Disclosures & Disclaimers
Customer Identification Program
Important Information About Procedures for Opening a New Account: To help the government fight the funding of terrorism and money laundering activities, Federal law requires DriveWealth, like 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 account, we will ask for your name, address, date of birth and other information that will allow us to identify you. We will also ask to see your driver’s license or other identifying documents.
Foreign Finder Disclosure
For accounts located outside the United States, you may have been referred to DriveWealth, LLC (“DriveWealth”) by a foreign finder, who would be receiving a fee from DriveWealth for the referral. If the referral fee changes the commission that you pay to DriveWealth, DriveWealth will provide you with the details regarding the name of the finder and the compensation arrangement. If your account was referred by a foreign finder, your trade confirmations will include disclosure of that fact. Other than the initial referral, the foreign finder has no ongoing responsibilities with respect to your account.
For accounts based in the United States, DriveWealth, LLC (“DriveWealth”) may pay a flat fee to a person or entity that referred you to DriveWealth. DriveWealth pays the referral fee to the referrer. The referral fee does not change the commission that you pay to DriveWealth. Other than the initial referral, the referrer has no ongoing responsibilities with respect to your account.
Day-Trading Risk Disclosure Statement
You should consider the following points before engaging in a day-trading strategy. For purposes of this notice, a “day-trading strategy” means an overall trading strategy characterized by the regular transmission by a customer of intra-day orders to effect both purchase and sale transactions in the same security or securities. 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. Potential Registration Requirements. Persons providing investment advice for others or managing securities accounts for others may need to register as either an “Investment Adviser” under the Investment Advisers Act of 1940 or as a “Broker” or “Dealer” under the Securities Exchange Act of 1934. Such activities may also trigger state registration requirements.
Payment for Order Flow Disclosure
Depending on the security traded, equity orders are routed to market centers (i.e., broker-dealers, primary exchanges or electronic communication networks) for execution. Routing decisions are based on a number of factors including the size of the order, the opportunity for price improvement and the quality of order executions, and decisions are regularly reviewed to ensure the duty of best execution is met. DriveWealth may receive compensation or other consideration for the placing of orders with market centers for execution, allowing it to provide customers with lower commission costs. The amount of the compensation depends on the agreement reached with each venue. The source and nature of compensation relating to the transactions will be furnished upon written request.
Remuneration for Introduction Disclosure
If you as a customer of DriveWealth request a product that DriveWealth does not offer, DriveWealth may introduce you to another broker-dealer or Forex Dealer Member. DriveWealth may receive remuneration for such introduction.
Business Continuity Plan
The DriveWealth Business Continuity Plan (BCP) is designed to enable the firm to continue to provide client services as promptly as possible in the event of a Significant Business Disruption (SBD), such as natural disasters, power outages, etc. While no plan can completely eliminate the possible risk of service interruption, the company reviews and updates the BCP on a regular basis to mitigate the risk of service interruption to the extent possible, given the scope and severity of the SBD. DriveWealth operates in dual, redundant, data center facilities located in Virginia, USA. A “warm” datacenter is also available in Oregon, USA to provide redundancy in the case of a catastrophic loss of the primary facilities. Backups are performed daily and transferred offsite to our warm datacenter facility. In order to maintain data security and defend against cyber intruders, DriveWealth employs a host of defenses and disciplines. All transactions sent to and from the data center are encrypted.
Click Here to review DriveWealth’s BCP. The plan is effective from the date approved until the date of its authorized revision, update or replacement.