Investor Alert
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Alerts October 2007
Annual Notice of Newedge USA’s Privacy
Policy
In connection with your relationship with Newedge
·
Information we receive from you on applications or
other forms, such as your name, address, social security number, assets and
income;
·
Information about your transactions with Newedge,
Newedge affiliates or other third-parties, such as that pertaining to your
account balance, account transactions, payment history and parties to
transactions; and
·
Information Newedge receives from a consumer
reporting agency, such as that pertaining to your creditworthiness and credit
history and your identity.
Newedge does not disclose nonpublic personal information about you to
anyone, except as permitted by law. Accordingly, Newedge restricts disclosure of
nonpublic personal information about you to (1) Newedge employees who need to
know that information to provide you products or services, (2) Newedge affiliates
(including, among others, Societe Generale), and (3) non-affiliated
third-parties as necessary to process your transactions, service your account
or otherwise as permitted by law. The types of nonpublic personal information
Newedge may disclose to such recipients are listed above.
If you
decide to close your account(s) or become an inactive customer, we will adhere
to the privacy policies and practices as described in this Notice. Newedge does
not sell personal nonpublic information about current or former customers to
any third-parties or share that information with third-parties for marketing
purposes.
In
short, Newedge places great importance on holding customer personal and financial
information in strict confidence. In this regard, Newedge maintains physical,
electronic and procedural safeguards to guard your personal nonpublic
information. Nonetheless, you are responsible for maintaining the accuracy and
completeness of your information. Should you need to change or correct your
account information, please contact your broker or Newedge customer service to
update the information.
If you
utilize our own or a third-party on line order routing system to access our
services, please be aware that you should never give your account number or
password to anyone. If you suspect someone has your password, change it
immediately and call your account representative at Newedge or Newedge customer
service. You are ultimately responsible for maintaining the secrecy of your
password.
This
Notice is being issued pursuant to federal statutory and regulatory
requirements, and is designed to comply fully with such provisions.
Margin
Disclosure Statement
Your
brokerage firm is furnishing this document to you to provide some basic facts
about purchasing securities on margin, and to alert you to the risks involved
with trading securities in a margin account. Before trading stocks in a margin
account, you should carefully review the margin agreement provided by your
firm. Consult your firm regarding any questions or concerns you may have with
your margin accounts.
When you
purchase securities, you may pay for the securities in full or you may borrow
part of the purchase price from your brokerage firm. If you choose to borrow
funds from your firm, you will open a margin account with the firm. The
securities purchased are the firm’s collateral for the loan to you. If the
securities in your account decline in value, so does the value of the collateral
supporting your loan, and, as a result, the firm can take action, such as issue
a margin call and/or sell securities in your account, in order to maintain the
required equity in the account.
It is
important that you fully understand the risks involved in trading securities on
margin. These risks include the following:
You can
lose more funds than you deposit in the margin account. A decline in the value
of securities that are purchased on margin may require you to provide
additional funds to the firm that has made the loan to avoid the forced sale of
those securities or other securities in your account.
The firm
can force the sale of securities in your account. If the equity in your account
falls below the maintenance margin requirements under the law, or the firm’s
higher "house" requirements, the firm can sell the securities in your
account to cover the margin deficiency. You also will be responsible for any
shortfall in the account after such a sale.
The firm
can sell your securities without contacting you. Some investors mistakenly
believe that a firm must contact them for a margin call to be valid, and that
the firm cannot liquidate securities in their accounts to meet the call unless
the firm has contacted them first. This is not the case. Most firms will
attempt to notify their customers of margin calls, but they are not required to
do so. However, even if a firm has contacted a customer and provided a specific
date by which the customer can meet a margin call, the firm can still take necessary
steps to protect its financial interests, including immediately selling the
securities without notice to the customer.
You are
not entitled to choose which security in your margin account is liquidated or
sold to meet a margin call. Because the securities are collateral for the
margin loan, the firm has the right to decide which security to sell in order
to protect its interests.
The firm
can increase its "house" maintenance margin requirements at any time
and is not required to provide you with advance written notice. These changes
in firm policy often take effect immediately and may result in the issuance of
a maintenance margin call. Your failure to satisfy the call may cause the
member to liquidate or sell securities in your account.
You are
not entitled to an extension of time on a margin call. While an extension of
time to meet margin requirements may be available to customers under certain
conditions, a customer does not have a right to the extension.
Newedge USA, LLC
Statement of Financial Condition
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All contents of the “Investor Alert”
are for educational purposes only. Any
graphics are for illustration purposes only.
Please note that options are not suitable for all investors
and investing in options carries substantial risk. Because of the importance of
tax considerations to all options transactions, investors considering options
should consult with a tax advisor as to how taxes affect the outc