considered complete, precise, or current. No statement within the website should be construed as a recommendation to buy or sell a security or to provide investment advice. All customers must read all risk disclosure statements relevant to their trading before opening an account.

I. ANTI-MONEY LAUNDERING NOTIFICATION

To help the government fight the funding of terrorism and money laundering activities, Federal law requires financial institutions to obtain, verify, and record information that identifies each person who opens an account.

When you open an account, Wex is required to collect (at a minimum) information such as the following from you:

  • Your Name
  • Date of Birth
  • Address
  • Identification number, such as:
    • U.S. Citizen: taxpayer identification number (social security number or employer identification number)
    • Non- U.S. Citizen: taxpayer identification number, passport number, and country of issuance, alien identification card number, or government-issued identification showing nationality, residence, and a photograph of you.

You may also be asked to show your driver’s license, corporate documentation or other identifying documents. A corporation, partnership, trust or other legal entity may need to provide information such as principal place of business, local office, employer identification number, certified articles of incorporation, government-issued business license, a partnership agreement or a trust agreement.

II. PRIVACY POLICY

In order to provide brokerage services and maintain compliance with securities regulations, Wex collects certain personal, non-public information from you, which is obtained from the following sources:

  • Information Wex receives from you on applications or other forms; and
  • Information about your transactions with others or us.

Wex uses the personal, non-public information that we collect to service your account, which includes qualifying you for trading various products and using the services available through the Wex system. The information may also be necessary to execute and confirm your Wex transactions. In doing so we may share such information with our employees, agents, and affiliates. Wex restricts access of your personal, non-public information to those employees who need to know that information to provide products and/or services to you.

Wex maintains physical, electronic, and procedural safeguards to guard your personal, non-public information. For example:

  • Wex does not sell or license information about Wex customers to third parties, nor do we sell our customer e-mail addresses to third party marketers.
  • We maintain strict employment policies that prohibit employees who have access to personal, non-public information from using or disclosing such information except for business purposes.
  • Only authorized Wex personnel via valid user names and passwords can access the Wex system. In addition, Wex Internet-based systems include multiple security measures.
  • Wex does not disclose personal, non-public information to any parties that are not affiliated with Wex, except as provided by law. Wex will only disclose or report such information where necessary to authorize, effect, administer, or enforce transactions that you request or authorize in order to: maintain and administer your account; provide you with account confirmations, statements and records; maintain appropriate archive records; where we believe that disclosure is required by applicable law, rules or regulations, to cooperate with law enforcement or regulatory or self-regulatory organizations; enforce our customer and other agreements; meet our obligations, or to protect our rights and property.

If you decide to close your account(s) or become an inactive customer, we will adhere to the Privacy Policy and practices as described in this policy.

III. NASDAQ CUSTOMER NOTICE REGARDING PRE OR POST-MARKET SESSION TRADING

Pursuant to NASDAQ Rule 4631, all member firms must disclose to their customers any inherent risks should they choose to conduct trading activities outside of normal market hours, and that each customer should consider the following:

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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.
  7. Risk of Lack of Calculation or Dissemination of Underlying Index Value or Intraday Indicative Value (“IIV”). For certain Derivative Securities Products, an updated underlying index value or IIV may not be calculated or publicly disseminated in extended trading hours. Since the underlying index value and IIV are not calculated or widely disseminated during the pre-market and post-market sessions an investor who is unable to calculate implied values for certain Derivative Securities Products in those sessions may be at a disadvantage to market professionals.

IV. PAYMENTS FOR ORDER FLOW

The SEC and FINRA require Wex to disclose its payment for order flow practices to customers when a new account is opened and on an annual basis thereafter. Wex receives order flow payments in varying amounts from U.S. options exchanges, specialists and/or market makers pursuant to payment for order flow programs that have been adopted by the respective exchanges and approved by the SEC. Wex receives payment for option orders only. Statistical information regarding Wex’s receipt of payments for order flow will be available on the Wex website beginning in July 2009.

Additionally, Wex receives liquidity rebates from Electronic Communication Networks (“ECNs”) for certain orders routed to those ECNs. ECN liquidity rebates are credited against the fees charged by the ECNs to execute other orders. ECN rebate amounts change frequently and are typically posted on ECN websites.

V. AFFILIATE RELATIONSHIPS

Wex’s affiliate, Wolverine Trading, LLC, acts as a market maker on several U.S. option exchanges. In addition, Wolverine Trading, LLC operates as a Designated Primary Market Maker on the CBOE and as a Lead Market Maker on ARCA. Other Wex affiliates worldwide, including Wolverine Trading UK Limited, also act as market makers on global exchanges. Wex’s market-making affiliates may provide automatic execution for certain eligible Wex customer option orders routed through Wex’s order routing system. Wex also may actively solicit various market maker firms, including Wolverine Trading, LLC, to trade against customer orders verbally communicated to Wex. When an order is sent using Wex’s order routing system, if a Wex affiliate is willing to provide an execution at the best available posted price or better for that security, Wex may send the order to that affiliate for an immediate automatic execution.

As a market maker on various options exchanges, Wex’s affiliate, Wolverine Trading, LLC, may be responsible for allocating payment for order flow that is generated in its assigned options classes, depending on the design of the applicable exchange’s SEC-approved payment for order flow plan. In accordance with these respective plans, Wolverine Trading, LLC may pay such funds to Wex.

VI. BUSINESS CONTINUITY PLAN OVERVIEW

Wex’s has been developed to provide reasonable assurance that Wex, in the event that there are disruptions of normal business operations, can maintain business continuity. The plan has been developed to anticipate various types of potential disruptions to ensure that the Firm can react appropriately and timely should a business disruption occur. That said however, no contingency plan provides absolute assurance that an interruption will not occur or that as a result of a disruptive event, a disruption of normal operations will ensue. Wex may periodically update the plan in an effort to maintain as comprehensive a plan as possible.

Wex provides agency execution services only. Accordingly, the Firm’s plan focuses on identifying potential risks that may inhibit the Firm’s ability to provide execution services and implements the processes that are to be followed in order to reestablish business operations. The plan details actions and alternatives for the Firm’s systems, networking, applications, market data feeds, vital records, regulatory reports, relocation sites and employee tasks.

VII. OPTIONS DISCLOSURE DOCUMENT

Options involve risk and are not suitable for all investors. Prior to buying or selling an option, each customer must receive a copy of the Characteristics and Risks of Standardized Options http://www.tradewex.com/docs/WexOptionsDisclosure.pdf (ODD). This document is available on Wex’s website using the following link, http://www.tradewex.com/docs/WexOptionsDisclosure.pdf, or on the OCC’s website at http://www.theocc.com/publications/risks/riskchap1.jsp. Please contact your Wex representative for a paper copy of the options disclosure document or any of the other disclosures made herein.