Policies and
Disclosures
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Business Continuity Plan
Craig-Hallum Capital Group LLC 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 – If after a significant business disruption you cannot contact us as you usually do at 800.752.1476 or 612.334.6300, you should go to our web site at craig-hallum.com/chwp. If you cannot access us through either of those means, you should contact our clearing firm, National Financial Services LLC, at 800.801.9942 or at their website at https://clearingcustody.fidelity.com for instructions on how it may provide prompt access to funds and securities, enter orders and process other trade-related, cash, and security transfer transactions.
Our Business Continuity Plan – We plan to quickly recover and resume business operations after a significant business disruption and respond by safeguarding our employees and property, making a financial and operational assessment, protecting the firm’s books and records, and allowing our customers to transact business. In short, 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 backup 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, bank and counter-party impact; regulatory reporting; and assuring our customers prompt access to their funds and securities if we are unable to continue our business.
Our clearing firm, National Financial Services LLC, backs up our important customer account related 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 been advised by our clearing firm that its objective is to restore its own operations and be able to complete existing transactions and accept new transactions and payments within the same business day. 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, we will transfer our operations to an operable local site or sites when needed and expect to recover and resume business within the same business day. In a disruption affecting our business district, city, or region, we will transfer our operations to a site outside of the affected area and recover and resume business within one business day. In either situation, we plan to continue in business, transfer operations to our clearing firm if necessary, and notify you through our web site or our customer emergency number, 800.752.1476 how to contact us. If the significant business disruption is so severe that it prevents us from remaining in business, we will assure our customers prompt access to their funds and securities.
Privacy Notice
Craig-Hallum Capital Group, LLC is providing you this notice in accordance with the federal financial privacy Law.
PROTECTING INFORMATION ABOUT YOU FROM MARKETERS
Craig-Hallum Capital Group, LLC does not sell or otherwise share any personally identifiable information about the customers, including former customers, (“Customer Information”) with marketers.
MAKING THE SECURITY OF INFORMATION A PRIORITY
Keeping financial information secure is one of our most important responsibilities. We maintain physical, electronic and procedural safeguards to protect Customer Information. Employees are authorized to access Customer Information only when they need it to provide you products and services or to maintain your accounts. Our employees are bound by a code of ethics that requires confidential treatment of Customer Information and are subject to disciplinary action if they fail to follow this code.
COLLECTING INFORMATION
We collect and use various types of information to service your accounts, save you time and money and better understand your needs. The Customer Information we collect is defined as the following five types:
- Application Information – Information, such as your assets, income, and debts which you provide to us on applications and through other means.
- Transaction and Experience Information – Information about your transactions and account experience, such as your account balances or transaction history; or information about any communication between us.
- Consumer Report Information – Information from a consumer report, such as your creditworthiness or credit history.
- Information from Outside Sources – Information from other outside sources regarding their employment, credit and other relationship with you or verifying representations made by you, such as your employment history or loan and credit card balances.
- Other General Information – Information, such as demographics not assembled or used for the purpose pf determining your eligibility for any product or service.
MANAGING INFORMATION WITH COMPANIES THAT WORK FOR US
We may share any of the five types of Customer Information outlined above with companies that work for us. All companies that act on our behalf are contractually obligated to keep the information we provide to them confidential and use the Customer Information we share only to provide the services we ask them to perform for you and us. These companies may include our clearing firm, financial service providers such as payment processing companies, and non-financial companies such as check printing and data processing companies. These companies might assist us, for example, in fulfilling your service requests, processing your transactions and mailing account statements. For purposes of Subsection 314(b) of the USAPATRIOT Act, we have notified the Department of the Treasury, Financial Crimes Enforcement Network that we may engage in the sharing of information with other financial institutions as permitted by that subsection.
DISCLOSING INFORMATION IN OTHER SITUATIONS
We may also disclose any of the five types of Customer Information to credit bureaus and similar organizations, and otherwise when required or permitted by law. For example, Customer Information may be disclosed in connection with a subpoena or similar legal process, a fraud investigation, an audit or examination. Through the normal course of doing business, including servicing your accounts and better serving your financial needs, we will continue to share transaction and account experience information, as well as other general information among our companies. We may also share any of the five types of Customer Information outside Craig-Hallum Capital Group, LLC if we have your consent.
KEEPING UP TO DATE WITH OUR PRIVACY POLICY
Craig-Hallum Capital Group, LLC will provide notice of our privacy policy annually, as long as you maintain as ongoing relationship with us.
Trading Disclosures
Rule 605 Report
June, 2024 – No Covered Orders
July, 2024 – No Covered Orders
Aug, 2024 – No Covered Orders
Sept, 2024 – No Covered Orders
Oct, 2024 – No Covered Orders
Nov, 2024 – No Covered Orders
Dec, 2024 – No Covered Orders
Jan, 2025 – No Covered Orders
Feb, 2025 – No Covered Orders
Mar, 2025 – No Covered Orders
April, 2025 – No Covered Orders
May, 2025 – No Covered Orders
June, 2025 – No Covered Orders
July, 2025 – No Covered Orders
Aug, 2025 – No Covered Orders
Sept, 2025 – No Covered Orders
Oct, 2025 – No Covered Orders
Nov, 2025 – No Covered Orders
Dec, 2025 – No Covered Orders
Payment for Order Flow and Best Execution
Craig-Hallum Capital Group, LLC (CHLM) is required by Securities and Exchange Commission rules to inform you upon account opening and on an annual basis thereafter of our policy regarding the receipt of “payment for order flow” from various third parties in connection with the routing of customer orders for execution. Those rules define payment for order flow as “any monetary payment, service, property, or other benefit that results in remuneration, compensation or consideration to a broker or dealer from any broker or dealer, national securities exchange, registered securities association or exchange member in return for the routing of customer orders by such broker or dealer to any broker or dealer, national securities exchange, registered securities association or exchange member for execution, including but not limited to: research, clearance, custody, products or services; reciprocal agreements for the provision of order flow; adjustment of a broker or dealer’s unfavorable trading errors; offers to participate as an underwriter in public offerings; stock loans or shared interest accrued thereon; discounts, rebates, or any other reductions of or credits against any fee to, or expense or other financial obligation of, the broker or dealer routing a customer order that exceeds that fee, expense or financial obligation.” CHLM does not route its customers’ orders to any execution venue for the purpose of obtaining payment for order flow. However, CHLM does receive rebates for providing liquidity to various execution venues which, under the above stated regulatory definition of the term, could be deemed payment for order flow.
CHLM has the obligation, and makes every effort, to execute its customers’ orders at the most favorable terms possible under the facts and circumstances surrounding each customer order. In addition, CHLM will seek to provide price improvement on its customers’ orders whenever such opportunities are reasonably available.
CHLM is a registered market maker in many Nasdaq and NYSE listed securities and due to such status may internalize the execution of nondirected customer orders in such securities. Should CHLM internalize non-directed customer orders in securities in which it makes a market, CHLM may trade as principal with such customer orders and may generate a gain or loss in its proprietary account as a result of such transactions.CHLM has, on the Policies and Disclosures section of this website, a link to information regarding the routing of customer orders per SEC Rule 606. A written copy of this SEC Rule 606 report will be furnished upon request. Also on your request, we will disclose to you the identity of the venue to which your orders were routed for execution during the six months prior to the request (certain stipulations within Rule 606(b)(3) may apply), whether the orders were directed or non-directed orders, and the time of the transactions, if any, that resulted from such orders.
Handling of Customer Orders
Absent specific instructions to the contrary, when you place an order with CHLM, you are directing that we handle your order on a “not held” basis, which means you are giving CHLM discretion to exercise our brokerage judgment to seek to obtain the best execution of your order. “Held” orders do not permit discretion in handling your order. Depending on whether your order is a market or limit order, “held” orders obligate CHLM to execute your market order immediately at the then prevailing market price or your limit order at your limit price (or better), which may not necessarily be the best price that can ultimately be obtained. Further, under the current limit order rules, “held” limit orders may often require CHLM to sell shares at the same price at which we bought them and therefore may cause us to charge a fee or commission on “held” limit orders. “Not held” orders, on the other hand, give CHLM the flexibility and discretion to act in your best interest by working your order to seek to obtain the best execution possible.
CHLM believes that by exercising appropriate judgment and discretion (i.e. on a Not Held basis) with respect to your order, it can achieve the best execution possible under the surrounding facts and circumstances. Therefore, unless you give CHLM specific instructions to treat such an order differently at the time you place the order, we will treat the order as “not held” and will work that order accordingly. We will try to use the term “not held” in taking your orders, but our omission to do so will not alter our understanding as to your order handling instructions. Please be advised that under Financial Industry Regulatory Authority (“FINRA”) rules, a “not held” order is not a priced order. Consequently, CHLM is permitted to trade for its own account at prices equal to, or better than, those of “not held” orders, and CHLM is not required to match incoming market orders with unexecuted better priced limit orders. Nevertheless, any purchases or sales by CHLM must be consistent with our efforts to provide the best execution of such orders.
Average Price Confirmations
To provide you with best execution, we will exercise our professional discretion and may work your equity order by executing it in more than one transaction during the course of a trading day, or we may aggregate your order with other orders and execute them as a block or in multiple smaller transactions.
In such cases, our policy is to provide our customers with an “average price confirmation” which summarizes the aggregate amount of securities purchased or sold and the “average price” of the executions. The confirmation will also indicate the capacity or capacities in which CHLM acted (that is, as principal, agent or dual agent) and the possibility that your order may have been aggregated with other customer orders and may have been executed in more than one market. Although the confirmation does not list the details of the individual executions and capacities, we are pleased to make such information available to you upon request.
Extended Hours Trading Risk
“Extended hours trading” means trading outside of “regular trading hours.” “Regular trading hours” generally means the time between 9:30 a.m. and 4:00 p.m. Eastern Standard Time.
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 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 trading 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, securities 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.
Customer Identification Program and the USA PATRIOT Act
The USA PATRIOT Act was enacted on October 1, 2003, to strengthen the United States government’s ability to combat terrorist financing and money laundering. An essential component of the PATRIOT Act requires financial institutions to obtain, verify and record information that identifies each person or entity with an account relationship at a financial institution.
What this means for you:
For individuals opening accounts with, we will ask for your: (i) name; (ii) residential address; (iii) date of birth; (iv) social security or other U.S. taxpayer identification number, or, if you are not a citizen or resident of the United States, a passport number and country of issuance or the number and country of issuance of any other government issued document evidencing nationality or residence and bearing a photograph; and (v) such other information or documents that we consider necessary to verify your identity. This may include a form of photo identification to verify identity.
For corporations, partnerships, trusts or other entities opening accounts we will ask for your: (i) name; (ii) address (either your principal place of business, a local office or other physical location); (iii) a U.S. taxpayer identification number, or if you are not organized or resident in the United States or filing U.S. income tax returns, the number and country of issuance of any other government-issued document certifying the existence of your organization; and (iv) such other information or documents that we consider necessary to verify your identity. Examples of additional information include articles of incorporation, a government-issued business license, a partnership agreement or a trust instrument.
The Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) requires financial institutions to conduct “Customer Due Diligence” (CDD Rule) on the “beneficial owners” of non-exempt legal entities. For legal entity customers, Craig-Hallum Capital Group, LLC may ask for additional identifying information from the legal entity customer’s beneficial owners.
Investor Education, Protection and FINRA BrokerCheck Website
Craig-Hallum Capital Group, LLC is a Member of FINRA and SIPC. BrokerCheck is a free online tool offered by FINRA designed to help investors make informed choices about their selection of brokers and brokerage firms. BrokerCheck provides information about registered and formerly registered brokers including their employment history, their investment related licensing history, regulatory action or disciplinary history, and any history regarding customer complaints or arbitrations.
A link to BrokerCheck can be found here: FINRA BrokerCheck
We are required by FINRA Conduct Rule 2280 to provide you with information about the availability of information through FINRA’s Public Disclosure Program. Consequently, please be advised that FINRA offers an investor brochure, describing the Public Disclosure Program. The investor brochure may be obtained via the FINRA Web Site (www.finra.org) or through FINRA Public Disclosure Program Hotline Number at (800) 289-9999.SIPC was created under the Securities Investor Protection Act as a non-profit membership corporation which protects against the loss of cash and securities held by a customer of a financially insolvent SIPC member brokerage firm. SIPC protection is limited, and it does not protect against the decline in value of your securities. Investments in securities are subject to fluctuations in the market and SIPC does not protect against these risks. Additional information about SIPC can be found here: https://www.sipc.org/
SEC Regulation Best Interest (Reg BI) and Form CRS
The SEC adopted Reg BI under the Securities Exchange Act of 1934 (“Exchange Act”) establishing a “best interest” standard of conduct for broker-dealers and Registered Investment Advisors (“RIAs”) and associated persons when making a recommendation of any securities transaction or investment strategy involving natural person or “retail” investor”. Reg BI imposes a standard of conduct to act in the best interest of the customer at the time an investment recommendation is made, without placing the financial or other interest of the broker-dealer, RIA, or associated person making the recommendation ahead of the interest of the customer. The SEC concurrently adopted a rule requiring each broker-dealer and RIA to provide its retail clients and file with the SEC a “Client Relationship Summary” (“Form CRS”) providing information about that broker-dealer or RIA and the way it conducts business and the fees and commissions they may charge their retail clients. Additional information about Reg BI can be found here: https://www.sec.gov/about/divisions-offices/division-trading-markets/regulation-best-interest-form-crs-related-interpretationsA link to Craig-Hallum Capital Group’s most recent Form CRS can be found here: Form CRS.