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Investor Alert |
| Past Alerts Click Here | July 2007 |
| IMPORTANT: New Regulation NMS (National Market System) The U.S. Securities and Exchange Commission adopted "Reg NMS" in 2005, which is a series of historically groundbreaking initiatives designed to modernize and strengthen the national market system for equity securities. Many of the new rules go into effect on July 9, 2007. The new rules includes Rule 610, which addresses access to markets; Rule 611, which provides intermarket price priority for displayed and accessible quotations; Rule 612, which establishes minimum pricing increments; and additional amendments to plans and rules governing the dissemination of market data. (Go to the SEC Reg NMS website here.) Most relevant to Newedge USA trading clients is the "Order Protection Rule" (Rule 611) which requires trading centers to establish, maintain, and enforce policies and procedures to prevent "trade-throughs" - the execution of trades at prices inferior to protected quotations. To be protected, a quotation must be immediately and automatically accessible and be the best bid or best offer of a national securities exchange or national securities association (collectively, "self-regulatory organizations" or "SROs"). Certain NMS exemptions to the trade-through rule are not being offered by Newedge at this time. For example, if XYZ is quoted on the New York Stock Exchange at 10 bid and is also quoted on the NASDAQ Stock Exchange at 10.01 bid, the NYSE now cannot execute an incoming sell order at a price less than 10.01. The NYSE can elect to execute the sell order itself at 10.01 or forward the order to NASDAQ for execution. Please note that due to the new rules, the $9.95 routing choice will no longer be available as the market maker may have to link the orders to a national exchange or trading center and there could be substantial linkage fees. It is important that our clients understand that the Newedge PreferrredTrade system is designed to ensure your compliance with Reg NMS rules via the market providers, regardless of your routing choices. Routing Choices on PreferredTrade Version 6.3 Platform NYSE (Hybrid Market) The NYSE Hybrid MarketSM is a new market model that integrates the best aspects of the auction market with automated trading. NYSE ARCA NYSE Arca is the NYSE's Electronic Communications Network (ECN). NYSE Arca is a choice that combines the traits of current market structures with new technology. NASDAQ Offers a centralized book comprised of multiple market makers and ECN's that can be accessed electronically. Can be used for all limit, market, or marketable orders in both listed and OTC securities. AMEX Orders directed to the American Stock Exchange will be routed to the AMEX, even if the NYSE is the primary exchange for the specific stock. AUTOTRADE Orders sent via the AutoTrade route will be directed to NYSE Arca for listed stocks and to NASDAQ for OTC issues. WIZETRADE ORDERS All users of the WizeTrade or CommandTRADE software will have their orders directed to the NYSE Arca for listed stocks and to NASDAQ for OTC trades. Bulletin Board and Pink Sheet stocks are not subject to the new NMS rules and also are not eligible for most of the above automated trading centers. These orders need to be routed to AutoTrade or PT Desk. PT DESK PT Desk is worked by a trader on an agency basis, and orders are executed depending on market conditions and available liquidity as determined by the trader. This process will take more time than an order executed during the automated routing. The order is entered into its order book on the desk and worked by a Newedge USA trader. Disclaimer: PT Desk orders are executed on a not-held basis. Note that Newedge reserves the right to charge customers any related linkage fees that may be assessed by an exchange or trading center. If you have any questions on any of these routing destinations, please do not hesitate to call our customer service desk for an explanation at 888-781-0283. Notification to All Options Customers Please be aware that the booklet entitled "The Characteristics and Risks of Standardized Options" was recently amended. Newedge USA, as your options broker, is required to notify you that it now includes a June 2007 Supplement. Please review this additional supplement to the Options Disclosure Document at: http://www.theocc.com/publications/risks/riskstoc_june07_sup.pdf If, for any reason you cannot access this supplement, or "The Characteristics and Risks of Standardized Options" booklet on-line, or you would like to the booklet and or the supplement mailed to you, please contact Douglas Patterson or Steve McNulty at (888) 781-0283. 2007 IRA Fee The 2007 annual account maintenance fee of $30 for all IRA accounts was to appear on the January 2007 statement. This annual fee was not charged at that time. Therefore, the $30 annual IRA fee was charged to all pre-2007 IRA accounts on your June statement. Newedge USA, LLC Mailing: 220 Bush Street, Suite 650, San Francisco, CA 94104 Member NYSE, NASD, MSRB, NFA, SIPC and other principal exchanges Customer Service can be reached at 888-781-0283 or by email at Service@NewedgeGroup.com. Customer Service Fax is (415) 520 - 5633 Newedge USA, LLC ("Newedge"), a member of SIPC and a broker-dealer and futures commission merchant registered under US laws, makes no representations or warranty regarding the appropriateness of any transaction for any person. This sales literature is solely for informational purposes, and is not to be construed as an offer to buy or sell any security. The information herein is based on sources we believe to be reliable, but is not guaranteed by us and may be incomplete or condensed. Any opinions expressed herein are statements of Newedge's or third-party sources' as of the date indicated and are subject to change without notice. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation. All futures, securities and options trading entails significant risks, which should be fully understood prior to trading. Consult your account representative for details. Past performance is not a guarantee of future results. Except as indicated otherwise, Newedge and the Newedge Group refer to all companies or divisions of companies owned directly or indirectly by Societe Generale that include the "Newedge" name. Not all products and transactions offered by Newedge are available from all companies of the Newedge Group. The views expressed herein may differ from those expressed by affiliates of Newedge, and such views do not represent or purport to represent those of such affiliates. Newedge, or one or more of its employees, may have a position in any of the securities discussed herein, including options, rights or warrants to purchase such securities. All contents of this document are for educational purposes only. Any graphics are for illustration purposes only. Newedge USA does not offer investment advice. Date of first use: July 1, 2007. Copyright Newedge USA, LLC 2007. All rights reserved. |