2023 Qualified Counterparty General Disclosures
Dear Valued Counterparty,
Old Mission Markets LLC (“OMM”) believes it’s necessary to make certain disclosures to you and remind you of certain SEC, FINRA, and SRO regulations and policies important to OMM.
Anti-Money Laundering Notice
OMM recognizes the importance of deterring terrorist and money laundering activities, as well as the strategic importance of protecting its reputation from exposure to illegal activities perpetrated by third parties. The Firm has, therefore, developed a policy to assist in the recognition, detection and prevention of money laundering in connection with its securities business.
OMM is committed to ensuring that its facilities are not used in any manner to support, aid or abet terrorist or criminal activity or money laundering. OMM is further committed to comply with all laws and regulations designed to combat money laundering activities, including those rules and regulations requiring broker-dealers to report transactions involving currency, certain monetary instruments and suspicious activity. Every OMM principal, employee, supervisor, and associated person plays a part in protecting the firm from money launderers and other criminal activities.
Accordingly, OMM has adopted robust procedures to ensure that it satisfies this commitment and to ensure that it complies with its statutory and regulatory obligations in this regard, including its compliance with the USA PATRIOT Act of 2001.
To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify, and record information that identifies each person or entity that opens an account.
OMM may request information and documents that will allow us to identify you, your firm and your authorized representatives. A corporation, partnership, trust or other legal entity may need to provide other information, such as its principal place of business, local office, employer identification number, certified articles of incorporation, government‐issued business license, a partnership agreement or a trust agreement.
OMM has developed and implemented a robust Business Continuity Plan (BCP) 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. Key features of the Firm’s BCP include maintenance and annual review of the following:
Operational risk involving communication with its clearing firm, counterparties, banks, regulators, and various critical business constituents.
Financial and Credit Risk involving the Firm’s ability to determine the value and liquidity of its investments and other assets to evaluate its ability to continue to fund its operations and remain in capital compliance.
Mission Critical Systems involving the processing and settlement of securities transactions.
Although no contingency plan can eliminate all risk of service interruption, OMM continually assesses and updates its BCP to mitigate all reasonable risks. As OMM continues to review the Firm’s BCP, and as conditions in our firm and the industry change, we will revise the plan accordingly and as considered necessary.
Ability to Record Telephone Conversations
OMM reserves the right to record telephone conversations at our discretion. Even though you may not hear an audible tone, OMM may record your conversations with our Firm employees for our mutual protection. Your use of the telephone means you agree to this recording policy.
Payment for Order Flow Disclosure
OMM currently has no PFOF (Payment For Order Flow) arrangements in place with exchanges, broker-dealers, dark-pool operators, or ECNs.
However, OMM may receive remuneration for directing orders to OMC or another particular broker or dealer and may route orders to market centers, including national securities exchanges, alternative trading systems, electronic communications networks, and broker-dealers that may offer credits for certain types of orders while assessing fees for other types of orders. In some cases, the credits offered by a market center may exceed the charges assessed, such that a market center may make a payment to OMM in relation to orders directed to such market center. Such remuneration, if any, is considered compensation to us. The source and amount of any compensation received on behalf of your particular order will be disclosed upon written request.
Should the Firm’s policy regarding PFOF change at any point, your firm will be informed of the arrangement(s) as soon as practicable, but no later than 90 days from the implementation of the arrangement(s).
SIPC / FINRA Disclosure
OMM is a member of the Securities Investor Protection Corporation (“SIPC”), as well as a member of FINRA (CRD# 281867). For more information regarding SIPC, please visit SIPC.org. For organizational details pertaining to OMM, please visit FINRA BrokerCheck @FINRA.org.
Certificates (Membership Required)
Rule 144A Qualified Institutional Buyer and Section 3(c)(7) Qualified Purchaser
Sophisticated Municipal Market Professional Affirmation
SEC Rule 605 – Order Execution
SEC Rule 605 of Regulation NMS requires market centers that trade National Market System (“NMS”) securities to make available to the public monthly electronic reports that include uniform statistical measures of execution quality for covered orders. All institutional client orders handled by OMM are considered “Not Held” orders, outside the scope of covered orders. As a result, OMM currently has no obligation pursuant to Rule 605.
SEC Rule 606 – Order Routing
Rule 606 requires broker-dealers that route customer orders in equities and option securities to publish quarterly reports that provide a general overview of their routing practices. In this report, the venues to which non-directed customer orders in U.S. exchange-listed equity securities and options were routed for execution must be disclosed, as well as the nature of any relationship the broker-dealer has with each venue. The purpose of this report is to provide the public with information on how broker-dealers route orders, enable the evaluation of order routing practices and foster competition among market participants. Upon request, broker-dealers also must disclose to customers the venues to which their individual orders were routed. Each customer may request a written copy of the report be mailed to them at no charge.
Material Aspects of Relationship with Route Venues
OMM is an affiliate of Exchange Member Old Mission Capital LLC (“OMC”). OMC is a registered and bona-fide market maker on multiple exchanges and ECNs. At its discretion, OMM may “internalize” non-directed institutional client orders in which OMC makes a market. OMC could sustain profits or losses by trading as principal with any internalized institutional client orders.
Reference Price Trades
Old Mission Markets LLC and its affiliates, including Old Mission Capital LLC, (collectively, “Old Mission”, or “the Firm”, or “we”) engage in principal trading and market making, where institutional client services are provided solely through Old Mission Markets LLC, an SEC-registered broker-dealer and FINRA member.
Old Mission may agree to facilitate a guaranteed reference price trade as principal at a committed price relative to an applicable reference such as VWAP, NAV, or open or closing price. Institutional order flow of this nature is generally known as GVWAPs (Guaranteed Volume Weighted Average Price), or guaranteed reference price trades. Once committed to facilitate such institutional client orders, Old Mission will likely continue to function as a bona-fide market maker in the security, trade the security as principal for risk management purposes, facilitate GVWAP orders for other institutional clients, or a variety of other reasons. Trading in this capacity creates the potential to adversely impact the subject reference price. Old Mission will make every effort to limit the level of impact from such principal trading and risk management.
Request for Quote
Institutional customers may send OMM a Request for Quote or “RFQ” to request a bid or offer on a particular security. RFQs may be received via Instant Message/Chat, telephone, or third party RFQ platform such as Bloomberg or Tradeweb. OMM’s response to an RFQ is indicative and non-binding. It is not a firm quote and reflects the price where OMM is willing but not obligated to trade.
Prohibition Against Trading Ahead of Customer Orders
FINRA Rule 5320 generally provides that a broker-dealer handling a customer order in an equity security is prohibited from trading that security for its own account at a price that would satisfy the customer order, unless the firm immediately executes the customer’s order up to the size of its own order at the same price or better. While the rule applies broadly to all types of customers and order sizes, it provides exemptions that permit broker-dealers to trade for their own account provided certain conditions are met. OMM’s market making unit engages in market making-related activities, including trading to manage risks resulting from customer facilitation and capital commitment activities. Consistent with the “no knowledge” exemption under Rule 5320, OMM has implemented internal controls, including information barriers, to prevent desks outside of its market making desk from obtaining knowledge of orders that are handled by the market making desk. FINRA Rule 5320 also permits firms to negotiate the terms and conditions on the acceptance of certain large-sized orders (orders of 10,000 shares or more and have a value of $100,000 or more) and orders from institutional accounts that would permit the broker dealer to trade ahead of or along with such orders provided that the broker-dealer provides clear and comprehensive written disclosure at account opening and annually thereafter. Additionally, the broker-dealer is required to provide its institutional accounts with the opportunity to opt in to the Rule 5320 protections with respect to all or a portion of its order(s). You may opt in to Rule 5320 protection by notifying your OMM Sales Trader. Orders may be opted-in to Rule 5320 protection on a blanket or order-by order basis. If you do not opt in to the Rule 5320 protections with respect to all or a portion of the order(s), OMM may reasonably conclude that you have consented to the Firm trading a security on the same side of the market for its own account at a price that would satisfy your order. Even when a customer has opted in to the FINRA Rule 5320 protections, OMM may still obtain consent on an order-by-order basis to trade ahead of or along with an institutional customer order.
FINRA Rule 5270 Disclosure – Block Orders
FINRA Rule 5270 prohibits a broker-dealer from buying or selling a security or a “related financial instrument” for its own account when that member has material, non-public information concerning an imminent block transaction in that security, a related financial instrument or a security underlying the related financial instrument prior to the time information concerning the block transaction has been made publicly available, or has otherwise become stale or obsolete. However, Rule 5270 permits certain exceptions, one of which allows a broker-dealer to trade for its own account when transactions are undertaken to fulfill or facilitate the execution of the customer block order (including hedging or block positioning). For example if a client requests that OMM execute a Reference Price Trade, OMM will often establish a hedge through a single or multiple purchase (sale) transactions order to offset the risks associated with facilitating the Reference Price Order. OMM will often establish the hedge before it executes (fills) the client’s Reference Price Order, and the hedge will usually involve transacting as principal in the same security. However, it may also involve transacting as principal in related derivative and/or financial instruments (e.g., standardized options, futures, exchange traded funds, fixed income securities). See “Reference Price Trades” above for additional detail regarding reference price trades.
Net Trading Disclosure
For institutional customers that do not pay a disclosed commission for executed “not held” orders, OMM may execute such “not held” orders on a “net” basis. When executing “not held” orders on a “net” basis, OMM will accumulate a position in a principal account to fill your order and then execute your order at a price that is above its average accumulation cost in the case of a buy order, or below its average accumulation cost in the case of a sell order. The difference between OMM’s average cost to accumulate a position to fill your “not held” order and the price reported to you and the consolidated tape is compensation to OMM for the execution of your order. Details regarding the individual executions used to fill your order(s) are available upon request.
Privacy Notice / Policy
OMM considers the security of the information our institutional clients provide to us to be of critical importance. In order to provide institutional brokerage services and maintain compliance with securities regulations, OMM may receive certain personal, non-public information from its clients from the following sources:
Information OMM receives from its clients on agreements, applications or other forms during the onboarding and annual ‘refresh’ process
Information regarding customer transactions with other firms or with OMM
OMM may use the personal, non-public information that the Firm collects to provide services to its institutional clients. In doing so, OMM may share such information with certain employees, agents, and affiliates. OMM restricts access of personal, non-public information to those employees, agents and affiliates who need to know that information in order to provide products and/or services to OMM clients.
To protect clients’ personal non-public information OMM maintains physical, electronic, and procedural safeguards. For example:
OMM does not sell or license information about OMM clients to third parties, nor do we sell our client e-mail addresses to third party marketers.
OMM maintains strict employment policies that prohibit employees who have access to personal non-public information from using or disclosing such information except for business purposes.
Only authorized OMM personnel or “Informed Persons”, can access the Firm’s relevant systems.
OMM does not disclose personal, non-public information to any parties that are not affiliated with OMM, except as required by law or upon request by exchange or other self-regulatory organization rules. OMM will only disclose or report such information where necessary to authorize, effect, administer, or enforce transactions that clients request or authorize in order to: maintain and administer clients’ accounts, provide clients with transaction confirmations, statements and records; maintain appropriate archive records; where OMM believes that disclosure is required by applicable law, rules or regulations to cooperate with law enforcement, or regulatory or self-regulatory organizations enforce client and other agreements, meet our obligations to third party service providers, or to protect OMM’s rights and property.
Options Risk Disclosure
Options involve significant risk and are not suitable for all investors. Prior to buying or selling an option, all OMM institutional clients must receive a copy of the Characteristics and Risks of Standardized Options, located at the following web address:
Additionally, copies of this document are available upon written request to Compliance@oldmissioncapital.com, or from any exchange on which options are traded.
Buy-in Cost Recovery
The costs of delayed delivery may be handled in different ways by both regional and international stock exchanges. Additionally, the rules applied by a central counterparty may differ from those of the regional stock exchanges.
A change of depository or different types of custody for individual securities may prevent prompt delivery by a counterparty in the settlement of a transaction. As a consequence, your firm/clearing firm may not be in a position to fulfill your own delivery obligations on time. In other words, the compliant coverage of the securities due to the failure to execute delivery at the local stock exchange or depository institution may indeed exceed the total value of the quoted order/trade.
Old Mission passes on all costs to the firm in such cases. If Old Mission’s clearing agent or any other institution involved in settlement charges in arrears for changes in ownership, buy-ins, stamp duty, or any other related charge, Old Mission requires a full refund of any outlays in this regard. Such charges may be levied against the institutional client without warning, even after long periods of time have elapsed.
Modern Slavery and Human Trafficking Policy
Provided upon request.
Reliance on International Dealer Exemption (the “Exemption”) pursuant to subsection 8.18(2) of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (“NI 31-103”) and Notification to Permitted Clients of the prescribed information under subsection 8.18(4)(b) of NI 31-103
This disclosure is in connection with your transactions with, and relevant services offered by or through, Old Mission Markets LLC (“OMM”). Please note that as you are a client domiciled in Canada, when OMM trades with you it does so in reliance upon the Exemption from the dealer registration requirement under NI 31-103 (as such Exemption may be amended and restated from time to time). Pursuant to the Exemption, OMM is subject to trading restrictions, including, among other things, that OMM is only permitted to trade “foreign securities” with “permitted clients” (as defined in NI 31-103) resident in Canada. A foreign security is a security issued by an issuer incorporated, formed, or created under the laws of a foreign (i.e., non Canadian) jurisdiction or a security issued by a government of a foreign jurisdiction. This serves to put you on notice that you should only place orders with OMM for foreign securities in accordance with the Exemption.
Please also note that:
- OMM is not registered as a dealer in any Canadian province or territory;
- The jurisdiction of OMM’s head office or principal place of business is Chicago, Illinois, United States;
- All or substantially all of OMM’s assets may be situated outside of Canada; and
- There may be difficulty enforcing legal rights against OMM in the local jurisdiction listed below.
Please see below the name and address of the agent for service of process for OMM in Canada:
Canada – Ontario
CT Corporation System (Canada), Ltd.
2 Queen Street East, Suite 1500
Toronto, Ontario MSC 3G5
Institutional Client Complaints
Any Institutional Client who wishes to lodge a complaint related to the order handling activities of any current or former OMM employee may do so in the following manner:
Mail a complaint to:
Old Mission Markets LLC
1 North Dearborn St., 8th floor
Chicago, IL 60602
Contact OMM Compliance: