SmartMoney Investment Advisors DBA Smartmoney.co, LLC (SMIA) provides an automated investment advisory frm (robo-advisory frm), where a portfolio will be assigned to you based on KYC (know-your-customer) inputs. SMIA will not make decisions for customers on an individual basis. You alone are responsible for evaluating the merits and risks associated with the use of our systems, services or products. Please review carefully the following information before making any investment decisions.
SMIA may at any time revise these Disclosures. You agree to be bound by subsequent revisions and agree to review the Disclosures periodically for changes. The most updated version of these documents will always be available for your review on this page, accessible by clicking on the “Disclosures” link that appears at the bottom of the pages on the website.
This agreement (“Agreement”) contains important information regarding the terms and conditions which apply to your investment advisory account with SmartMoney Investment Advisors, LLC d/b/a SmartMoney.co, LLC, Member FINRA, hereinafter referred to as “SMIA”.
Notwithstanding any language to the contrary in this or other agreement you entered into with SMIA or its clearing frm, if the terms of this Agreement are in confict with the terms of another agreement(s), then the terms of this Agreement shall prevail.
SMIA has entered into broker-dealer license with ChoiceTrade, and clearing arrangements with Velox Clearing LLC. The broker-dealer and clearing frms where your
account is held is referred to hereinafter as “our B/D-clearing frms”. According to this clearing agreement, our B/D-clearing frms will perform certain services and are carrying your account as a clearing broker pursuant to the clearing agreement. These services include but are not limited to the preparation of customer trade confrmations and customer statements, the settlement of securities transactions, the performance of designated cashiering functions, the carrying of customer securities, the providing of credit in connection with the purchase, carrying and borrowing of securities, and the preparation of certain books and records related to reported securities transactions. Furthermore, unless our B/D-clearing frms receives from you prior written notice to the contrary, it may accept from SMIA, without inquiry or investigation, orders for the purchase or sale of securities and/or other property in your account, on margin or otherwise. Neither our B/D-clearing frms nor any of their afliates and their respective ofcers, directors, agents and employees are responsible or liable for any representations, acts or omissions that may be made by SMIA and its associates. SMIA is not acting as the agent of our B/D-clearing frms. Our B/D-clearing frms are not acting as your agent and neither our B/D-clearing frms nor any of its afliates and their respective ofcers, directors, agents and employees are responsible or liable for any trading loss incurred by you. SMIA may license its online trading technology from an unrelated third party, hereinafter referred to as the “Licensor.” To the extent required by law or regulation, SMIA is responsible for monitoring and supervising the compliance with the rules and regulations for the opening, approving and monitoring of your account and you should direct any questions you have regarding your account directly to SMIA. If our B/D-clearing frms send you a notice detailing allocation of responsibilities, you agree that the allocation of responsibilities therein only pertains to
such allocation between us and our B/D-clearing frms, and not between us and you. Your responsibilities are mentioned in this agreement.
YOU UNDERSTAND AND AGREE THAT THE APPLICABLE TERMS AND CONDITIONS OF THIS AGREEMENT, INCLUDING THE ARBITRATION PROVISIONS, APPLY TO BOTH SMIA AND OUR B/D-CLEARING FIRMS AND THIS AGREEMENT AND ANY RELATED AGREEMENTS SHALL GOVERN ALL MATTERS BETWEEN OR AMONG YOU AND SMIA AND OUR B/D-CLEARING FIRMA, THEIR AFFILIATES AND THEIR RESPECTIVE OFFICERS, DIRECTORS, AGENTS AND EMPLOYEES. YOU UNDERSTAND AND AGREE THAT ANY RIGHTS THAT EITHER OUR B/D-CLEARING FIRMS OR SMIA HAS UNDER THIS AGREEMENT MAY BE EXERCISED BY EITHER OUR B/D-CLEARING FIRMS OR SMIA OR MAY BE ASSIGNED TO THE OTHER, INCLUDING, BUT NOT LIMITED TO, THE RIGHT TO COLLECT ANY DEBIT BALANCE OR OTHER OBLIGATIONS OWING IN YOUR ACCOUNT(S) AND THAT OUR B/D-CLEARING FIRM AND SMIA MAY COLLECT FROM YOU OR ENFORCE ANY OTHER RIGHTS UNDER THIS AGREEMENT INDEPENDENTLY OR JOINTLY.
PLEASE READ THIS AGREEMENT CAREFULLY and retain it for future reference. By signing your application you accept and agree to abide by all of the terms and conditions as set forth in this Agreement. You understand and acknowledge that SMIA may modify or change the terms and conditions set forth herein by posting such modifcations or changes online, and your use of the account after acknowledging such posting shall constitute acceptance of such modifcations or changes. If you do not agree with any of these terms and conditions or fnd any part of these terms and conditions unacceptable, do not sign your application and do not submit it to us.
Defnitions
As used in this Agreement herein, “you” and “your” shall refer to the individuals or parties, who are the account owners and sign the SMIA new account application or agree to this Agreement.
Throughout this Agreement, “obligations” means all indebtedness, debit balances, liabilities or other debt of any kind whether now existing or hereafter arising in your account, even after the closure of your account.
Throughout this Agreement, “securities and/or other property,” refers to, but is not limited to, money, securities, fnancial instruments and commodities of every kind and nature and all contracts and options, whether for present or future delivery.
1. Opening Account, Account Approval and Credit Investigations
You acknowledge that all of the information you provided in your account application is accurate and truthful and that no one except you has an interest in any of your accounts. If more than one person signs the SMIA new account application or is indicated as the account owner on this account form, their obligations under this Agreement shall be joint and several.
You acknowledge and agree that if you check the appropriate box on the new account application that you specifcally want to establish a Margin Account, SMIA will establish your account, as legally permissible and if approved, as a Margin Account. If
you do not check the box, the terms and conditions listed in the ‘Margin Accounts’
section of this Agreement will not apply to you.
This Agreement is effective only upon approval by SMIA. SMIA or our B/D-clearing frms may decline your application for any reason. You authorize SMIA and our B/D-clearing frms, in their discretion at any time and from time to time, to request or obtain a credit report on you and upon your written request, SMIA or our B/D-clearing frms will provide the name and address of the reporting agency that furnished the reports.
SMIA may request other documents for verifcation of some special account requirements including SSN, birth certifcate, citizenship, income source etc.
2. No Investment Advice
You understand that only SMIA, not our B/D-clearing frms, or any of their associates, afliates, or third party providers, including the Licensor do not provide investment, tax, legal or accounting advice with respect to the potential value or suitability of any particular security or investment strategy. You further understand that only SMIA and not our B/D-clearing frms are not authorized to give any such advice, and that you will not construe any third party research or recommendation (even if the third party is afliated with SMIA), the text of SMIA’s emails or other service accessible through SMIA, whether or not regarding any particular security or investment strategy, as an endorsement or recommendation to buy or sell any of the securities and/or other property discussed therein. The portfolio assigned to you by SMIA will be determined by the platforms based on your inputs, not by any investment professional on one-to-one
basis. Any third party research or other service accessible through SMIA is based upon the consideration that it is reliable, but SMIA and the Licensor do not represent that the information is accurate or complete. You agree not to hold our B/D-clearing frms, or any of their associates, afliates, or third party providers, including the Licensor liable for any decisions concerning your account, including but not limited to, all orders entered by you, electronically or otherwise. You give permission to SMIA to determine whether each investment you make is consistent with your risk tolerance level or your fnancial and investment profle. You assume full responsibility to provide accurate inputs to determine your risk profle. You also give permission to SMIA to sell, buy or make adjustments to your investment portfolio but not an individual basis.
3. Fees and Charges
SMIA and our B/D-clearing frms may charge commissions and other fees for execution or any other service furnished to you and you agree to pay the fees and charges as they apply to your account, transactions and other services you receive. These fees include, but are not limited to, fees charged by regulatory and self-regulatory organizations, paper statement and trade confrmation fees, and fees for excessive quote usage. In the event your state or other jurisdiction charges SMIA a transaction or business tax or fee, not including income tax, on transactions or revenue or proft on securities activity, this amount will be added to your commission or the cost of your trade. You understand that the transactional fees we charge you will reduce your profts and increase your losses, and that if you transact small dollar amounts, this effect will be magnifed. Your invoice will have itemized entries for each charge. Even when SMIA charges no fee, these regulatory and self-regulatory fees may appear. You agree that you will be solely
responsible for any adverse effect of transacting small dollar amounts. SMIA may require you to make an initial minimum deposit to open your account and to maintain a minimum balance in the account thereafter, in order to avoid any maintenance fees. You understand that all fees and charges are subject to change by SMIA from time to time after notice to you, which notice may be a posting on the website. A fee schedule is available on the website. In the event SMIA does not know the exact amount of certain fees charged by parties other than SMIA, such fees may be posted on the fee schedule as “As Determined” or some similar designation. You expressly agree to pay the amount of such fees, when debited to your account. Once a fee change is posted on the site, your use of the site or your SMIA account constitutes your acceptance of the new fee. In addition, you agree that SMIA may pay an access fee per order and/or other types of referral fees, software fees or advertising fees to certain parties that refer you to SMIA, and you also agree that some of these referral sources may have ownership in SMIA or SMIA may have ownership in the referral source(s), or both.
4. Transactions and Settlements
All orders for the purchase and sale of securities and/or other property will be authorized by you and executed with the understanding that you intended to transact an actual purchase or sale. It is your intention and obligation, in every case, to pay in full, or deliver certifcates to cover any sales, on or before settlement date, for any security and/or other property purchased or sold for your account. If SMIA makes a sale of any securities and/or other property at your direction and if you fail to deliver to SMIA or our B/D-clearing frms any securities and/or other property that SMIA has sold at your direction, SMIA or our B/D-clearing frms are authorized, subject to applicable laws, to
borrow or otherwise obtain the securities and/or other property, without notice, to enable SMIA or our B/D-clearing frms to make delivery and you understand that you will be responsible for any cost or loss that SMIA or our B/D-clearing frms may incur, including the cost of borrowing and obtaining the securities and/or other property.
Though orders are usually routed to the marketplace within seconds, certain orders received by SMIA, may be subject at SMIA’s sole discretion to manual review and entry, which may cause delays in the processing of your orders and you will not hold SMIA responsible for any delays that the manual review and entry might cause. You also understand that you will receive the price at which your order executes in the marketplace, which may be signifcantly different from the price of the security at the time when you placed your order through SMIA. Further, you understand that entering an order through SMIA, including market orders, either electronically or otherwise, does not guarantee execution of the order, and you agree that neither SMIA nor third party providers, including the Licensor shall be responsible for any order that is not executed. You understand that SMIA, our B/D-clearing frms, the Financial Industry Regulatory Authority (FINRA), and any organized exchange have the right to break any executed transaction on the grounds that it was, in their opinion, “clearly erroneous”. SMIA shall not be deemed to have received any order electronically or otherwise transmitted by you until it has actual knowledge of such order.
The orders placed through SMIA’s automated scheduling system will be collected from all the customers and executed at a specifc time like 12 PM PST/3 PM EST by our B/D-clearing frms.
5. Purchases of Securities
To process orders to purchase securities, SMIA and our B/D-clearing frms generally require that your account contain sufcient funds equal to or greater than the purchase price of the securities prior to the trade date. If any order in your account is inadvertently accepted and executed without sufcient funds, you understand that your account will be subject to cancellation or liquidation at SMIA’s or our B/D-clearing frms’ discretion. You are responsible for your orders, including any orders which exceed available funds in your account and you must monitor the status of your account, including any orders, at all times.
If full funds are not available in your account and an order is processed, your payment must be promptly submitted to SMIA or our B/D-clearing frms to assure that such payment will be received and processed on or prior to settlement date. If payment is not received by settlement date, or as market conditions warrant, your account may be liquidated, without prior notifcation. In the event that your account is liquidated, you will be liable for any resulting losses and all associated costs incurred by SMIA or our B/D-clearing frms.
6. Sale of Securities; Short Sales
SMIA generally requires that prior to the acceptance of a sell order, the stock certifcates be deposited into your account and in good deliverable form. You agree that any order in your account that is inadvertently accepted without negotiable certifcates in your account will be subject to cancellation or buy-in at SMIA’s or our B/D-clearing frms’
discretion. Furthermore, any order accepted without negotiable certifcates in your account, will be deemed a “short” sale unless, at the time the order was entered, you expressly request and receive permission from SMIA that the sale is a long sale. Placing any sell order that is a long sale, constitutes your representation that you own the security with respect to the order that has been placed, and that you agree to deliver the securities sold to SMIA in good deliverable form on or before settlement date. You are responsible for any losses or expenses incurred by SMIA or our B/D-clearing frms as a result of your failure to make such delivery.
You understand that in placing any sell order for a “short” account, you will designate the order as such and hereby authorize SMIA to mark the order as being “short” at the time the order is placed. SMIA or our B/D-clearing frms must be able to borrow the security that you do not own in order to complete the short sale and if SMIA or our B/D-clearing frms are unable to borrow the security that you sold short, you will be subject to a buy-in. Short sales are only permitted if you have a current agreement with our B/D-clearing frms allowing such sales.
All other sell orders will be for securities owned by you at the time the order is placed, and must be long and in good deliverable form in your account on or before settlement date of the transaction.
You understand that the proceeds of the sale cannot be paid to you until SMIA or our B/D-clearing frms have received the certifcate(s) in good and deliverable form. If the certifcate(s) are not received on or before settlement date, or as market conditions warrant, the securities may be purchased on the open market by SMIA or our
B/D-clearing frms in accordance with the requirements under Regulation T of the Federal Reserve Board. If the securities are bought in, you will be responsible for any resulting losses and all associated costs incurred by SMIA or our B/D-clearing frms.
7. Accuracy of Account Information
You represent that you are of required legal age to enter into this Agreement. Further, you represent that unless you have notifed SMIA to the contrary, neither you nor any member of your immediate family is an employee of any exchange, or of any corporation in which any exchange owns a majority of the capital stock, or a member of any exchange, or self-regulatory agency, or a member of any frm or member corporation registered on any exchange, or of a bank, trust company, insurance company, or of any corporation, frm or individual engaged in the business of dealing, either as broker or principal, in securities bills of exchange, acceptances or other forms of commercial paper. You agree to promptly notify SMIA in writing if you, or any member of your immediate family, become so employed and you acknowledge that you have disclosed any afliation information to SMIA. You warrant that each and every piece of information you provide to SMIA on your account application and in relation to your SMIA account is accurate and truthful. If such information changes, you agree to notify SMIA promptly in writing.
8. Payment for Order Flow
It is a requirement of the Securities and Exchange Commission (SEC) and FINRA that all broker/dealers inform their customers of payment for order fow practices when a new
account is opened, and on an annual basis thereafter, and on confrmations. You acknowledge that our B/D-clearing frms may receive compensation for directing orders through designated “market makers” and specialists on registered U.S. exchanges for execution. Consistent with the overriding principle of best execution and subject to applicable regulatory requirements, our B/D-clearing frms will route orders to primary exchanges and other market centers, including regional securities exchanges, dealers that make markets over-the-counter and Electronic Communication Networks (ECN). Our B/D-clearing frms takes a number of factors into consideration in determining where to send your orders, including execution price and opportunities for price improvement, the speed and accuracy of execution, the level of service provided, the cost of executing orders at a particular market or frm, whether cash or non-cash payments will be received for routing order fow and reciprocal business arrangements. Price improvement occurs when an order is executed at a price more favorable than the displayed national best bid or offer. Our B/D-clearing frms regularly review transactions for quality of execution purposes. You agree that our B/D-clearing frms may use its discretion in selecting a particular exchange or market center in which to route your order. The source and amount of any compensation received in connection with a transaction and any additional information concerning order fow will be disclosed upon written request.
9. Applicable Rules and Regulations
All transactions for your account shall be subject to the applicable laws, rules, regulations, customs and usages of all federal, state and self-regulatory authorities, including but not limited to, the rules and regulations of the Securities and Exchange
Commission, FINRA, and the Board of Governors of the Federal Reserve System. Furthermore, all transactions for your account shall be subject to the constitution, rules, regulations, customs and usages of the exchange or market (and clearing house) where such transactions are executed. Also, where applicable, all transactions shall be subject to the provisions of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. By signing your application, you warrant that you are aware of securities rules relative to your account activity. Should you or any party trading in your account violate one or more rules and should SMIA or its clearing frm face regulatory action, you hereby agree to indemnify SMIA and its clearing frm and to reimburse us for all associated costs including without limitation fnes, cost of defense and reputational damage. The foregoing applies even if you have closed your account with us as long as the events that led to regulatory action occurred between the time you applied and the time you closed your account.
10. Joint Accounts
If this is a joint account, each of you signing this Agreement (each a “joint owner”) agrees that he or she shall be jointly and severally liable for all obligations arising under the Agreement and for any amounts due to SMIA or our B/D-clearing frms pursuant to this Agreement. Each joint owner irrevocably appoints the other(s) as attorney-in-fact to take all action on his or her behalf and to represent him or her in all matters with respect to this Agreement. SMIA and our B/D-clearing frms are authorized to act upon the instructions of any joint owner and you agree that SMIA and our B/D-clearing frms shall be fully protected in acting upon the instructions of any joint owner. Each joint owner shall have the authority to buy and sell securities and/or other property on margin or
otherwise, as allowed in the account, receive confrmations, statements and communications of every kind related to the account and to receive money, securities and/or other property in the account. SMIA shall not be responsible for determining the purpose or propriety of an instruction received from any account owner or for the demand for deliveries or payments. Each joint owner agrees that any notice sent to any joint owner shall be deemed to be notice sent to all joint owners.
In the event of the death of any of the joint owners, the surviving joint owner(s) shall immediately provide SMIA with proper written notice of such event. You understand that SMIA and our B/D-clearing frms may, before or after receiving such notice, take such proceedings, require such documents, retain such portion of and restrict transactions in the account as deemed advisable to protect them against any tax, liability, penalty or loss under any present or future laws or otherwise. The estate of any deceased joint owner shall be liable and each survivor will be jointly and severally liable to SMIA and our B/D-clearing frms for any debt or loss in the account resulting from the completion of transactions initiated prior to the receipt of a written notice of such death by SMIA, or for debt or loss incurred in the liquidation of the account or the adjustment of the interests of the joint owners.
Any taxes or other expense becoming a lien against or being payable out of the account as the result of the death of any of the joint owners, or through the exercise by his or her estate or representatives of any rights in the account, shall be chargeable against the interest of the surviving joint owner(s) as well as against the interest of the deceased joint owner’s estate.
SMIA reserves the right to require written instructions from all account owners, at its sole discretion. Furthermore, SMIA reserves the right, but is not obligated, to place trading, disbursement and other restrictions on an account in the event SMIA receives notice of a dispute among, or conficting instructions from, joint account owners.
11. Confrmations, Statements, Notices and Other Communications
You understand that it is your responsibility to review upon frst receipt, all confrmations of the execution of orders (transactions), all account statements and any notices and other communications, including but not limited to, margin and maintenance calls. Transactions shall be conclusive and binding upon you, if not objected to in writing by you, within fve (5) days after the confrmation is sent to you. The information contained in your account statement, except for the executions of orders, which is covered in the preceding sentence, shall be conclusive and binding upon you, if not objected to in writing by you, within ten (10) days after the statement is sent to you. In all cases, SMIA reserves the right to determine the validity of your objection. If you have a retirement account and receive summary statements from the custodian, you will rely on your brokerage statements and confrm that we or our B/D-clearing frms send you to review and oversee your account activity, not on the summary statements received from the retirement account custodian.
You agree that all notices and other communications, including but not limited to, margin and maintenance calls, delivered by email or mail to your address on record that you provided to SMIA shall, until SMIA has received notice in writing of any different address, be deemed to have been personally delivered to you whether actually received
or not. Notices and other communications may also be provided to you verbally. Such notices and other communications left for you on your answering machine, or otherwise, shall be deemed to have been received by you whether actually received or not.
You agree that SMIA and our B/D-clearing frms fulfll their legal or contractual obligation to deliver any notice or other communication if delivered through electronic mail or other electronic means. All notices and other communications sent through electronic mail or other electronic means will contain all of the information as it appears in such documents as sent to you through the mail. You agree that you have read SMIA’s Business Continuity Plan summary that appears at the bottom of each web page. You acknowledge that if you experience any difculty receiving and/or opening any notices or other communications sent to you electronically by SMIA or our B/D-clearing frms, you will immediately contact SMIA to have the appropriate documents sent to you by other means. You acknowledge that your failure to contact SMIA regarding any such difculty within two (2) days after delivery of any notice or other communication will be considered an afrmation that the appropriate documents were received and opened by you.
Before placing your frst order, you have read and agree with all disclosures emailed to you and provided on our Web site, including without limitation, risk, pre- and post-market trading, margin and option disclosures. Additionally, before you place your frst order in a particular mutual fund, ETF, or any other security requiring a prospectus, you hereby agree that you have yourself accessed online, read and understood the contents of each
such prospectus. If you are not in agreement with any aspect of these documents, you will not place orders with us.
You may obtain information about the Securities Investor Protection Corporation, including the SIPC brochure, by contacting SIPC at www.sipc.org or 202-371-8300.
12. Payment of Indebtedness
You agree at all times to be liable for the payment to SMIA or our B/D-clearing frms, upon demand of either SMIA or our B/D-clearing frms, of any debit balance or other obligations owing in any of your accounts at SMIA. If this is an entity account, then the natural person signing the account application and all other principals of the entity agree at all times to be liable for the payment to SMIA or our B/D-clearing frms, upon demand of either SMIA or our B/D-clearing frms, of any debit balance or other obligations owing in the entity account at SMIA. Your account may not be closed without SMIA or our B/D-clearing frms frst receiving all securities and/or other property for which the account is short and all outstanding debts which you owe to SMIA or our B/D-clearing frms for any reason whatsoever. We may liquidate positions and/or cancel orders in your account with or without notice to you to discharge your indebtedness. All reasonable costs and expenses of collection of any such indebtedness or debit balance, including but not limited to, SMIA personnel time at the rate of four hundred and ffty dollars per person per hour, attorneys’ fees and court costs, shall be payable by you to SMIA or our B/D-clearing frms. You agree to pay us the highest rate of interest permitted by law from the date your account balance becomes negative until the date
we or our B/D-clearing frms receive good funds from you in full satisfaction of such balance and all collection expenses.
SMIA may offer you the privilege of trading against check or ACH deposits before actual collection or receipt of the proceeds. In this regard, you understand and agree that if a deposited check is dishonored by the bank on which the check drawn or the privilege is otherwise abused, SMIA may, at any time in its sole discretion without notice, revoke this privilege and/or liquidate all securities positions in your account that were purchased and/or sold short using the uncollected funds without incurring any liability on its part. You further agree, that any trading gains resulting from trading against uncollected funds represented by a deposited check or other fnancial instrument are the property of SMIA unless and until the funds represented by that instrument (not a substitute or supplemental instrument) are collected by SMIA, and that you remain responsible to SMIA for any trading losses resulting from such trading, in addition to your responsibility to make good any dishonored check.
If Customer also holds a futures account with our B/D-clearing frms, Customer hereby authorizes our B/D-clearing frms, without prior notice, to transfer assets from or to any account held with our B/D-clearing frms.
Notwithstanding any language to the contrary in this or other agreement you entered into with SMIA or our B/D-clearing frms, you expressly agree that either SMIA or our B/D-clearing frms may fle a complaint in a court or other legal forum of their choice to collect an unsecured debit in your account. If you decide to move the action to, or fle a counterclaim in, another forum, you agree to reimburse SMIA for all fees charged by
such other forum to SMIA and our B/D-clearing frms, regardless of the outcome of the action. Such reimbursement shall be in addition to all other costs and expenses of collection.
13. Security Interest and Lien
All of your securities and/or other property in any account in which you have an interest or hereafter acquire an interest, which is now or hereafter held by SMIA or our B/D-clearing frms, shall be subject to a frst and prior lien in favor of SMIA and our B/D-clearing frms for the discharge of any and all indebtedness or any other obligation you may have to SMIA or our B/D-clearing frms, and are to be held by SMIA or our B/D-clearing frms as security for the payment of any liability or indebtedness of yours to SMIA or our B/D-clearing frms in any of your accounts. You understand that SMIA and our B/D-clearing frms, subject to applicable laws, shall have the right to use and/or transfer securities and/or other property in any account with SMIA in which you have an interest whenever SMIA or our B/D-clearing frms considers such transfer necessary for their protection. In enforcing any liens, SMIA or our B/D-clearing frms at their sole discretion may determine which securities and/or other property are to be sold and which contracts or positions are to be closed.
14. Interest on Debit Balances
You understand that any debit balances in any of your accounts, whether or not such accounts are denominated as “Margin Accounts,” may be charged interest in accordance with our B/D-clearing frms’ established custom, as disclosed to you in the
margin agreement you signed, as amended. Any debit balance, which is not paid at the close of an interest period, will be added to the opening balance for the next interest period.
15. Free Credit Balances
You hereby authorize our B/D-clearing frms to use any free credit balance awaiting investment or reinvestment in your account in accordance with all applicable rules and regulations and to pay interest thereon at such rate or rates and under such conditions as are established from time to time by our B/D-clearing frms.
16. Restrictions on Account
You understand that SMIA or our B/D-clearing frms may restrict or prohibit trading of securities and/or other property in your account and may terminate your account, at any time, at their sole discretion and without prior notice to you, and you shall nevertheless remain liable for all of your obligations to SMIA and our B/D-clearing frms under this Agreement or otherwise.
17. Trading in OTC Securities
SMIA may offer you the ability of trading in OTC-Bulletin Board and Pink Sheet (collectively “OTCBB”) securities in your account. If you engage in trading OTCBB securities, you acknowledge and understand the high level of investment risks associated with trading in OTCBB securities, which include but are not limited to, that
OTCBB securities may be extremely volatile because of low liquidity and/or trading volume, that transactions in these securities may trigger unexpected fees (from parties other than SMIA and that OTCBB securities have very little public information available. Furthermore, you understand that OTCBB securities have the potential to be manipulated with an intention to create artifcial demand and therefore, you should be wary of tips or advice from sources you don’t know, especially email, chat rooms or message boards.
18. Arbitration Disclosures
The arbitration agreement in the next paragraph should be read in conjunction with these disclosures:
a. All parties to this agreement are giving up the right to sue each other in court, including the right to a trial by jury except as provided by the rules of the arbitration forum in which a claim is fled;
b. Arbitration awards are generally fnal and binding; a party’s ability to have a court reverse or modify an arbitration award is very limited.
c. The ability of the parties to obtain documents, witness statements and other discovery is generally more limited in arbitration than in court proceedings;
d. The arbitrators do not have to explain the reason(s) for their award, unless in an eligible case, a joint request for an explained decision has been submitted by all parties to the panel at least 20 days prior to the frst scheduled hearing date.
e. The panel of arbitrators will typically include a minority of arbitrators who were or are afliated with the securities industry.
f. The rules of some arbitration forums may impose time limits for bringing a claim in arbitration. In some cases, a claim that is ineligible for arbitration may be brought in court.
g. The rules of the arbitration forum in which the claim is fled, and any amendments thereto, shall be incorporated into this agreement.
19. Arbitration Agreement
Any and all controversies, disputes or claims, other than collection procedures against you to recover an unsecured debit in your account, between you and SMIA or you and SMIA’s clearing frm or you and SMIA and its clearing frm and/or their respective agents, representatives, employees, directors, ofcers or control persons arising out of, in connection with, from or with respect to (a) any provisions of or the validity of this agreement or any related agreements, (b) the relationship of the parties hereto, or (c) any controversy arising out of SMIA’s business, its clearing frm’s business, or your accounts, shall be conducted pursuant to the code of arbitration procedure of FINRA. Arbitration must be commenced by service of a written demand for arbitration or a
written notice of intention to arbitrate. The decision and award of the arbitrator(s) shall be conclusive and binding upon all parties, and any judgment upon any award rendered may be entered in a court having jurisdiction thereof, and neither party shall oppose such entry. You expressly agree that, if you lose an arbitration against SMIA or our B/D-clearing frms, you will promptly reimburse SMIA and our B/D-clearing frms for all fees and costs incurred in defense of your claim, including without limitation, SMIA personnel time at the rate of four hundred and ffty dollars per person per hour, FINRA fees, legal fees, witness fees, and travel costs and expenses. For purposes of this paragraph, the word “lose” shall mean any outcome other than an award in your favor for the sum total of your claim(s). You agree that if you do not reimburse accordingly, you will be deemed to be indebted to SMIA, and SMIA may fle a claim against you in a forum of its choice to enforce reimbursement.
No person shall bring a putative or certifed class action to arbitration, nor seek to enforce any pre-dispute arbitration agreement against any person who has initiated in court a putative class action, or who is a member of a putative class who has not opted out of the class with respect to any claims encompassed by the putative class action until:
1.the class certifcation is denied;
2.the class is decertifed; or
3.the customer is excluded from the class by the court.
Such forbearance to enforce an agreement to arbitrate shall not constitute a waiver of any rights under this Agreement except to the extent stated herein.
If you are not residing in the United States at the time of any controversy between you and SMIA or our B/D-clearing frms subject to this arbitration agreement, you agree with and shall comply with the provisions discussed above and the following additional provisions: (1) you agree that the rules of the organization administering the arbitration, namely FINRA, specifcally provides for the designation of the venue where the arbitration is to take place; (2) you agree to the personal jurisdiction of the courts of the State of New York to interpret and enforce any and all of these arbitration provisions and (3) you agree that all arbitrations shall be held in the English language, unless otherwise agreed to by the parties.
20. Information Providers and Market Data
You understand that each participating national securities exchange or association, any organization, including any electronic communications network, whether incorporated or not, or any other supplier of market data (collectively, “Information Providers”) has a proprietary interest in all of the market data it furnishes to the parties that disseminate the data. You also understand that neither SMIA nor any Information Providers guarantee the timeliness, sequence, accuracy, completeness or reliability of market data or any other market information disseminated to or by any party. You understand that SMIA, its third party providers, including the Licensor, and the Information Providers do not warrant that the service will be uninterrupted or error free. You further understand and agree that any Information Providers may discontinue disseminating any market
data or change or eliminate any transmission method at any time and that you will not hold any Information Providers liable for any loss or damages that may result. You agree that your use of SMIA, any of its services, including online services, or any software provided is at your sole risk. The SMIA service is provided on an “as is”, “as available” basis, without warranties of any kind, either express or implied, including, without limitation, those of merchantability or ftness for a particular purpose, other than those warranties which are implied by and incapable of exclusion, restriction or modifcation under the laws applicable to this Agreement.
You agree not to hold SMIA, its third party providers, including the Licensor, or any Information Providers liable in any way to you or to any other person and you shall indemnify and hold harmless SMIA, its third party providers, including the Licensor, and any Information Providers for (1) any inaccuracy of, error or delay in, or omission of (a) any such data, information or message or (b) the transmission or delivery of any such data, information or message or (2) any loss or damage arising from or occasioned by
(a)any such inaccuracy, error, delay or omission, (b) non-performance, or (c) interruption in any such data, information or message, due either to any negligent act or omission by SMIA, its third party providers, including the Licensor, or any Information Providers or to any “force majeure” (e.g., food, extraordinary weather condition, earthquake or other act of God, fre, war, insurrection, riot, terrorist act, labor dispute, accident, action of government, communications, power failure, equipment or software malfunction) or any other cause beyond the reasonable control of SMIA, its third party providers, including the Licensor, or any Information Providers. You understand that third party providers, including the Licensor and Information Providers may enforce the terms of this Agreement directly against you. You will use any market data, including real-time
quotes, only for your individual use and you will not provide such market data to any person or entity.
21. Responsibilities and Limitation of Liability
You acknowledge that you are the sole and exclusive owner and the only authorized user of your Account Number, User Name and Password (collectively, “Password”), which provides access to your account at SMIA. You understand that you shall accept full responsibility for the use, protection and confdentiality of the Password as well as for all transactions and information changes entered into your account using the Password.
You accept full responsibility for the monitoring and safeguarding of your account. You understand that you shall immediately notify SMIA in writing if: (1) you become aware of any loss, theft or unauthorized use of your Password; (2) you place an order through SMIA and you fail to receive an accurate indication of the order or of its execution; (3) you fail to receive an accurate written confrmation (whether through hard copy or electronic means) of an execution; (4) you receive a confrmation of an order and/or execution which you did not place; or (5) you receive any inaccurate information in your account balances, securities positions or transaction history.
If you fail to notify SMIA immediately upon your knowledge when any of the above situations occur, neither SMIA nor any of its ofcers, directors, employees, agents, afliates, subsidiaries or third party providers, including the Licensor will have any
responsibility or liability to you or to any other person for any claims with respect to the handling, mishandling or loss of any order.
You agree that should you experience any problems in reaching SMIA through any particular method, you will attempt to use alternative methods to communicate with SMIA.
You acknowledge that SMIA and the Licensor have reserved the right to suspend service or deny access to the system without prior notice to you during scheduled or unscheduled system maintenance, repairs or upgrades. You agree that SMIA and its afliates and our B/D-clearing frms and its afliates and their respective ofcers, directors, agents and employees, under no circumstances, including negligence, or anyone else involved in creating, producing, delivering or managing any of SMIA’s systems, including the Licensor shall be liable for any consequential, incidental, special, or indirect damages (including lost profts, trading losses and damages) that result from inconvenience, delay or loss of the use of the service even if SMIA or such other person has been advised of the possibility of such damages. These exclusions or limitations of liability will not apply to the extent that any applicable statute prohibits such exclusion or limitation of liability.
You agree that the use and protection of any information, including but not limited to, the Password, transaction history, portfolio information, account balances and any other information or orders available on your personal computer is your sole responsibility and at your own risk. You are responsible for providing and maintaining the communications equipment (including personal computers and modems) and
telephone or alternative services required for accessing and using SMIA’s website or related systems, and for all communications service fees and charges incurred by you in accessing the SMIA website or related systems.
22. Recording Telephone Conversations and Electronic Communications
You agree that for the protection of both you and SMIA, and as a tool to correct misunderstandings, SMIA, at its discretion and without further prior notice to you, may, but is not obligated to, monitor and record any of your telephone conversations or electronic communications conducted with SMIA or any of its employees or agents. SMIA has the sole right to determine how long tape recordings will be retained and such determination shall not in any way affect any party’s rights.
23. Losses Due to Extraordinary Events
SMIA and our B/D-clearing frms and their afliates and their respective ofcers, directors, agents and employees, are not responsible and you agree not to hold SMIA and our B/D-clearing frms and their afliates and their respective ofcers, directors, agents and employees, liable for losses caused directly or indirectly by conditions beyond their control, including but not limited to, food, extraordinary weather condition, earthquake or other act of God, fre, war, insurrection, riot, terrorist act, labor dispute, accident, action of government, communications, power failure, equipment or software malfunction.
24. Power of Attorney
You agree and hereby irrevocably appoint SMIA, with full power as your true and lawful attorney-in-fact, to the full extent permitted by law, for the purpose of carrying out the provisions of this Agreement and taking any action and executing any instrument that SMIA deems necessary or advisable to accomplish the purpose of this Agreement.
25. Control or Restricted Securities
Prior to placing an order in connection with the sale or transfer of any securities subject to Rule 144, or 145(d) under the Securities Act of 1933, as amended, you agree to advise SMIA of the legal status of such securities and to promptly furnish SMIA with the necessary information and documents (including opinions of legal counsel, if requested) to clear legal transfer. Further, you agree that even if the necessary documents are furnished in a timely manner, there may be delays with the processing of such securities and SMIA, at its sole discretion, may require that such securities not be sold or transferred until they clear legal transfer. You are responsible for all costs associated with compliance or failure to comply with all the requirements of Rules 144 and 145(d). If you transact a security that is restricted, SMIA may cover the position and the resulting loss, if any, will be debited to your account. Should there be a proft on the transaction, you agree that you are not entitled to such proft.
26. Your Responsibility for Understanding Certain Securities
Certain securities may grant the holder thereof valuable rights that may expire unless the holder takes action. These securities include, but are not limited to, warrants, stock purchase rights, convertible securities, bonds and securities subject to a tender or
exchange offer. You understand that you are responsible for knowing the rights and terms of all securities in your account and for taking action to realize the value of your securities. Neither SMIA nor its clearing frm is obligated to notify you of any upcoming expiration or redemption dates, or to take any other action on your behalf, without specifc instructions from you, except as required by law and all applicable rules of regulatory authorities. However, if any such security is about to expire worthless; be redeemed, exchanged, converted, tendered or exercised; or remain at a value signifcantly less than the value you would have received if you had given SMIA or our B/D-clearing frms specifc instructions, and they have not received instructions from you, SMIA or our B/D-clearing frms may, at their discretion, but are not obligated, sell, redeem, exchange, tender, convert or exercise the security for your account. You will be charged any applicable fees and/or charges for any such transaction.
Furthermore, you are responsible for knowing about reorganizations related to securities which you hold, including but not limited to, symbol changes, stock splits and reverse stock splits. Neither SMIA nor its clearing frm is obligated to notify you of any such symbol change or reorganization. If, due to a reorganization, you sell more shares of a security than you own, or if you become otherwise exposed to risk requiring SMIA or our B/D-clearing frms to take market action in your account, you acknowledge that neither SMIA nor our B/D-clearing frms will be responsible for any decrease in the value of your securities or for any other losses you may incur. If, due to a symbol change, you are not able to sell, or buy to cover, securities in your account, you must call SMIA. SMIA will, on a best efforts basis, attempt to place the trade for you. You accept that there will be a delay in entering the order for you and acknowledge that neither SMIA nor our
B/D-clearing frms will be responsible for any decrease in the value of your securities or for any other losses you may incur.
27. Cancellation Requests; Late and Corrected Reports
You understand that when you place a request to cancel an order, the cancellation of that order is not guaranteed. Market orders are subject to immediate execution and your order will only be cancelled if your request to cancel is received in the marketplace and matched up with your order prior the execution of your order. You understand that during market hours, it is rarely possible to cancel your market order. You shall not assume that any order has been executed or cancelled until you have received a transaction confrmation from SMIA or our B/D-clearing frms via electronic mail, the website or the mail. Also, please be aware that SMIA and our B/D-clearing frms, from time to time, receive late reports from exchanges and market makers reporting the status of transactions. Accordingly, you understand and agree that the status of orders that were previously unreported to you or reported to you as being expired, cancelled or executed, may be changed in response to such late reports in order to refect what actually occurred in the marketplace with respect to such orders.
28. Delivery of Securities
Without abrogating any of SMIA’s or our B/D-clearing frms’s rights under any other portion of this Agreement and subject to any of your indebtedness to SMIA or our B/D-clearing frms, you are entitled, upon appropriate demand and upon paying any applicable fees, to receive physical delivery of fully paid securities in your account. If
your periodic account statement indicates that securities were forwarded to you and you have not received them, you should notify SMIA immediately.
29. Restrictions and Termination of SMIA Services
You understand that SMIA may, at any time for any reason and without prior notice to you, prohibit or restrict your access to the use of the SMIA website or related services and your ability to trade. You may close your SMIA account at anytime by giving it written notice. SMIA or our B/D-clearing frms may terminate your account at any time for any reason and without prior notice to you. Closing an account or terminating services will not affect rights and obligations incurred prior to closure or termination. If you place orders for possible execution outside of core market hours, you understand and agree to bear the added risk of not being able to reach SMIA by phone before 9 AM and after 5 PM. You agree not to hold SMIA or our B/D-clearing frms responsible for associated losses, should any occur.
30. Disclosures to Issuers
Under Rule 14b-1(b)(3) promulgated under the Securities Exchange Act of 1934, as amended, SMIA is required to disclose to an issuer the name, address and position of its customers who are benefcial owners of that issuer’s securities unless you object. You understand that unless you notify SMIA of such objection in writing, SMIA will make such disclosures to issuers.
31. Disclosure of Professionals
You agree to promptly notify SMIA in writing if you are now or if you become: (a) registered or qualifed with the Securities Exchange Commission, the Commodities Futures Trading Commission, any state securities agency, any securities exchange or association, or any commodities or futures contract market or association; (b) engaged as a “registered investment adviser” within the meaning of Section 201(11) of the Investment Advisors Act of 1940 (whether or not registered or qualifed under that act); or (c) employed by a bank or other organization exempt from registration under federal and/or state securities laws to perform functions that would require you to be so registered or qualifed if you were to perform such functions for an organization not so exempt. If you are a professional for the purpose of quote usage, you agree to pay for quotes at the professional rate required by each Exchange. If you do not tell us your are a professional or if you tell us you are not but we or an Exchange later determine you are, you agree to pay us or the Exchange at the professional rate for all the months you were categorized as a non professional, plus all associated fees, fnes and penalties, even if such determination is made after you have closed your account. You shall be deemed to be indebted to us if you do not immediately pay us and we may institute collection proceedings against you for such amount, which we may deem, in our sole discretion, to be a negative balance in your account.
32. Dividends, Interest, and Subscription Rights
SMIA or our B/D-clearing frms will receive dividends or interest on your behalf, and will credit your account on or shortly after the payable dates. You will be notifed of any
subscription rights received by SMIA or our B/D-clearing frms for your account. Should dividends be required to be paid out of your account because you held a short position, your account will be debited only on the payable date and your account balance will refect a lower balance to the extent of such dividend only on the payable date, not prior. You alone are responsible for having enough cash available in your account to pay such dividends.
33. Order Staging
Order staging is offered on an “as-is” best efforts basis. Auto-staged orders are not a recommendation of a particular investment or strategy by SMIA. SMIA does not endorse any newsletter publishers or signal providers, nor do we monitor their performance. This is solely your responsibility. You are not required to enter an order simply because it is auto-staged. And you may enter an order even if it is not auto-staged. The decision as to which order to enter is solely yours. Please check all staged orders to make sure they contain the required parameters before you send them to market. Staged orders are believed to be correctly entered pursuant to your publisher’s recommendation, but it is ultimately your responsibility to check all elements of an order before sending to market to make sure they are correct.
34. Trading Authority
If you were referred to us by an investment advisor, you hereby authorize and appoint your investment advisor as your authorized agent and attorney-in-fact (hereafter “Authorized Agent”) for the purchase and sale of securities and other fnancial
instruments in cash or on margin in your name or number on our books and those of our B/D-clearing frms. The Authorized Agent may act on behalf of and without notice to you to buy, sell, sell short and to otherwise trade stocks, options and or any other securities, fnancial contracts or fnancial instruments. The actions of the Authorized Agent(s) have the same force and effect as those of the account owner(s) with respect to such transactions, and SMIA and its clearing frm are authorized to follow such actions as if directly instructed by you. The Customer Agreement (including arbitration of disputes), established between SMIA and you shall apply equally to the Authorized Agent.
If this is a fduciary account, you agree that this grant of trading authority has been conferred consistent with your fduciary duties and powers. If the Authorized Agent receives compensation for its order entry activities from the Account Owner, both you and the Authorized Agent represent that such payments are consistent with the laws of your respective countries. You understand that all transactions conducted by the Authorized Agent are at your sole risk. You hereby ratify and confrm any and all transactions made at any time by the Authorized Agent for your account. Accordingly, you hereby agree to indemnify and hold harmless SMIA, its clearing frm and their ofcers, directors, employees and other associated persons from any and all losses arising from violations of this Agreement, and to promptly pay on demand any debit balance due on your account.
35. Entire Agreement, Amendment, and Waiver
This Agreement, as amended, together with all other written agreements between you and SMIA or our B/D-clearing frms related to your account and terms contained on
statements and confrmations sent to you, contains the entire understanding between you and SMIA, our B/D-clearing frms, their associates, afliates, and third party providers concerning the subject matter of this Agreement. You agree that SMIA may at any time amend this Agreement, by modifying or rescinding any of its existing provisions or conditions or by adding any new provision or condition, by conspicuously posting notice of such modifcation or amendment on the SMIA website or upon written notice to you. You agree that all rights regarding your account held by SMIA’s clearing frm are automatically vested with all of SMIA’s clearing frms. By not closing your account or by continuing to use your account, you confrm your agreement to abide by this Agreement, as amended from time to time. Except as specifcally permitted in this Agreement, no provision of this Agreement can be, nor is deemed to be, waived, altered, modifed or amended unless agreed to in writing signed by an authorized ofcer of SMIA. SMIA’s or our B/D-clearing frms’s failure to insist, at any time, upon strict compliance with this Agreement or with any other course or conduct on its part shall not constitute or be construed as a waiver by SMIA or our B/D-clearing frms of any of their rights or privileges under this Agreement.
36. Separability
If any provision of this Agreement is found to be or should become invalid or unenforceable by reason of any law, rule, administrative order or judicial decision, that determination shall not affect the validity of the remaining provisions of this Agreement and all other provisions will remain in full force.
37. Governing Law
You hereby agree that this Agreement and all the duties, rights, responsibilities and other legal matters arising between you, your estate, heirs, executors, administrators, personal representatives, successors and assigns and SMIA shall be governed by the law of the State of New York and shall be construed, and the rights and liabilities of the parties determined, in accordance with the law of the State of New York.
38. Headings
The heading of each provision of this Agreement is for descriptive purposes only and shall not be deemed to modify or qualify any of the rights or obligations set forth in each such provision.