Notices & Disclosures

Wolverine Execution Services, LLC (“WEX” or the “Firm”) is a registered broker with the Securities and Exchange Commission (“SEC”) as well as several self-regulatory organizations, including the Financial Industry Regulatory Authority (“FINRA”). As a client, we would like to provide you with some important disclosures as required by our regulatory authorities as well as certain policies and procedures WEX has adopted as part of our business practices. Please note that this document is provided for informational purposes only and is meant to apply to multiple aspects of the Firm’s business. Therefore, not every disclosure will be applicable to every WEX client receiving this notice. WEX may amend the notices and disclosures herein as needed. Any such amendments shall be available on the Firm’s website (www.tradewex.com).

Anti-Money Laundering Notification

To help the government fight the funding of terrorism and money laundering activities, Federal law requires financial institutions to obtain, verify, and record information that identifies each person who handles transactions on behalf of others. Upon applying for the services of the Firm, WEX is required to collect (at a minimum) the following information from its clients:

• Client Name

• Date of Birth

• Address

• Identification number, such as:

  • Taxpayer identification number (social security number or employer identification number) for U.S. citizens; or

  • Taxpayer identification number, passport number, and country of issuance, alien identification card number, or government-issued identification showing nationality, residence, and photograph for non-U.S.citizens

Clients may also be asked to show driver’s licenses, corporate documentation, or other identifying documents. A corporation, partnership, trust, or other legal entity may need to provide information such as its principal place of business, local office, employer identification number, certified articles of incorporation, government-issued business license, partnership agreement, or trust agreement, and identification of principal owners and control persons. Institutional clients may be asked to provide information relating to traders authorized to place orders on the clients’ behalf.

Business Continuity Plan

WEX developed its Business Continuity Plan (“BCP”) to provide reasonable assurance that WEX can maintain business continuity in the event that there are disruptions of normal business operations. The plan anticipates various types of potential disruptions to ensure that the Firm can react in an appropriate and timely manner. However, no contingency plan provides absolute assurance that an interruption will not occur or that a disruption of normal operations will result from a disruptive event. WEX may periodically update the plan in an effort to maintain as comprehensive of a plan as possible.

WEX provides agency execution services only. Accordingly, the Firm’s plan focuses on identifying potential risks that may inhibit the Firm’s ability to provide execution services and implement the processes that are to be followed in order to reestablish business operations. The plan details actions and alternatives for the Firm’s systems, networking, applications, market data feeds, vital records, regulatory reports, relocation sites, and employee tasks.

Should there be a serious business disruption, WEX clients are encouraged to access information via the WEX website (www.tradewex.com) or contact us at (888) 313-0664 for further information.

Characteristics and Risks of Standardized Options Disclosure Document

Prior to buying or selling an option, investors must be provided with a copy of the Options Disclosure Document (“ODD”), which explains the characteristics and risks of exchange-traded options. WEX encourages all of its clients to read the full ODD and any related supplements. A copy of the most recent ODD, which includes all supplements, may be found on The Options Clearing Corporation website at: https://www.theocc.com/company-information/documents-and-archives/options-disclosure-document. Please note that a Supplement to the ODD was released in March 2023.

A copy of the ODD may be obtained from WEX upon request. If you have any questions, please contact us at sales@tradewex.com.

Compliance with Short Sale and Order Marking Requirements.

WEX reminds its clients of their responsibility to mark orders properly when sending them to WEX for execution. Where applicable, clients must receive a locate or pre-borrow of stock for any sell orders marked “short,” and comply with long/short order marking provisions of Regulation SHO and all other relevant exchange and SEC rules, regulations, or related orders.

Similarly, clients must mark all terms of their options orders correctly, which includes using the proper order origin code for each order. This includes, but is not limited to, the correct marking of professional customer orders, or orders for any client that had an average of more than 390 orders per day during any month of the prior calendar quarter. Further information about this requirement may be found, among other places, in ISE Regulatory Circulars 2014-007, 2011-011, and 2009-06, available at www.nasdaqtrader.com.

Available Order Routing Information

Pursuant to SEC Rule 606, WEX makes available a summary of all “non-directed orders” for NMS securities and relationships with trading venues and provides this summary to the public through our website: www.tradewex.com. Additionally and upon request, WEX will make available to any client the identity of the venue(s) to which the client’s orders were routed for execution during the previous six months. Requests for this information must be made in writing or submitted electronically to 606_Reports@tradewex.com and should include specific details regarding the trades or orders in question.

Affiliate Relationships

WEX is an indirect subsidiary of Wolverine Holdings, L.P., which owns several trading and investment entities under common control, some of which execute orders on a principal basis, as a specialist or market maker, in equity securities, options and futures.

Wolverine Trading LLC (“WT”) is an affiliated broker-dealer and registered market maker or specialist on U.S. options and equity exchanges. WEX frequently sources liquidity for certain client orders in stocks or options directly from WT by using exchange price improvement auctions and other mechanisms (collectively, “PIMs”), as well as using manual or electronic quote requests, electronic order routing, or by routing client orders to exchanges on which WT has a higher likelihood of trading with the order. WT’s trading decisions are made in an effort to maximize its profitability. When routing to exchanges, WEX often uses order types that preference WT. Because WT stands to profit by trading as principal with or against WEX client orders, WEX has an incentive to seek executions with WT over other exchange participants when doing so is otherwise consistent with its best execution obligations.

Payment for Order Flow

WEX receives order flow payments, or “rebates,” as well as fee discounts, in varying amounts from U.S. equity and option exchanges and also from U.S. options specialists and/or market makers pursuant to the exchange-sponsored marketing fee programs, which have been adopted by the exchanges and approved by the SEC. In many cases these rebates are netted against fees charged by the exchanges for order executions and other services. The net rebate (if any, after exchange fees) for any given order varies depending on several factors including, but not limited to, the security, the bid/ask spread, the size of the order, its marketability, and whether the order takes or provides liquidity. In many cases these rebates or fee discounts are tiered, meaning that WEX has a financial incentive to send more order flow to that exchange. In some cases, the rebates or fee discounts are based on aggregated volume of both WEX and its affiliate WT. During any given month or quarter, the net value of rebates received will fluctuate depending upon the total number of eligible shares or option contracts executed at the various exchanges and the rebated rates offered by those exchanges and/or other liquidity providers. WEX receives the net rebates after month or quarter end, after the settlement of trades. Depending on each client’s negotiated agreement with WEX, it will keep or pass on to its clients the fees or rebates associated with the executions. In addition, affiliates of WEX hold equity interests in entities that directly or indirectly own or operate certain options exchanges. Accordingly, WEX and its affiliates stand to benefit, indirectly, from the profits that each of these exchanges derive from executing routed orders.

WEX uses many different criteria in making order routing decisions. If multiple exchanges are quoting at the National Best Bid and Offer (“NBBO”) for an order and WEX has discretion as to where to route the order (or a portion of it), WEX will route the order to the venue which the Firm believes will deliver the best execution. WEX considers the fees charged and rebates paid by exchanges in considering which exchanges it believes will deliver the best execution, including for clients for which WEX does not directly pass on fees and rebates to those clients. In certain circumstances, this routing decision will result in the order being sent to a preferred venue from which WEX receives payment. WEX preferences certain options orders to WT, and to third party market makers for execution. As described further in this notice, for some orders WEX can receive remuneration from an unaffiliated broker-dealer in consideration of such broker-dealer’s willingness to interact with a given order.

Privacy Policy

WEX considers the security of the information our clients provide to us to be of the utmost importance. In order to provide brokerage services and maintain compliance with securities regulations, WEX receives certain personal, non-public information from its clients from the following sources:

• Information WEX receives from its clients on applications or other forms, and

• Information about client transactions with others or with WEX.

WEX uses the personal, non-public information that the Firm collects to provide services to its clients, which includes qualifying clients for trading various products and using the services available through the WEX system. The information also sometimes is necessary to execute and confirm transactions executed by WEX on behalf of its clients. In doing so, WEX shares such information with employees, agents, and affiliates. WEX restricts access to 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 WEX clients.

To protect clients’ personal non-public information, WEX maintains physical, electronic, and procedural safeguards. For example:

• WEX does not sell or license information about WEX clients to third parties, nor do we sell our client e-mail addresses to third party marketers.

• WEX 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.

In addition, WEX’s Internet-based systems include multiple security measures.

WEX does not disclose personal, non-public information to any parties that are not affiliated with WEX, except as required by law or upon request by exchange or other self-regulatory organization rules. WEX 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 WEX believes that disclosure is required or permitted 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 WEX’s rights and property.

If you decide to terminate your access or become an inactive client, WEX will adhere to the Privacy Policy and practices as described in this notice.

Solicitation of Other Parties

When handling an order of 500 contracts or more on your behalf, WEX may solicit other parties to execute against your order and may thereafter execute your order using the Chicago Board Options Exchange’s (“Cboe’s”) AON AIM Solicitation Mechanism. This functionality provides a single-priced execution, unless the order results in price improvement for the entire quantity, in which case multiple prices may result. For further details on the operation of this mechanism, please refer to Cboe Rule 5.39, which is available at http://www.cboe.com/aboutcboe/legal-regulatory.

When handling an order of 500 contracts or more on your behalf, WEX may solicit other parties to execute against your order and may thereafter execute your order using the Nasdaq International Securities Exchange’s (“ISE’s”) Solicited Order Mechanism. This functionality provides a single-price execution only, so that your entire order may receive a better price after being exposed to the Exchange’s participants, but will not receive partial price improvement. For further details on the operation of this Mechanism, please refer to Section 11(d) of the ISE Rules, which is available at https://listingcenter.nasdaq.com/rulebook/ise/rules.

Tied Hedge Orders

When handling an option order of 500 contracts or more on behalf of a client, WEX may buy or sell a hedging stock, security futures, or futures position following receipt of the option order, but prior to announcing the option order to the trading crowd. The option order may thereafter be executed using the Cboe’s tied hedge procedures. These procedures permit the option order and hedging position to be presented for execution as a net-priced package subject to certain requirements. For further details on the operation of the procedures, please refer to Cboe Rule 5.87.10, which is available at http://www.cboe.com/aboutcboe/legal-regulatory.

Execution of Block Orders

When executing block transactions on behalf of its clients, WEX can source liquidity from a number of providers, including, but not limited to WT, in an effort to improve execution quality. Such liquidity providers can engage in hedging or other transactions to fulfill or facilitate the execution of the client’s order, which will occur prior to or at the same time as the execution of the client’s order(s). The purpose of these transactions will be to attempt to source liquidity for WEX’s client at the best reasonably available terms, including price, speed of execution, and minimization of market impact.

Penny Stocks

Generally, penny stocks are low-priced shares of small companies that are not traded on an exchange or quoted on Nasdaq. Penny stocks generally are traded over-the-counter, such as on the OTC Bulletin Board or Pink Sheets, and are historically more volatile and less liquid than other equities. For these and other reasons, penny stocks are considered speculative investments and customers who trade in penny stocks should be prepared for the possibility that they may lose their entire investment, or an amount in excess of their investment if they purchased penny stocks on margin. Before investing in a penny stock, you should thoroughly review the company issuing the penny stock. In addition, you should be aware of certain specific risks associated with trading in penny stocks.

There are a number of risks associated with trading penny stocks, including but not limited to the following:

• You Can Lose All or Much of Your Investment Trading Penny Stocks. All investments involve risk, but penny stocks are among the most risky and are generally not appropriate for investors with low risk tolerance. Many penny stock companies are new and do not have a proven track record. Some penny stock companies have no assets, operations or revenues. Others have products and services that are still in development or have yet to be tested in the market. Penny stock companies therefore have a greater risk of failure and those who invest in penny stocks have a greater risk that they may lose some or all of their investment.

• Lack of Publicly Available Information. Most large, publicly-traded companies file periodic reports with the SEC that provide information relating to the company's assets, liabilities and performance over time. In addition, these companies provide their financial information and operational results online. In contrast, information about penny stock companies can be extremely difficult to find, making them more likely to be the subject of an investment fraud scheme and making it less likely that quoted prices in the market will be based on full and complete information about the company.

• No Minimum Listing Standards. Companies that offer shares of their stock on exchanges can be subject to stringent listing standards that require the company to have a minimum amount of net assets and shareholders. Most penny stock companies do not list their shares on exchanges and are not subject to these minimum standards.

• Risk of Lower Liquidity. Liquidity refers to the ability of market participants to buy and sell securities. Generally, the more demand there is for a particular security, the greater the liquidity for that security. Greater liquidity makes it easier for investors to buy or sell securities, so investors are more likely to receive a competitive price for securities purchased or sold if the security is more liquid. Penny stocks are often traded infrequently and have lower liquidity. You may therefore have difficulty selling penny stocks once you own them. Moreover, because it may be difficult to find quotations for certain penny stocks, they may be difficult, or even impossible, to accurately price.

• Risk of Higher Volatility. Volatility refers to changes in price that securities undergo when they are being traded. Generally, the higher the volatility of a security, the greater its price swings. Due to their lower liquidity, penny stocks are subject to greater volatility and price swings. A customer order to purchase or sell a penny stock may not execute or may execute at a substantially different price than the prices quoted in the market at the time the order was placed. In addition, the market price of any penny stock shares you obtain can vary significantly over time.

• Penny Stocks Can Be Subject to Scams. Penny stocks are frequent vehicles for scams and/or market manipulation due to their generally lower prices and less stringent listing requirements. You should be wary of advertisements, unsolicited e-mails, newsletters, blogs or other promotional reports that emphasize the potential for large profits in penny stocks generally or certain penny stocks. These promotional materials are often used to manipulate or "pump up" the price of penny stocks before selling a large volume of shares. Customers are therefore strongly encouraged to do their own due diligence with respect to any penny stock company they invest in and to not rely on any outside promotional reports or newsletters.

Further information concerning penny stocks and the risks involved in trading them is available on the SEC's website at http://www.sec.gov/investor/pubs/microcapstock.htm.

Execution Quality

When handling orders on your behalf, WEX will take all reasonable steps to seek the best possible execution based on the specific instructions of each order. WEX’s best execution obligations are separate and independent from any best execution obligations that its clients owe to their customers. While WEX has a general duty of best execution on the orders it handles and executes, it has not accepted from its clients the delegation of any of their own best execution obligations, nor has WEX agreed to guarantee any of the best execution obligations of its clients. WEX applies pre-trade checks to all orders that it receives and, in its discretion, can reject any order back to a client. Unless a client has instructed WEX to route its order to one or more designated exchanges (i.e., a directed order), when making a determination regarding how best to fill an order, the Firm will consider a variety of factors, including but not limited to price, the need for timely execution, the liquidity of the relevant market, the size of the order, the trading characteristics of the security involved, the costs paid or rebates received by WEX, and the willingness of WT to interact with the routed order(s). The Firm attempts to seek best execution by filling an order in the over-the-counter market, by routing orders on your behalf to market centers, including national securities exchanges, alternative trading systems, electronic communications networks, and other broker-dealers.

The Firm will always consider all specific instructions provided on an order. However, all orders directed to the Firm’s algorithms, smart order router, and trading applets are treated as not held orders. In the absence of express instructions from a client, all orders routed to WEX will be deemed not held, and the Firm will exercise its own discretion based on its professional expertise with regard to the execution of the order, which can include the timing, execution venue, and/or pricing of any such orders. Designating the orders as not held allows WEX in certain cases to seek additional price improvement that likely would not be available if WEX immediately executed the orders, or to “work” orders so as to avoid adverse market impact. However, there is always the possibility that the market could move away from an order while WEX is attempting to “work” that order.

Order size is a key factor when determining how to achieve best execution for an order. Because there is typically a correlation between the size of an order and its impact on the execution price of a security, orders in large size and/or less liquid products may not be filled at the quotes displayed by market data services (which typically apply only to orders of a limited size), or can be worked over a period of time so as to not exert undue pressure on the price of the security in question. WEX clients and its brokers have the ability to work large orders using WEX’s suite of routes and algorithms that each have unique order handling characteristics. Please see tradewex.com for more information about WEX algorithms.

WEX can use available exchange-provided functionality, including various order types, exchange auction mechanisms, attributed orders, and preferenced orders, in addition to soliciting requests for quotes from one or more affiliated or unaffiliated market makers in order to provide best execution and, when available, price improvement relative to the published markets. In some instances, WEX will solicit WT or other unaffiliated broker-dealers to provide liquidity for orders routed to WEX. Absent a specific written agreement with a client, WEX is not obligated to route any client order to PIMs or to provide price improvement to any client order.

WEX clients can select from a number of order routing and execution options, based on each client’s needs and preferences. A brief description of the currently available services follows:

1. Electronic Order Routing

    WEX clients can license the Firm’s proprietary WEX Trading Platform (“WTP”) in order to direct the routing of their orders to a number of liquidity providers and market centers. The WTP offers functionality for clients to enter orders in equities, options and futures. Clients may choose to utilize functionality which, based on user-determined parameters, permits trading in spreads and/or baskets as well as automated hedging and volatility trading.

2. Desk & Trading Floor

    WEX clients may submit orders via phone and/or email to brokers on the Firm’s upstairs agency trading desk or on various options exchange trading floors. WEX brokers can solicit one or more affiliated or unaffiliated liquidity providers in order to seek to obtain the best price for any such order(s).

3. FIX Connection

    WEX clients may enter orders via a third-party front-end application in order to route such orders via FIX connection to multiple dynamic proprietary algorithms offered by the Firm. These applications will route orders in equities, options, and futures based on the needs and preferences communicated to WEX by each individual client, including, but not limited to, minimization of fees, minimizing market impact and price slippage, immediacy of order execution, market volatility, user-provided option delta, and time-weighted average price (“TWAP”) or volume-weighted average price (“VWAP”) functionality.

4. Orders Purchased by WEX

    WEX purchases orders from broker-dealers that aggregate individual orders from their end-clients, which is a type of payment for order flow that allows those broker-dealers to offer lower commission prices and enhanced services to the end-clients. For these purchased orders, WEX usually solicits contra-side interest from one or more broker-dealers, which can provide liquidity for the purchased order through a Request for Quotation (“RFQ”) process. This solicitation is typically of WT. If WT is willing to interact with an order and gives an eligible contra-side order to WEX, WEX can submit a paired order for both the initiating broker-dealer client and WT to an options exchange PIM, where additional price improvement can be received from exchange member auction participants. The exchange auction mechanisms and the associated price improvement they can provide typically are only available for paired orders, and would not be available except through using the RFQ process. For certain option classes, WEX can solicit an unaffiliated broker-dealer, in an attempt to source liquidity on a confidential basis if WEX reasonably believes that superior execution quality can be obtained. If the unaffiliated broker-dealer is willing to interact with an order, WEX can submit a paired order for both the initiating broker-dealer client and the unaffiliated broker-dealer to an options exchange auction mechanism, where additional price improvement can be received from exchange member auction participants. Any such paired order will be routed on a confidential basis via automated means in order to avoid information leakage. In such instances, WEX typically receives remuneration from such unaffiliated broker-dealer in consideration of such broker-dealer’s willingness to interact with a given order. WEX does not exercise discretion over whether WT or the unaffiliated broker-dealer is willing to provide liquidity for a WEX client order or the price at which such liquidity provider is willing to interact. This willingness depends on many factors, including, but not limited to: WT’s existing inventory positions, risk appetite, market conditions, the particular client and its execution preferences and economics, its theoretical value calculation for the option, and can change with or without notice. When WEX pairs an order, it will do so at the NBBO or better, and the ultimate execution price for the order will be determined by the exchange auction process (which will often be different from the solicited broker-dealers theoretical value calculation). The determination of whether and to what extent WEX will route client orders to any exchange PIM is in WEX’s discretion, but, other factors being equal, WEX typically will route a paired order to the exchange suggested by the market-making firm with which WEX is pairing the order. An interaction between WEX and an unaffiliated broker-dealer, as described above, is contingent upon WEX’s determination that such broker-dealer has the means to provide superior execution quality in a given option class as well as procedures in place that are reasonably designed to prevent information leakage. WEX regularly monitors and compares execution quality for orders paired with WT or unaffiliated broker-dealers and will adjust its routing practices for various option classes in order to seek superior execution quality consistently for its clients.

    For orders where WEX does not submit a paired order to an auction, such option orders are routed to a one or more U.S. option exchanges using a variety of methods where such orders can post to or trade in the exchange’s displayed order book or other exchange system. Some of these routing methods include routing the order to an exchange that is quoting at the national best bid or offer (“NBBO”). If more than one exchange is quoting at the NBBO, WEX will generally attempt to route orders to exchange venues where WT has the highest likelihood of interacting with the orders. Subject to best execution considerations, WEX may route an order to an exchange that is not currently posting at the NBBO, but which may be willing to “step up” to execute the order at the NBBO (with an exchange “flash” mechanism) or induce other market participants to improve the market. Generally, WEX does this to reduce transaction costs associated with order execution on a higher cost exchange. While this can benefit the order by offering access to more size than is displayed at the exchange(s) posting at the NBBO, this can result in not obtaining an immediate execution at the prevailing market price for a marketable order, which can result in the order not executing or slippage in the order’s execution price. WEX can also display the order (including a market order) as a non-marketable limit order at a price at or inside the NBBO for a period of time, unless the order was received with a time-in-force modifier that would prohibit this routing method. WEX does this to seek price improvement for the order. While this can benefit the order by providing price improvement, it could also result in the order not obtaining an immediate execution at the prevailing market price for a marketable order, which can result in the order not executing or slippage in the order’s execution price. Finally, WEX anticipates that, in certain instances, an unaffiliated broker-dealer may solicit WEX to source liquidity in certain option classes where such broker-dealer reasonably believes that WEX may provide superior execution quality in such option classes.

    For complex orders, WEX may display an order at a price designed to elicit liquidity from market-makers who, before the order is displayed, usually have not submitted orders or published quotes for that particular complex order. In some cases, WEX will solicit liquidity for a complex order through an RFQ process from WT or a third-party market-maker. The WEX SOR does not subscribe to all exchange proprietary market data feeds for complex orders, as a result of which WEX SOR is not always be aware of complex orders or quotes that might fill a complex order.

    Subject to the requirements of relevant laws, rules, and regulations, a written specific agreement to the contrary, or a specific restriction imposed by WEX (e.g., an information barrier), WEX can share information regarding client orders and/or executions (i.e., symbol, size, fill price, and fill quantity) with affiliates or other liquidity providers. The recipient can use that information in connection with both their own market making activities and determining whether to provide liquidity to a WEX client order (in whole or in part), the price at which to provide liquid an order (including whether to provide price improvement) and in connection with any other trading or business. WEX shares some information about client orders with WT after execution of those orders in order to allow WT to provide enhanced price improvement opportunities to future WEX orders from that client or other clients.

5. RFQ System

    WEX’s RFQ System allows clients to solicit pre-trade RFQs from their desired pool of multiple liquidity providers, and to control the terms of those RFQs, including the time allowed to respond and whether liquidity providers must respond with a one- or two-sided market.

6. Order Types

   The following section contains a high-level description of some of the many the order types accepted by WEX. This is not a complete list. If you require more information about order types supported by WEX, please contact support@tradewex.com.

   • Not Held Orders:

     WEX accepts not held orders which allow WEX to use its discretion in the execution of the order which includes: the price, time, execution venue, and ability to execute through use of multiple “child” orders. All orders directed to a WEX algorithm, WEX trading application, or WEX broker are considered not held. Additionally, if a client order indicates the quantity of a specific security to buy or sell but leaves the time, price, or manner of execution to WEX’s discretion these orders will also be considered not held. WEX can have a trader manually handle not held orders or use an algorithm to do so. The particular manner of order handling utilized by WEX will affect the speed and price at which a particular order is executed (if at all) and presents the risk of the order not executing or slippage in the order’s execution price. However, especially for orders larger than the NBBO quote size or in illiquid options classes, allowing WEX to “work” an order on a not held basis permits WEX to seek to minimize the market impact of the order.

   • Other Orders:

     Smart Router Orders: Orders sent to WEX for execution via its options smart order router are considered smart order router orders (“SOR Orders”). The WEX smart order router is designed to seek best execution for client orders. SOR Orders will be handled by WEX in a manner that include, but is not limited to: soliciting pre-trade price improvement from WT or another unaffiliated market maker, routing paired orders to exchange auction mechanisms, taking liquidity on exchanges, posting nonmarketable limit orders at prices superior to a parent order's limit price in order to attract contra-side liquidity, or otherwise working orders on an automated basis in the marketplace in order to seek the best terms available for each order. The precise handling of a SOR Order depends on the options class, the size of the order, market conditions, exchange fees and rebates, and the perceived likelihood of finding contra-side liquidity, among other factors. The effort to achieve price improvement for SOR Orders at times can result in not obtaining an immediate execution at the prevailing market price for a marketable order, which can result in the order not executing or slippage in the order’s execution price. However, especially for orders at or below the NBBO quote size, WEX’s experience is that using SOR Orders achieves on average the best overall execution quality, considering both speed of execution and possibility of price improvement.

   • Directed Orders:

     Clients that route orders to WEX’s electronic trading platform have the ability to specify material terms of an order, which, in some instances, includes giving the client a choice of the specific destination to which the orders will be routed. In these circumstances WEX will not exercise discretion over the routing of the order and will route the order to the market center specified by its client without modifying the terms of the order. Sending a directed order can provide prompt execution, although it does not prevent the possibility of an order that was marketable when entered not being executed, especially in a fast-moving market, but it significantly limits WEX’s ability to seek price improvement for that order.

   • Day Orders:

     WEX accepts day orders, which are eligible for execution only during regular trading hours (generally 9:30 a.m. to 4:00 p.m., ET). WEX will cancel those day orders that are unexecuted at the close of the regular trading session of the subject option’s listing exchange. In the absence of specific time-in-force instructions, client orders generally will be considered and handled as day orders.

   • Good-Till-Cancel (“GTC”) Orders and Good-Till-Date (“GTD”) Orders:

     WEX accepts GTC orders, which remain open until the earlier of their full execution and their cancellation by the client. WEX also accepts GTD orders, which remain open until the earlier of their full execution, their cancellation by the client, and the end of regular trading hours on the date specified by the client.

     GTC and GTD orders sent to WEX are executable only during regular trading hours. WEX maintains its own open order book, and generally does not leave displayed orders representing GTC or GTD orders with exchanges overnight. If any displayed orders are open at the end of the regular trading session for the particular options exchange, WEX will generally cancel the displayed order and resubmit it at the beginning of the next trading day, with such cancellation potentially resulting in the order losing its queue priority at the applicable exchange.

Erroneous Trades

If the SEC, FINRA, an SRO, or any other regulatory body having jurisdiction over WEX determines that a previously-executed transaction is erroneous and, accordingly, should be adjusted or cancelled, WEX will be required to adjust or cancel, as applicable, that transaction and will be unable to honor the execution price or any other terms of that transaction.

WEX clients are responsible for the timely identification of potentially obvious error transactions to WEX. If a particular transaction contains an obvious error in the execution of its terms and also satisfies certain numerical thresholds contained in the applicable SRO clearly erroneous rules, a client may request WEX submit an obvious error filing on the client’s behalf, seeking to break the transaction. Any client request for WEX to submit an obvious error filing must be received in writing by WEX within ten minutes of the applicable filing deadline (generally, within 15 or 30 minutes of the transaction’s execution) to allow WEX adequate time to complete and submit the required filing. Notwithstanding the foregoing, WEX reserves the right to refuse to submit an obvious error filing at its sole and absolute discretion.

Pre- or Post-Market Session Trading

Pursuant to FINRA Rule 2265 and related exchange rules, all member firms must disclose to their customers any inherent risks should they choose to conduct trading activities outside of normal market hours, and that each customer should consider the following:

• Risk of Lower Liquidity. Liquidity refers to the ability of market participants to buy and sell securities. Generally, the more orders that are available in a market, the greater the liquidity. Liquidity is important because with greater liquidity it is easier for investors to buy or sell securities, and as a result, investors are more likely to pay or receive a competitive price for securities purchased or sold. There may be lower liquidity in extended hours trading as compared to regular market hours. As a result, your order may only be partially executed, or not at all.

• Risk of Higher Volatility. Volatility refers to the changes in price that securities undergo when trading. Generally, the higher the volatility of a security, the greater its price swings. There may be greater volatility in extended hours trading than in regular market hours. As a result, your order may only be partially executed, or not at all, or you may receive an inferior price in extended hours trading than you would during regular market hours.

• Risk of Changing Prices. The prices of securities traded in extended hours trading may not reflect the prices either at the end of regular market hours, or upon the opening of the next morning. As a result, you may receive an inferior price in extended hours trading than you would during regular market hours.

• Risk of Unlinked Markets. Depending on the extended hours trading system or the time of day, the prices displayed on a particular extended hours system may not reflect the prices in other concurrently operating extended hours trading systems dealing in the same securities. Accordingly, you may receive an inferior price in one extended hours trading system than you would in another extended hours trading system.

• Risk of News Announcements. Normally, issuers make news announcements that may affect the price of their securities after regular market hours. Similarly, important financial information is frequently announced outside of regular market hours. In extended hours trading, these announcements may occur during trading, and if combined with lower liquidity and higher volatility, may cause an exaggerated and unsustainable effect on the price of a security.

• Risk of Wider Spreads. The spread refers to the difference in price between what you can buy a security for and what you can sell it for. Lower liquidity and higher volatility in extended hours trading may result in wider than normal spreads for a particular security.

• Risk of Lack of Calculation or Dissemination of Underlying Index Value or Intraday Indicative Value (IIV). For certain Derivative Securities Products, an updated underlying index value or IIV may not be calculated or publicly disseminated in extended trading hours. Since the underlying index value and IIV are not calculated or widely disseminated during the pre-market and post-market sessions an investor who is unable to calculate implied values for certain Derivative Securities Products in those sessions may be at a disadvantage to market professionals.

Investor Education and Protection

FINRA Rule 2267 requires WEX to provide the following information to its clients once every calendar year in writing (which may be in electronic format):

• FINRA BrokerCheck and Hotline Number: FINRA makes available information regarding its Member Firms, including WEX, and the professional background and history of the registered personnel employed by the Firm. Such information can be obtained, at no charge, by accessing BrokerCheck directly online at https://brokercheck.finra.org. Investors may also inquire about the BrokerCheck services by calling FINRA's hotline at (800) 289-9999 (Monday through Friday from 8 a.m. to 8 p.m., ET).

• FINRA Web site address: www.finra.org.

• FINRA Brochure: An investor brochure that includes information describing FINRA BrokerCheck may be found at: https://www.finra.org/sites/default/files/InvestorDocument/p009888.pdf.

WEX is a member of the Securities Investor Protection Corporation (“SIPC”). Clients may obtain information about SIPC, including the SIPC brochure, by contacting SIPC via phone at (202) 371-8300 or e-mail at asksipc@sipc.org or by visiting the SIPC website at www.sipc.org.

WEX is required to inform its clients about the National Futures Association’s (“NFA”) Background Affiliation Status Information Center (“BASIC”), which contains Commodity Futures Trading Commission (“CFTC”) registration and NFA membership information and futures-related regulatory and non-regulatory actions contributed by NFA, the CFTC and the U.S. futures exchanges. BASIC is available at http://www.nfa.futures.org/basicnet/welcome.aspx.

Should you have any questions regarding the materials provided by this notice, please contact us at sales@tradewex.com.

Complaints

Should you have a complaint regarding WEX, including, but not limited to, any employee of the Firm or services you have received, please direct such complaint to:

Wolverine Execution Services, LLC
Attn: Compliance and Legal Department
175 W. Jackson Blvd., Suite 200
Chicago, IL 60604
compliance@tradewex.com
(312) 884-4000

Thank you for your continued business.