(2) AML Requirements
(3) Day-Trading Risk Disclosure Statement
(4) Margin Disclosure Statement
(5) Order Routing Information (11Ac1-6)
(6) JPR Capital’s Privacy Policy
(7) Additional Notifications
| • | The national securities markets are extremely efficient and competitive. Successful Electronic Day Trading typically requires skill and discipline as well as experience and knowledge of the capital markets. There is no guarantee that you will be successful in implementing your investment strategy. A substantial number of Electronic Day Traders will not be successful. Moreover, changes in market structure and competitive conditions also may affect your continued success. Only risk capital should be used for trading. Market structure and competitive changes in the markets may cause formerly successful traders to become less successful. |
| • | Electronic Day Trading involves a high volume of trading activity the number of transactions in an account may exceed 100 per day. Each trade generates a commission and the total daily commission on such a high volume of trading can be in excess of any earnings. |
| • | Persons who are new to Electronic Day trading should strictly limit both the number of trades they do and the size of their trades to reduce the risk of large dollar losses during the learning process.( |
| • | Electronic Day Trading is designed to produce short-term profits. However, the activity also may result in losses that can exceed more than 100% of your initial capital. You are solely responsible for any losses in your account. |
| • | Placing contingent orders, such as "stop-loss" or "stop-limit" orders, will not necessarily limit your losses to the intended amounts, since market conditions on the NASDAQ or any Alternative Trading System on which the order is placed may make it impossible to execute such orders. Similarly, using "market orders" can be very risky, since large gaps can occur in price movements of active stocks. You are urged in most instances to use "limit orders." |
| • | Under certain market conditions, you may find it difficult or impossible to liquidate a position quickly at a reasonable price. This can occur, for example, when the market for a stock suddenly drops, or if trading is halted due to recent news events or unusual trading activity. The more volatile a stock is, the greater the likelihood that problems may be encountered in executing a transaction. |
| • | In addition to normal market risks, you may experience losses due to system failures. The firm and its clearing broker rely upon sophisticated computer software and hardware to execute transactions, which are subject to failure due to a variety of factors. In addition, NASDAQ and the Alternative Trading Systems have computer systems that often malfunction. Among other events, you may experience losses due to: system crashes during both peak and low volume periods; the loss of orders on both SOES and Select Net; and, delayed, conflicting and inaccurate confirmations on orders or cancellations that you initiate. |
| • | The use of any margin or leverage in an account can work against you as well as for you. Leverage can lead to large losses as well as gains. You may sustain a total loss of the initial margin funds and any additional funds that you deposit with your broker to establish or maintain a position, and you may incur losses beyond your initial investment. If the market moves against your position, you may be called upon to deposit a substantial amount of additional margin funds, on short notice, in order to maintain your position. If you do not provide the required funds within the time required, your position may be liquidated at a loss, and you will be liable for any resulting deficit in your account. |
| • | You should consult your broker concerning the nature of the protections available to safeguard funds or property deposited in your account. |
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 who opens an account.What this means for you: When you open an account, we will ask for your name, address, date of birth and other information that will allow us to identify you. We may also ask to see your driver's license or other identifying documents.
Day trading can be extremely risky. Day trading generally is not appropriate for someone of limited resources and limited investment or trading experience and low risk tolerance. You should be prepared to lose all of the funds that you use for day trading. In particular, you should not fund day-trading activities with retirement savings, student loans, second mortgages, emergency funds, funds set aside for purposes such as education or home ownership, or funds required to meet your living expenses. Further, certain evidence indicates that an investment of less than $50,000 will significantly impair the ability of a day trader to make a profit. Of course, an investment of $50,000 or more will in no way guarantee success.
Be cautious of claims of large profits from day trading. You should be wary of advertisements or other statements that emphasize the potential for large profits in day trading. Day trading can also lead to large and immediate financial losses.
Day trading requires knowledge of securities markets. Day trading requires in-depth knowledge of the securities markets and trading techniques and strategies. In attempting to profit through day trading, you must compete with professional, licensed traders employed by securities firms. You should have appropriate experience before engaging in day trading.
Day trading requires knowledge of a firm's operations. You should be familiar with a securities firm's business practices, including the operation of the firm's order execution systems and procedures. Under certain market conditions, you may find it difficult or impossible to liquidate a position quickly at a reasonable price. This can occur, for example, when the market for a stock suddenly drops, or if trading is halted due to recent news events or unusual trading activity. The more volatile a stock is, the greater the likelihood that problems may be encountered in executing a transaction. In addition to normal market risks, you may experience losses due to system failures.
Day trading will generate substantial commissions, even if the per trade cost is low. Day trading involves aggressive trading, and generally you will pay commissions on each trade. The total daily commissions that you pay on your trades will add to your losses or significantly reduce your earnings. For instance, assuming that a trade costs $16 and an average of 29 transactions are conducted per day, an investor would need to generate an annual profit of $111,360 just to cover commission expenses.
Day trading on margin or short selling may result in losses beyond your initial investment. When you day trade with funds borrowed from a firm or someone else, you can lose more than the funds you originally placed at risk. A decline in the value of the securities that are purchased may require you to provide additional funds to the firm to avoid the forced sale of those securities or other securities in your account. Short selling as part of your day-trading strategy also may lead to extraordinary losses, because you may have to purchase a stock at a very high price in order to cover a short position.
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 or other assets in any of your accounts held with the member, 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 or assets in your account(s). |
| • | The firm can force the sale of securities or other assets in your account(s). If the equity in your account falls below the maintenance margin requirements, or the firm's higher "house" requirements, the firm can sell the securities or other assets in any of your account held at the firm to cover the margin deficiency. You also will be responsible for any short fall in the account after such a sale. |
| • | The firm can sell your securities or other assets 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 or other assets 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 securities or other assets in your account(s) are 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 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(s). |
| • | 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. |
June 30, 2005
This report is divided into four sections: one for securities listed on the New York Stock Exchange, one for securities listed on the NASDAQ Stock Market, one for securities listed on exchanges other than the New York Stock Exchange, and one for exchange-listed options. For each section, we identify the venues most often selected by our Registered Reps and the percentage of various types of orders routed to those venues.
The information and data provided herein (the "Report") are the property of JPR Capital Corporation ("JPR Capital" or "JPR") and cannot be redistributed in any form or manner without the prior written consent of JPR Capital.
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| VENUE | TOTAL % | MARKET ORDER % | LIMIT ORDER % | ||
| N/A | N/A | N/A | N/A | ||
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| VENUE | TOTAL % | MARKET ORDER % | LIMIT ORDER % | ||
| N/A | N/A | N/A | N/A | ||
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| VENUE | TOTAL % | MARKET ORDER % | LIMIT ORDER % | ||
| ARCA | 26.61% | <1 | >99 | ||
| INET | 73.39% | <1 | >99 | ||
|
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| VENUE | TOTAL % | MARKET ORDER % | LIMIT ORDER % | ||
| N/A | N/A | N/A | N/A | ||
JPR Capital has prepared the Report solely for informational purposes and consistent with Rule 11Ac1-6 under the Securities Exchange Act of 1934. JPR Capital does not guarantee this report as to its accuracy or completeness. The information provided in this report is dependent upon the integrity and accuracy of data provided by outside sources. The Report does not endorse or recommend any particular security or market participant. These disclaimers apply to the Report in its entirety, irrespective of whether the Report is used or viewed in whole or in part.
JPR Capital does not make markets in any securities and does not accept payment for order flow.
As is required, for both legal and fiduciary reasons, we collect information from our customers. This information is obtained from the following sources:
| • | Information we receive from you on applications and other forms; |
| • | Information about your transactions with us; and |
| • | Information we receive via other contact you have with our firm. |
We do not disclose any nonpublic information about you to anyone, except as permitted by law.
If, for whatever reason, you decide to close your account or to become an inactive customer, we will adhere to the privacy policies and practices as described in this notice.
JPR Capital restricts access to your personal and account information to those employees who need to know that information to provide products or services to you. JPR Capital maintains physical, electronic, and procedural safeguards to protect your nonpublic personal information.
If you have any questions or concerns regarding JPR Capital’s privacy policy, please contact Jeff Mann at (516) 621-8787 ext.201.
ALL OF THE POINTS NOTED ABOVE APPLY TO ELECTRONIC DAY TRADING OF DOMESTIC EQUITY
SECURITIES. IF YOU ARE CONTEMPLATING TRADING FUTURES OR OPTIONS CONTRACTS,
YOU SHOULD BE AWARE THAT THESE INSTRUMENTS POSSESS ADDITIONAL RISKS.
FOR AN ELECTRONIC VERSION OF THE OCC’S RISK DISCLOSURE DOCUMENT, PLEASE
CLICK: http://www.optionsclearing.com/publications/risks/riskstoc.pdf
THE RISK OF ELECTRONIC DAY TRADING MAY BE SUBSTANTIAL. THIS BRIEF STATEMENT
CANNOT, OF COURSE, DISCLOSE ALL THE RISKS AND OTHER ASPECTS OF ELECTRONIC
TRADING.
JPR Capital: Business Continuity Planning
JPR has developed a Business Continuity Plan on how we will respond to events that significantly disrupt our business. Since the timing and impact of disasters and disruptions is unpredictable, we will have to be flexible in responding to actual events as they occur. With that in mind, we are providing you with this information on our business continuity plan.
Contacting Us - In the event of a significant business disruption, JPR will attempt to contact all our customers via e-mail and/or telephone with alternate contact information, which will also appear on our web site at www.jprcapital.com. If we cannot reach you, or you cannot reach us through any of those means, you should contact our clearing firm, Terra Nova Financial(www.terranovatrading.com) for instructions on how to ensure prompt access to funds and securities and to enter orders.
Our Business Continuity Plan - We do not anticipate a significant business disruption to affect our ability to conduct business, in any way. However, our business continuity plan is designed to permit our firm to resume operations as quickly as possible, given the scope and severity of the significant business disruption.
Our business continuity plan addresses: data back up and recovery; all mission critical systems; financial and operational assessments; alternative communications with customers, employees, and regulators; alternate physical location of employees; critical supplier, contractor and bank and regulatory reporting; and assuring our customers prompt access to their funds and securities if we are unable to continue our business.
SWS back up our important records in a geographically separate area. While every emergency situation poses unique problems based on external factors, such as time of day and the severity of the disruption, we have reviewed our clearing firm's business continuity plan and are comfortable that it can achieve its objective to restore its own operations and be able to complete existing transactions and accept new transactions and payments almost immediately.
Your orders and requests for funds and securities could be delayed during this period.
Varying Disruptions - Significant business disruptions can vary in their scope, such as only our firm, a single building housing our firm, the business district where our firm is located, the city where we are located, or the whole region. Within each of these areas, the severity of the disruption can also vary from minimal to severe. In a disruption to only our firm or a building housing our firm, or in a disruption affecting our business district, city, or region, we expect business to continue as usual, with no disruptions. In either situation, we plan to notify you through our web site or via e-mail and/or telephone how to contact us. If the significant business disruption is so severe that it prevents us from remaining in business, we will assure our customer's prompt access to their funds and securities through our clearing firm.
For more information - If you have questions about our business continuity
planning, you can contact us at jmann@jprcapital.com