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Accounts

Opening An Account

It is our goal to make the account opening process as efficient as possible. We simply need three pieces of information to open a DVP (delivery vs. payment) trading account with FinTech Securities.


Necessary Account Documents

  1. Account Delivery Instructions - including numbers for Tax ID, DTC, Agent Bank, Customer ID, and Institution ID.
  2. A signed W-9 form for proof of Tax ID.
  3. A Corporate Resolution or Authorized Traders Document - a document denoting the personnel who can trade on behalf of the company.

Send the account documents to FinTech through email at Info@FinTechSecurities.com or fax to 770-396-2258.


New Account Documents


Compliance

Compliance

FinTech Securities, LLC is a private, independent, registered broker/dealer with the Financial Industry Regulatory Authority (FINRA, www.finra.org). We were authorized to conduct business by the NASD (now FINRA) on November 30, 2004. All personnel are properly registered. FinTech has no payment for order flow arrangements in place of any kind.

Compliance Links:

Best Execution

FinTech Securities is an introducing broker. We and our clearing agents adhere to “best execution” of our client’s trades and conduct regular assessments of these transactions. With regard to customer executions, all markets are reviewed and assessed to ensure customers receive best execution and opportunities for price improvement. As markets and conditions dictate, this may include routing orders to Nasdaq market makers and Electronic Communication Networks (ECN’s).

Anti-Money Laundering

It is the policy of FinTech Securities to prohibit and actively prevent money laundering and any activity that facilitates money laundering or the funding of terrorist or criminal activities. FinTech has established anti-money laundering procedures which include, at a minimum, internal policies, procedures and controls, the designation of the anti-money laundering compliance officer, employee training and an audit of the processes to prevent money laundering. These procedures are designed to explain the requirements of the PATRIOT Act and to reasonably detect and report any suspicious activities/transactions.

Privacy

At FinTech Securities, we recognize the sensitive nature of financial information and take appropriate precautions to protect privacy. We are committed to protecting the privacy of our potential, current and former customers. When information is entrusted to FinTech it is used only within strict guidelines.We do not sell personal information to third parties. We do not disclose nonpublic information about our potential, current, and former customers unless allowed or required by law. We maintain physical, electronic, and procedural safeguards to protect your information.

Business Continuity

FinTech Securities has designed a strategy to provide a consistent communication framework to plan for and/or respond to any crisis situation that may disrupt the firm’s operations. Its purpose is to support the response to any crisis that may occur by providing timely, accurate information to customers. Most institutional clients of the firm will maintain uninterrupted service should the home office experience a significant business disruption.

Financials

FinTech’s most recent Focus Report and Audited Financial Reports are available upon request.


Section 28(e)

Section 28(e) Safe Harbor Act

In order to make the markets more competitive, the Commission abolished the system of fixed commissions and implemented the present system of negotiated rates, effective May 1, 1975.1 Soon thereafter, Congress enacted Section 28(e) as part of the Securities Acts Amendments of 1975.1 Congress acted in response to concerns expressed by money managers and brokers that, under the new system of negotiated rates, if managers caused a client account to pay anything but the lowest commission rate available to obtain research ("paying up"), they would be held in breach of their fiduciary duty to their clients.

Section 28(e) provides that a person who exercises investment discretion with respect to an account shall not be deemed to have acted unlawfully or to have breached a fiduciary duty solely by reason of his having caused the account to pay more than the lowest available commission if such person determines in good faith that the amount of the commission is reasonable in relation to the value of the brokerage and research services provided.

According To The Commission

Congress concluded that general fiduciary principles did not contemplate that the lowest commission rate would necessarily be in the beneficiary's best interest, and it adopted Section 28(e) in order to assure money managers that, under a system of competitive commission rates, they might use reasonable business judgment in selecting brokers and causing accounts under management to pay commissions.3 In adopting Section 28(e), Congress acknowledged the important service broker-dealers provide by producing and distributing investment research to money managers.4 Section 28(e) defines when a person is deemed to be providing brokerage and research services, and states that a person provides brokerage and research services insofar as he/she:

  1. furnishes advice directly or through publications or writing as to the value of securities, the advisability of investing in, purchasing or selling securities, or the availability of purchasers or sellers of securities;
  2. furnishes analyses and reports concerning issuers, industries, securities, economic factors and trends, portfolio strategy and performance of accounts; or
  3. effects securities transactions and performs functions incidental thereto (such as clearance, settlement, and custody) or required therewith by rules of the Commission or a self-regulatory organization of which such person is a member or person associated with a member or in which such person is a participant.

Finally, Section 28(e)(2) grants the Commission rulemaking authority to require that investment advisers disclose their soft dollar policies and procedures, as "necessary or appropriate in the public interest or for the protection of investors."


  1. The Commission adopted Rule 19b-3 under the Exchange Act, which required securities exchanges to eliminate fixed commission rates for public customers of their members effective on May 1, 1975. As early as April 1971, at the direction of the Commission, national securities exchanges adopted competitive commission rates for trades exceeding $500,000. This made commission rates negotiable for advisers of institutional accounts, in particular. The dollar amount of trades enjoying competitive commission rates was reduced over the next few years, until April 1974, when the New York Stock Exchange and other national securities exchanges adopted competitive commission rates for transactions involving less than $2,000. Exchange Act Release No. 11203 (Jan. 23, 1975). Rule 19b-3 was codified in certain respects by Section 6(e)(1) of the Exchange Act, enacted as part of the Securities Acts Amendments of 1975, Pub. L. No. 94-29, 89 Stat. 97, 107-08 (1975)[15 U.S.C. 78bb(e)].
  2. The concern over "paying up" arose in part out of litigation relating to whether investment company advisers had an obligation to recapture commission rebates for the benefit of their investment company clients. See Tannenbaum v. Zeller, 552 F.2d 402 (2d Cir.), cert. denied, 434 U.S. 934 (1977); Arthur Lipper Corp. v. SEC, 547 F.2d 171 (2d Cir. 1976), cert. denied, 434 U.S. 1009 (1978); Fogel v. Chestnutt, 533 F.2d 731 (2d Cir. 1975), cert. denied, 429 U.S. 824 (1976); and Moses v. Burgin, 445 F.2d 369 (1st Cir. 1970), cert. denied, 404 U.S. 994 (1971).
  3. Interpretive Release Concerning Scope of Section 28(e) of the Securities Exchange Act of 1934 and Related Matters, Exchange Act Release No. 23170 (Apr. 23, 1986) (the "1986 Release") at 4-5.
  4. Interpretations of Section 28(e) of the Securities Exchange Act of 1934: Use of Commission Payments by Fiduciaries, Exchange Act Release No. 12251, (March 24, 1976) (the "1976 Release").
  5. See Section 28(e)(2). In 1976, the Commission proposed disclosure rules under Section 28(e)(2), Exchange Act Release No. 5772 (Nov. 30, 1976). Later, the Commission incorporated the disclosure in Form ADV, Advisers Act Release No. 664 (Jan. 30, 1979). In 1995, the Commission proposed, but did not adopt, more specific disclosure requirements, Advisers Act Release No. 1469 (Feb. 14, 1995)


Best Practices

Soft Dollar Arrangements

For more information about the Securities and Exchange Commission’s 2006 Commission Guidance Regarding Client Commission Practices Under Section 28(e) of the Securities Exchange Act of 1934, please see:

http://www.sec.gov/rules/interp/2006/34-54165.pdf

A commission arrangement generally refers to an arrangement under which a broker-dealer provides research, brokerage, other products or services or commission recapture in connection with trades executed by the broker-dealer. Commission arrangements may be broadly categorized into soft dollar arrangements and directed brokerage arrangements, both of which are briefly described below.

Although the term “soft dollar arrangement” has no precise legal definition, it refers generally to an arrangement in which a fiduciary receives products or services from a broker-dealer in consideration of the fiduciary directing trades for its fiduciary accounts to the broker-dealer for execution. While broker-dealers historically have provided research and brokerage services to fiduciaries as part of the overall brokerage relationship, the term “soft dollar arrangement” developed as a result of the repeal of fixed commission rates.

Prior to May 1975, commissions charged by broker-dealers for trade execution were fixed by law. During this period, broker-dealers typically provided research to attract business because they could not compete on the basis of commission rates. After commission rates became negotiable and rates varied, concern arose that a fiduciary could be found to have breached its fiduciary duty by not using the broker-dealer charging the lowest commission rates available.

To address this concern, Congress amended the Securities Exchange Act of 1934 to provide, in Section 28(e), that a fiduciary would not breach its fiduciary duty when causing its clients to pay more than the lowest commission rate available if the fiduciary makes a good faith determination that the value of brokerage and research services provided by the broker-dealer is commensurate with that rate. Section 28(e) allows a fiduciary, in making its good faith determination, to consider not only the benefit to be derived by the account paying the commissions, but also the benefits derived by other accounts over which the fiduciary has investment discretion.

Because Section 28(e) is a “safe harbor”, failure to satisfy its requirements does not mean that a fiduciary necessarily has breached its fiduciary duty; rather, compliance with the requirements protects the fiduciary from a finding of breach of duty. As such, not all soft dollar arrangements are designed to conform to the requirements of Section 28(e). When managing certain types of accounts, such as registered investment company accounts and accounts subject to the Employee Retirement Income Security Act, however, a fiduciary effectively must comply with Section 28(e).

The Section 28(e) safe harbor is limited to certain types of soft dollar arrangements. For example, the safe harbor limits the types of products and services that may be furnished to a fiduciary by a broker-dealer under a soft dollar arrangement to “brokerage and research services,” the definition of which has been the subject of interpretation by the Securities and Exchange Commission and its staff. According to the SEC, whether a particular product or service falls within the definition of research is a question of fact, which depends generally on whether the product or service provides lawful and appropriate assistance to the fiduciary in connection with the performance of its investment decision-making responsibilities.

Furthermore, the brokerage and research services must be “provided by” (but not necessarily produced or created by) the broker-dealer. That being said, products or services generated by a third party can be covered by Section 28(e), and third-party arrangements are quite common. Where the products and services are not produced by the broker-dealer itself, the SEC has interpreted Section 28(e) to require the broker-dealer, rather than the fiduciary, to incur a direct financial obligation to the third-party producer. In addition, the SEC staff has interpreted Section 28(e) to apply only to securities transactions executed on an agency basis: principal trades and futures transactions are not within the scope of the safe harbor.

Fiduciaries generally are required to disclose their soft dollar arrangements to their clients. Registered investment advisers, for example, are required to describe, in their registration statement and in the disclosure brochure they provide to clients, the research products and services they receive in connection with exercising brokerage discretion. An adviser to a registered investment company must disclose, in the investment company’s registration statement, the amount of any soft dollar transactions and related commissions during the last fiscal year, and describe any research received.

Definitions Terminology

Soft dollar and directed brokerage arrangements use terminology that is somewhat specialized. For purposes of these guidelines, the terms used throughout refer to the following.

Beneficial owner refers to the underlying account which pays the commissions and for which the fiduciary with investment discretion acts. A beneficial owner may be represented by a person, such as a trustee or pension plan sponsor or administrator, who does not have investment discretion over the beneficial owner’s assets.

Commission arrangement refers to any arrangement whereby a Firm provides research, brokerage, other products or services or commission recapture in connection with trades executed by the Firm. Types of commission arrangements include soft dollar arrangements and directed brokerage arrangements.

Directed brokerage arrangement refers generally to an arrangement between a beneficial owner and a Firm whereby the Firm provides services to, or pays the expenses of, a beneficial owner with credits given for commissions paid by the beneficial owner to the Firm. Directed brokerage arrangements include commission recapture programs under which beneficial owners receive commission refunds from the Firm.

Fiduciary refers to any natural person or entity that has investment decision-making authority with respect to the assets of a beneficial owner.

Firm refers to a registered broker-dealer that provides trade execution services.

Mixed or multiple use refers to the manner in which a service or product provided to a fiduciary by a Firm through a commission arrangement may be used for both “brokerage and research” services within the scope of the Section 28(e) safe harbor and for other purposes. A fiduciary seeking the protection of the Section 28(e) safe harbor must allocate the cost of a mixed or multiple use product based on the fiduciary’s usage and may obtain from a Firm only that percentage of the cost attributable to research and brokerage services.

Research and brokerage services, refers to products and services provided by a Firm to a fiduciary that are included within the Section 28(e) safe harbor. For purposes of the safe harbor, products or services provided by a Firm can include both proprietary and third-party products and services. Whether a particular product or service constitutes research for purposes of the safe harbor is a question of fact, which depends generally on whether it provides lawful and appropriate assistance to the fiduciary in connection with the performance of its investment decision-making responsibilities.

Section 28(e) safe harbor refers to the “safe harbor” set forth in Section 28(e) of the Securities Exchange Act of 1934, which provides that a fiduciary would not be in breach of any fiduciary duty when causing accounts over which it exercises investment discretion to pay more than the lowest commission rate available if the fiduciary makes a good faith determination that the value of brokerage and research services received are commensurate with that rate and otherwise satisfies the requirements of the safe harbor.

Recommended Best Practices

Set forth below are recommended best practices and illustrative examples. The examples are provided solely as a means to illustrate practical application of the best practices in a hypothetical context. Answers to the questions presented do not necessarily represent the exclusive or most appropriate manner in which a Firm could respond to a particular situation. Rather, a Firm’s response is always dependent upon the specific facts and circumstances presented.

Establishing a Soft Dollar or Other Commission Arrangement

There are a wide variety of commission arrangements that Firms may have with either a fiduciary managing an account or directly with the beneficial owner of the account, including those involving the provision of research or brokerage services within the Section 28(e) safe harbor and those involving the provision of non-research services and commission recapture.

It is important that Firms understand these various types of arrangements, including the applicable legal and regulatory limitations, and recognize that some of these arrangements may not be appropriate for certain beneficial owners or fiduciaries.

  • One of the keys to a successful customer relationship is understanding the customer and the nature of its business. “Knowing the customer” not only enables a Firm to better service the customer’s needs, but also assists the Firm in properly handling commission arrangements.
  • Recognizing that Firms are not, and should not act as, legal counsel to fiduciaries, a Firm nevertheless should notify the fiduciary that soft dollar arrangements can present a variety of legal issues for the fiduciary and recommend that the fiduciary review the details of the proposed soft dollar arrangement with its own legal counsel or compliance advisors.
  • Firms should notify the fiduciary that it may have an obligation to disclose its soft dollar arrangements and brokerage allocation practices to its clients.

Understanding the Services to be Provided in a Soft Dollar Arrangement

  • Firms generally should notify the fiduciary that many research and brokerage services are capable of mixed or multiple use and, depending upon the fiduciary’s use of a service, that a reasonable allocation of the cost of the service may be necessary.
  • Because the fiduciary’s use of a service may change over time, Firms should recommend that the fiduciary periodically review and, where appropriate, revise its cost allocations to ensure that the allocation is reasonable given the fiduciary’s current use of the service.
  • During the course of a soft dollar arrangement, a Firm may be asked to provide the fiduciary with a product or service that does not appear to be appropriate under the arrangement. Although the fiduciary ultimately is responsible for using the product or service in a manner that is consistent with its authority and fiduciary obligations, Firms’ policies and procedures should be reasonably designed to notify a fiduciary when the requested product or service does not appear to be appropriate.
  • Firms should maintain accurate records and properly account for trading activity that is subject to a commission arrangement. For example, Firms should maintain adequate record-keeping systems and internal controls to ensure that the appropriate beneficial owners and fiduciaries are credited with the commissions received and that any commissions credited toward a product or service that is capable of mixed or multiple use are consistent with the fiduciary’s usage allocation.
  • If the fiduciary seeks to rely upon the Section 28(e) safe harbor, credits should not be provided for transactions in futures or transactions in which the Firm acts as principal.
  • Firms should report trading activity, including the commission paid and the capacity in which the Firm acted, and should, upon request, provide information regarding any commission amounts credited (as well as any debit balance) toward research or other services provided. A Firm should present this information in a clear and understandable format.
  • During the course of a soft dollar arrangement, a Firm may be asked to provide the fiduciary with a product or service that does not appear to be appropriate under the arrangement. Although the fiduciary ultimately is responsible for using the product or service in a manner that is consistent with its authority and fiduciary obligations, Firms’ policies and procedures should be reasonably designed to notify a fiduciary when the requested product or service does not appear to be appropriate.

Firm Procedures, Supervision and Employee Education

Firms that engage in commission arrangements have a responsibility to conduct business in a manner that comports with applicable legal and regulatory requirements, and should promote best practices and high business standards. This can best be achieved through the development of policies and procedures, a system for monitoring compliance with those procedures, and a program for educating and supervising employees involved in the Firm’s commission arrangements.

  • Firms should adopt and implement, consistent with each Firm’s resources, culture and risk management assessments, policies and procedures with respect to their practices involving commission arrangements. These policies and procedures should include supervisory procedures reasonably designed to ensure compliance with the policies, procedures and applicable law and should clearly delineate responsibility for handling the various aspects of the Firm’s commission arrangements.
  • The policies and procedures of a Firm should be approved by the Firm’s board of directors, a committee thereof or an appropriate level of management, and should be periodically reviewed and revised to reflect business, market and legal developments.
  • As part of their initial training and continuing education programs, Firms should advise relevant personnel as to the law and their policies concerning commission arrangements.

Best Practices for Firms that Engage in Soft Dollar and Other Commission Arrangements,
Securities Industry Association (Nov. 1997)


Routing of Trades



Business Continuity

Business Continuity Plan

Planning for the business continuity and recovery in the aftermath of a Significant Business Disruption (SBD) is important in order to ensure that the firm will be able to recover enough to continue business and meet existing obligations to its customers.

The firm operates from one office at 1010 Huntcliff NE, Suite 1230, Atlanta, GA 30350.

Firm Policy

Our firm’s policy is to respond to a Significant Business Disruption (SBD) by safeguarding employees’ lives and firm property, making a financial and operational assessment, quickly recovering and resuming operations, protecting all of the firm’s books and records, and allowing our customers to transact business. In the event that we determine we are unable to continue our business, we will provide viable alternatives to our clients to continue their business. These will include but are not limited to trading, trade settlement, statement balances and FinTech contact information.

Our plan anticipates two kinds of Significant Business Disruption, internal and external. Internal SBDs affect only our firm’s ability to communicate and do business, such as a fire in our building. External SBDs prevent the operation of the securities markets or a number of firms, such as a terrorist attack, a city flood, or a wide-scale, regional disruption. Our response to internal and external SBD relies more heavily on other organizations and systems, especially on the capabilities of our clearing firm and trading partners.

FinTech Securities settles all of its trades on a third-party or DVP basis. Therefore, we do not hold any client funds. In the case of a SBD, clients would need to contact their agent bank or custodian to access their funds. If for some reason you needed to place a trade, we would direct you to our clearing partners.