J.P. Morgan Securities LLC (“JPMS”) Regulatory Disclosures – September 2018

Compliance with Applicable Laws

As a condition to JPMS’ acceptance of your instructions, you represent that you will, and undertake to, comply with and fulfill all of your obligations under applicable laws and regulations (including, in particular, those relating to short sales) and will not breach such applicable laws or regulations.

You also agree to provide us promptly with all information necessary for us to perform our obligations under applicable laws and regulations

Specific additional provisions which apply when trading on certain markets will be included on http://www.jpmorgan.com/pages/disclosures from time to time.

FINRA Rule 2266 SIPC Information

JPMS is a member of SIPC. Clients may obtain information about SIPC, including the SIPC brochure, by contacting SIPC at www.sipc.org or (202) 371-8300.

FINRA Rule 2267 Investor Education and Protection

BrokerCheck provides investors with the ability to research the professional backgrounds, business practices, and conduct of FINRA-registered brokerage firms and brokers.  In connection with this program, investors may call the BrokerCheck Hotline at (800) 289-9999, and visit the FINRA website at http://brokercheck.finra.org.  An investor brochure that includes information describing the FINRA BrokerCheck Program is available from either of these sources.

Payment for Order Flow

JPMS may pay from time to time for certain order flow in the form of discounts, rebates, reductions of fees or credits.  As a result of sending orders to certain trading centers or broker-dealers, JPMS may receive payment for order flow in the form of direct payments, discounts, rebates, reductions of fees or credits.  Under some circumstances, the amount of such remuneration may exceed the amount that JPMS is charged by such trading centers.  These practices do not alter JPMS’ policy to route customer orders to the trading center where it believes clients will receive the best execution, taking into account, among other factors, price, transaction cost, volatility, market depth, quality of service, speed, and efficiency. 

Handling of Listed Option Orders

Solicited Order Mechanism

When handling an order of 500 contracts or more on your behalf, JPMS may solicit other parties to execute against your order and may thereafter execute your order using the International Securities Exchange’s (“ISE”) 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 ISE’s participants, but will not receive partial price improvement. For further details on the operation of this Mechanism, please refer to NASDAQ ISE Rule 716(e), available at http://ise.cchwallstreet.com/tools/PlatformViewer.asp?selectednode=chp%5F1%5F1%5F6&manual=%2Fcontents%2Fise%2Fise%2Drules%2F.

Tied Hedge Orders

When handling an option order of 500 contracts or more on your behalf, JPMS 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 tied hedge procedures of the exchange on which the order is executed. 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 the exchange rules for tied hedge orders, including CBOE Rule 6.74.10, available at https://markets.cboe.com/us/options/regulation/.

Professional Customer Designation for Option Orders

In order to properly represent orders entered on exchanges, JPMS is required to indicate whether public customer orders are “Professional Orders.” To comply with this requirement, JPMS is required to review its customers’ activity on at least a quarterly basis to determine whether orders that are not for the account of a broker or dealer should be represented as Professional Orders. Under circumstances where JPMS identifies a customer who has placed an average of more than 390 orders in listed options per day during any month of a calendar quarter, JPMS will represent that customer’s orders as Professional Orders within five (5) days of the next calendar quarter. If, during a quarter, an exchange identifies a customer for which orders are not being represented as Professional Orders but that has averaged more than 390 orders per day during a month, the exchange will notify JPMS, and JPMS will be required to change the manner in which it is representing the customer’s orders within five (5) days.

Additionally, broker-dealers that route listed option orders to JPMS have an obligation to review such order flow and appropriately designate customer orders as Professional Orders.

Extended Trading Hours

Under CBOE Rule 6.1A(j), Nasdaq Rule 4631 and FINRA Rule 2265, JPMS may not accept an order from a customer for execution during extended trading hours (as defined therein) without disclosing the potential risks involved in such extended-hours trading, such as:

  1. Risk of Lower Liquidity. Liquidity refers to the ability of market participants to buy and sell securities. Generally, the more orders or quotes 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 trading hours as compared to regular trading hours, including fewer market-makers quoting during extended trading hours. As a result, your order may only be partially executed, or not at all.
  2. 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 trading hours than in regular trading hours. As a result, your order may only be partially executed, or not at all, or you may receive an inferior price in extended trading hours as compared to regular trading hours.
  3. Risk of Changing Prices. The prices of securities traded in extended trading hours may not reflect the prices either at the end of regular trading hours or upon the opening of regular trading hours the next business day. As a result, you may receive an inferior price in extended trading hours as compared to regular trading hours.
  4. Risk of News Announcements. Normally, issuers make news announcements that may affect the price of their securities after regular trading hours. Similarly, important financial information is frequently announced outside of regular trading hours. These announcements may occur during extended trading hours, and if combined with lower liquidity and higher volatility, may cause an exaggerated and unsustainable effect on the price of a security.
  5. Risk of Wider Spreads. The spread refers to the difference between the price for which you can buy a security and the price for which you can sell it. Lower liquidity and higher volatility in extended trading hours may result in wider than normal spreads for a particular security.
  6. Risk of Lack of Calculation or Dissemination of Underlying Index Value or Intraday Indicative Value (“IIV”).  Where an updated underlying index or portfolio value, or IIV, is not calculated or publicly disseminated during extended trading hours, an investor who is unable to calculate implied values for certain derivative securities products may be at a disadvantage to market professionals during extended trading hours.


Risk of Lack of Regular Trading in Securities Underlying Indexes.  Securities underlying the indexes or portfolios will not be regularly trading as they are during regular trading hours, or may not be trading at all.  This may cause prices during extended trading hours to not reflect the prices of those securities when they open for trading.


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.

Electronic Trading

JPMS offers a variety of electronic order execution services, including algorithmic trading strategies (e.g., volume-weighted average price (“VWAP”) trading strategies), smart order routing (“SOR”) technology, and alternative trading systems (JPM-X and JPB-X). One or more of these electronic order execution services may be used in the execution of your order even where you utilize the expertise of a JPMS professional.

In keeping with its regulatory obligations to maintain reasonable risk management controls, JPMS has no obligation to accept, execute, or cancel all or any part of an order that you seek to execute or cancel through JPMS.  JPMS, in its discretion, may reject all or any part of an order, whether routed to a market center for execution via JPMS-provided or sponsored access or routed to a JPMS system, desk, or trader for handling.

When an algorithmic trading strategy or SOR technology is used in the handling of  your order, the algorithmic trading strategy or SOR technology, depending on your particular trading execution objective, generally breaks your order into smaller orders over the specified time period and routes these smaller orders to one or more national securities exchange, alternative trading system, internal engine for matching against principal interest, or other venue, according to the strategy’s or technology’s imbedded routing logic (algorithmic or SOR-generated orders are referred to herein, collectively as “Algo/SOR Orders”).  With the exception of certain types of order flow and/or order instructions, Algo/SOR Orders will be routed to an internal engine for matching against principal interest, JPM-X and/or JPB-X for matching opportunities before being routed to outside venues for execution.  In addition, some users of JPMS’ trading services also have the capability to send orders directly to JPM-X (“Directed Orders”).  Customer orders routed to an internal engine for matching against principal interest, JPM-X or JPB-X are subject to JPMS’ policies and procedures regarding best execution (including the consideration given to price, transaction cost, and other factors associated with execution quality) in the same manner and to the same extent as other orders executed by JPMS on other execution venues.

Orders in JPM-X are assigned to order flow types, which are grouped into tiers, in JPMS’ sole discretion.  You may participate in more than one tier, depending upon the order flow types to which your orders are assigned.  Orders in the JPM-X order book are matched in price/tier/time priority.  This means that of two equally priced orders, the one that is in the higher priority tier will take priority regardless of the time it was submitted to the book.  The JPM-X order book is tiered based on order flow type in the following priority:

  1. Tier 1 - Institutional investor client flow accessing JPM-X via algorithms/SOR (I-1);
  2. Tier 2 - Institutional investor client flow with direct access to JPM-X (I-2);
  3. Tier 3 - Broker-dealer client flow (both agency and principal) accessing JPM-X via algorithms/SOR (I-3);
  4. Tier 4 - JPMS trading desk flow accessing JPM-X via algorithms/SOR (P-1) and internal (JPMS) electronic liquidity provider flow with direct access to JPM-X (P-2); and
  5. Tier 5 – Flow of external broker-dealers acting as electronic liquidity providers with direct access to JPM-X (I-4, also referred to as “ELP”) and flow of broker-dealers not acting as electronic liquidity providers (both agency and principal) with direct access to JPM-X (I-5).

JPM-X is designed to preserve the continuous and prompt execution of customer orders at the national best bid or offer or better, regardless of the methodology employed in executing a customer order.

Orders in JPB-X are assigned to order flow types, which are grouped into tiers, in JPMS’ sole discretion.  You may participate in more than one tier, depending upon the order flow types to which your orders are assigned.  The JPB-X order book is tiered based on order flow type in the following priority (the tier and order flow designations correspond to the designations used for JPM-X to avoid confusion on the part of JPMS clients that use both JPB-X and JPM-X):

  1. Tier 1 - Institutional investor client flow accessing JPB-X via algorithms/SOR (I-1);
  2. Tier 2 - N/A for JPB-X
  3. Tier 3 - Broker-dealer client flow (both agency and principal) accessing JPB-X via algorithms/SOR (I-3);
  4. Tier 4 - JPMS trading desk flow accessing JPB-X via algorithms/SOR (P-1); and
  5. Tier 5 - N/A/ for JPB-X.

There is no I-2, P-2, I-4 (ELP), or I-5 flow in JPB-X.

You may opt out of executing in JPM-X and/or JPB-X altogether or executing against one or more of the JPM-X or JPB-X order flow types (i.e., sub-tiers) or tiers to meet your specific trading needs. You may opt out, e.g., by connectivity session or a custom set-up through JPMS, including on an order-by-order basis. In addition, JPMS may further limit the order flow types or tiers with which an order interacts pursuant to JPMS’ best execution obligations; accordingly, you may be prevented from interacting with an order flow type or tier with which you have not opted-out of interacting.

You may opt out of having your orders routed to any venue whose quotes are not protected under Regulation NMS (which may include, e.g., an internal engine for matching against principal interest or alternative trading system (JPM-X or JPB-X, as discussed above), an electronic liquidity provider from which JPMS receives indications of interest, or another broker-dealer) by instructing your JPMS sales representative.  Orders routed to high-touch desks by default are eligible to interact with an internal engine for matching against principal interest, but orders routed to low-touch or program trading desks by default do not interact with any internal engine for matching against principal interest.  An instruction to opt out of interacting with one or more order flow types or tiers in JPM-X or JPB-X will not cause JPMS to restrict the routing of your orders to any venue by the SOR.

If you wish to opt out or in, in whole or in part, or have any questions concerning the manner in which your orders are handled by JPMS, please contact your JPMS sales representative.

Conditional Orders

JPMS’ algorithmic trading strategies generate interest (“Algorithmic Conditional Orders”) to seek liquidity in more than one destination (including JPM-X and JPB-X) simultaneously, without the risk of overfill.  In addition, certain clients of JPM-X may enter conditional orders directly into the JPM-X book (“Direct Conditional Orders”) to find potential trading interest.  These conditional orders are not represented as firm orders in the JPM-X book.  

Under circumstances where a JPMS algorithm submits an Algorithmic Conditional Order to JPM-X, and JPM-X detects a resting contra order (either a firm order or another conditional order) that matches the algorithm’s conditional order, JPM-X will send a notice (or “firm-up request”) to that algorithm, indicating the side and symbol of the contra interest.  The algorithm will then determine whether it can respond with a firm order to JPM-X to obtain an execution.  The firm-up period is typically less than two (2) seconds, and during this process, the resting contra order is committed to trade with the conditional order, meaning that the resting contra order will not be eligible to trade with any subsequent trading interest for the duration of the firm-up period.  Conditional orders submitted to venues other than JPM-X are executed in accordance with the rules of such venues.  Direct Conditional Orders function in the same manner as described above.  Conditional orders are classified in the same JPM-X tier as any firm interest relating to the same order flow type, and all existing crossing preferences determined by a user apply. Within the JPM-X book, firm orders have priority over conditional orders at a given price level, and immediate-or-cancel (“IOC”) orders  can never be executed against a conditional order, even if an IOC meets the parameters of a conditional order.  JPMS reserves the right to limit or prohibit the use of conditional order messages by users at its own discretion based on the relevant facts, including but not limited to the previous JPM-X trading history.   For example, JPMS may revoke or limit a user’s ability to submit conditional order messages if its review of the user’s JPM-X trading history indicates that the user has a low rate of responding to firm-up invitations with firm orders.

Only Algorithmic Conditional Orders, not Direct Conditional Orders, are routed to JPB-X.  Algo/SOR Orders are only routed to JPB-X as the result of a match of Algorithmic Conditional Orders.  At the end of a match period, JPB-X fills any such firm-up Algo/SOR Orders crossed by JPB-X at a VWAP calculated by JPB-X.  The match period initially will be five (5) minutes and may be adjusted periodically by JPMS at its discretion and may vary by security, size, and/or other order characteristics.

Conditional orders and firm-up requests are handled on an automated basis and are not disseminated to any other users, third-parties, or JPMS personnel outside of Electronic Client Solutions, although compliance and technology personnel for JPM-X or JPB-X may access this information for their assigned compliance or technology purposes.

You may opt out of using JPMS conditional orders altogether.  You may also opt out in part by either not permitting your algorithmic trading strategy to generate conditional orders or not allowing your resting orders to match with conditional orders in JPM-X or JPB-X.

If you wish to opt out in whole or in part or have any questions concerning conditional orders, please contact your JPMS sales representative.

For more information regarding JPM-X, including conditional order functionality, please refer to JPM-X’s Form ATS and FAQs, available at http://www.jpmorgan.com/ecs.  JPB-X’s Form ATS and FAQs are available upon request.

Guaranteed Price Orders

JPMS is dedicated to seeking best execution of your orders and providing transparency when working your orders or hedging against market risk from facilitating them. We may receive orders from you for single stocks or a basket of securities whereby we agree that JPMS will execute in a principal capacity all or a portion of the order at a guaranteed price. That price may be based on an independent benchmark such as VWAP or the official closing price for the security(s) comprising the basket. In addition, from time to time you may ask JPMS to bid on a program order with the understanding that if our bid is accepted, we will execute the program as principal on the agreed-upon terms.

Prior to the execution of a guaranteed price order or in contemplation of winning a bid, JPMS may establish a hedge through single or multiple trades that serve to offset our market risk associated with facilitating these transactions. This hedge will usually involve principal trades (possibly throughout the day) in the same security or in a related derivative instrument on the same side of the market as your order.

JPMS makes every reasonable effort to minimize the market impact of its hedging. Nevertheless, such activity may ultimately affect the agreed guaranteed benchmark price. Similarly, where JPMS does not win a bid, but engages in principal hedging activity before the bid is awarded, such activity could affect the execution price of your order with the broker-dealer that is awarded the bid. Consistent with our commitment to full transparency, we would be pleased to discuss our hedging strategies with you.

15c3-5 Market Access

SEC Rule 15c3-5 requires broker-dealers that access or provide access to exchanges or alternative trading systems to establish, document and maintain a system of risk management controls that are reasonably designed to manage the financial, regulatory and other risks in connection with market access. JPMS has developed controls that may pause or reject select orders that exceed certain pre-determined risk parameters. For certain paused orders, JPMS will determine if it is appropriate to send the orders to the market based upon a variety of factors, including, but not limited to, order size, price and volume considerations.

FINRA Rule 5270

In the normal course, JPMS accepts and facilitates customer block orders, including block orders in single stocks, baskets of securities, and derivatives. JPMS may trade principally at prices that would satisfy a customer block order where such transactions are unrelated (e.g., as a result of information barriers) to the customer block order. Under certain circumstances, JPMS may also engage in bona fide hedging or positioning activity to reduce the market risk associated with the facilitation of a customer block order. Such trading activity may impact the execution price of the customer block order. JPMS, however, will use reasonable efforts to avoid or minimize any such impact and to obtain the best possible execution for the customer block order.

If you have any questions about this matter, or wish to discuss it further, please contact your JPMS sales representative.

“Not Held” Institutional Orders

If a client designates an order for an institutional account (an “institutional order”) as “not held” or does not designate the order as “held” or “not held,” JPMS will handle the order on a “not held” basis, unless it is an IOC order routed by the client either through JPMS’ JISU technology or to interact directly with JPMS’ Central Risk Book, in which case JPMS will handle the order on a “held” basis.  If a client designates an institutional order as “held,” JPMS will reject the order, unless it is an IOC order routed by the client through JPMS’ JISU technology, in which case JPMS will handle the order on a “held” basis.

We believe that handling an institutional order on a “not held” basis allows us to “work” clients’ orders using our judgment and discretion as to the price at which, the time when, or the manner in which such orders will be represented on, exposed to, or executed by a venue to achieve a high quality execution.

We appreciate the ongoing dialogue with our clients concerning the handling of their orders.  If you have any questions, or do not wish for your orders to be handled in the above-referenced fashion, please contact your JPMS sales representative.

“Net” Trades

JPMS’ policy on “net” trades defines  “net” trades as a principal transaction in which JPMS, as a market maker or block positioner, after having received an order to buy (sell) an equity security, purchases (sells) the equity security at one price from (to) another broker-dealer or another customer and then sells to (buys from) the customer at a different price.   On occasion, JPMS, as a registered market maker or block positioner, may execute your orders as principal on a “net” basis, as described above.  In such case, the trade price reflected on the confirmation will be the net price of the trade.

If you have no objection to JPMS executing orders on a “net” basis, as described, you need not respond to this disclosure.  If you prefer that JPMS not execute your orders on a “net” basis, please contact your JPMS sales representative.

Indications of Interest

JPMS uses certain service providers to advertise indications of interest (“IOI”). Indications of interest are expressions of trading interest that contain one or more of the following elements: security name, side of the market, size, and/or price. When publishing IOIs, JPMS will adhere to the guidance issued by regulators and service providers, including the manner in which JPMS will designate an IOI as a “natural” IOI. JPMS will label an IOI as “natural” to represent interest on an agency basis (i.e., customer order in hand) or interest on a principal basis that is being or was established in connection with the facilitation of a customer order (e.g., unwinding or hedging client generated activity), including the facilitation of clients’ listed option orders and certain over-the-counter equity derivatives, or the execution of a client’s order on a riskless principal basis.

Regulation NMS Order Protection Rule

Rule 611 of Regulation NMS (“Reg NMS”) (commonly known as the Order Protection Rule) establishes intermarket price protection against trade-throughs for all NMS Stocks by requiring broker-dealers to attempt to access any better priced “protected” quotes on automated trading centers when executing at prices that would trade through those protected quotes.1

Rule 611 contains a number of exceptions, which are designed to make the rule’s intermarket price protection as efficient as possible. One of those exceptions is referred to as the Intermarket Sweep Order, or ISO exception. An ISO is a limit order for an NMS stock that is identified with an ISO designation when routed to an automated trading center and, simultaneously with the routing of that limit order, is accompanied by one or more additional limit orders (also marked as ISOs) that will execute against the protected quotations on those automated trading centers. The ISO designation alerts the receiving automated trading center that the order sender itself is executing against any better priced protected quotations at other automated trading centers.

A broker-dealer is obligated to send ISOs when the price of a transaction between the broker-dealer and a customer, or a transaction between two or more customers, is outside of the current national best bid and offer (“NBBO”) for the NMS stock. If, after sending ISOs to other automated trading centers and receiving fills/partial fills back (or receiving no response after a reasonable period of time, e.g., within 5 seconds), there are still shares of the order left to be executed, the broker-dealer can then execute the remainder at the original order price.

A trade for which the ISO exception is being used can be executed in two different ways:

(i) at the same time ISOs are routed (the “print-and-sweep” approach); or

(ii) after ISOs are routed, responses are received, and the original size of the order is reduced to reflect any fills that result from the ISO routes (the “sweep-and-print” approach).

Under the print-and-sweep approach, the broker-dealer would complete the customer’s order at the time the ISOs are routed and would take any subsequent ISO fills into its inventory. Under the sweep-and-print approach, the customer would receive the benefit of any better prices obtained by the ISOs.

In general, JPMS will adopt a “sweep-and-print” approach (as described above) when executing your orders, which means that any better-priced fills will be allocated to your order. The Equities Trading Desks, however, may use a “print-and-sweep” approach for its order flow. If you have no objection to JPMS’ decision to use a “print-and-sweep” approach to ISOs handled by the Equities Trading Desks, you need not respond to this disclosure. If you have any questions regarding this approach, please contact your JPMS sales representative.

In the event that JPMS does not receive a response to an ISO within a reasonable period of time (e.g., 5 seconds or less), JPMS can consider the ISO to be lost and any subsequent fills resulting from such lost ISOs will generally be allocated to JPMS’ account and taken into inventory.

Tick Size Pilot

JPMS rejects orders in securities placed into Test Group One, Test Group Two, or Test Group Three in the SEC's Tick Size Pilot Program if such orders have stop or limit prices that are not in 5 cent increments. All child orders in Test Group One, Test Group Two, or Test Group Three securities are priced in 5 cent increments. JPMS may route trade-at ISOs when executing orders in Test Group Three securities at the NBBO, except when JPMS is displaying the NBBO.

With respect to JPM-X’s handling of orders in Test Group Two securities, JPM-X will execute at prices in 5 cent increments or the midpoint of the NBBO; when the midpoint of the orders’ effective limits is not a 5 cent increment, the execution price will be rounded to the nearest 5 cent increment or midpoint of the NBBO, giving price improvement to the liquidity taker. With respect to JPM-X’s handling of orders in Test Group Three securities, JPM-X will only execute at the midpoint of the NBBO, even when not a 5 cent increment; primary peg orders in these securities will be rejected, as they will not be able to cross at midpoint.

FINRA Rule 5320 and Principal Trading

Rule 5320 generally prohibits a member firm that accepts and holds a customer order from trading for its own account at terms that would satisfy the customer order, unless the member immediately thereafter executes the customer order at the same or better price than it traded for its own account. Described below are certain exceptions to the Rule and an explanation of how JPMS will handle those exceptions. Please note that consistent with existing regulatory guidance, “not held” orders are outside the scope of the Rule.

Large Orders and Institutional Account Exceptions

Large orders (orders of 10,000 or more shares with a total value of $100,000 or more), and/or orders from institutional accounts (including, accounts with total assets of at least $50 million) are exempted from the requirements of Rule 5320. JPMS will generally work such orders in accordance with customer instructions. While working such orders, JPMS may trade for its own account at prices that would satisfy the customer order.

“No-Knowledge” Exception

JPMS maintains Rule 5320 internal controls known as information barriers between its trading units. The information barriers are designed to prevent one trading unit from having knowledge of customer orders held by a different trading unit. With these barriers in place, one trading unit may hold a customer order while another trading unit, including the market making trading unit, executes an order for a JPMS account that would satisfy the customer order.

Principal Trading

JPMS may execute certain of your orders on a principal basis unless you opt out of JPMS doing so.

Telephone Recording Disclosure

As part of our compliance with applicable laws and regulations, certain telephone lines in our sales and trading departments are recorded.  Please note that these recordings may be made with or without the use of a spoken warning, tone, or similar notification.

Information and Privacy Related to Access of Research through JPMS and Third Parties

Electronic access of JPMS research through J.P. Morgan Markets or other JPMS distribution outlets is subject to the information and privacy terms of the agreements governing these applications, and by accessing JPMS research through third parties such as Bloomberg, FactSet, Thomson Reuters, S&P Capital IQ, etc., you consent to the communication and disclosure on a delayed basis to JPMS (and any of its officers, agents, or employees) of all information and data in respect of your use of JPMS research on these services.

Conflicts of Interest Disclosure for ETF Transactions

JJPMS and its affiliates (collectively, “J.P. Morgan”) comprise a full-service securities firm and a commercial bank engaged in securities trading and brokerage activities, as well as providing investment banking, asset management, financing, financial advisory services and other commercial and investment banking products and services to a wide range of corporations, institutions, funds, and individuals.  J.P. Morgan acts as an investment banker, research provider, investment manager, financier, advisor, market maker, trader, prime broker, transfer agent, lender, custodian, agent and principal, and has direct or indirect interests in the global debt, equity, currency, commodity and other markets.

As a result, J.P. Morgan may have potential conflicts of interest relating to the exchange-traded fund (“ETF”) that you may purchase from or sell to us. In particular, J.P. Morgan may:

J.P. Morgan’s activities described herein could negatively affect the performance of the underlying index and/or the price at which you will be able to transact in your ETF shares in the secondary market. J.P. Morgan’s trading activities will, at times, be contrary to the trading activity of the ETF or ETF shareholders. J.P. Morgan’s economic interests (such as long or short positions in the ETF) will, at times, be inconsistent with those of the ETF and ETF shareholders. It is also possible that J.P. Morgan activities could result in substantial returns for J.P. Morgan while the value of the ETF shares declines.

Transactions Effected by Non-U.S. Affiliates

JPMS intermediates securities transactions effected by its non-U.S. affiliates for or with its U.S. clients when appropriate and in accordance with Rule 15a-6 under the Securities Exchange Act of 1934.

Alpha Capture Platforms

JPMS sales representatives communicate trade ideas to in-house and third-party alpha capture platforms (“ACPs”).

Under certain circumstances, JPMS sales representatives might deem appropriate to share trade ideas, in whole or in part, with you and other users on one or more ACPs.  As a result, trade ideas provided to you through those platforms may also be shared with other customers that participate in those platforms.  In addition, as a registered broker-dealer, JPMS reserves the right to review any trade idea submission and reject, close, or modify any such submission.

If you have any questions or to the extent that you object to the manner in which JPMS is handling the use of trade ideas that are submitted to ACPs, please contact your JPMS sales representative.

Anonymized Trading Data

JPMS may utilize certain trade information, primarily advertised and reported volume, to provide market color and trend analysis to both internal and external clients. We believe this data is sufficiently anonymized as to protect both our client identity and any strategies clients are engaged in.

Notice to Canadian Customers

Canadian securities orders from Canadian clients must be placed directly with J.P. Morgan Securities Canada Inc. (“JPMSCI”). JPMSCI is the IIROC Dealer Member affiliate of JPMS.

Confidential Information

Client and JPMSCI acknowledge and agree that information relating to Account Transactions of Client is confidential (“Confidential Information”). JPMSCI shall hold such information in strict confidence and shall not use the Confidential Information except in furtherance of this Agreement or in connection with exercising its rights and performing its obligations under this Agreement. Client consents to JPMSCI disclosing Confidential Information: (i) to the extent required by Applicable Law; and (ii) to its affiliates within the JPM Group and service providers and their respective employees, agents or representatives who require such information in furtherance of this Agreement and in order to exercise the rights, or perform the obligations of JPMSCI, pursuant to the terms of this Agreement.


Client hereby consents to the collection, use and disclosure of any personal information (within the meaning of applicable provincial/territorial or federal legislation) by or on behalf of JPMSCI, its agents and employees and any party to whom certain services in connection with this Agreement are performed on behalf of the foregoing from time to time. A copy of the J.P. Morgan - Canada Wholesale Policy is available upon request.

National Instrument 31-103 (Registration Requirements and Exemptions)

In accordance with the above regulation, JPMS makes the following representations:

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Suite 1000, Brunswick House
44 Chipman Hill, P.O. Box 7289, Postal Station A
Saint John, NB E2L 4S6
Attention: C. Paul W. Smith
T:(506) 632-1970 F:(506) 652-1989

Stewart McKelvey
Suite 1100, Cabot Place
100 New Gower Street, P.O. Box 5038
St. John’s, Newfoundland and Labrador A1C 5V3
Attention: Geoff Brown
T:(709) 722-4270 F:(709) 722-4565

Nova Scotia
Stewart McKelvey
Suite 900, Purdy’s Wharf Tower One
1959 Upper Water Street, P.O. Box 997
Halifax, Nova Scotia, B3J 2X2
Attention: Gavin Stuttard
T:(902) 420-3200 F:(902) 420-1417

152928 Canada Inc.
c/o Stikeman Elliott LLP
5300 Commerce Court West, 199 Bay Street
Toronto, Ontario M5L 1B9
Attention: President
T:(416) 869-5617 F:(416) 947-0866

Prince Edward Island
Stewart McKelvey
65 Grafton Street
P.O. Box 2140, Stn Central
Charlottetown, Prince Edward Island, C1A 8B9
Attention: Keith Boswell
T:(902) 892-2485 F:(902) 566-5283

152928 Canada Inc.
c/o Stikeman Elliott LLP
1155 René-Lévesque Blvd., 40th floor
Montréal, Quebec H3B 3V2
Attention: Président
T:(514) 397-3000 F:(514) 397-3222

McDougall Gauley LLP
1500 – 1881 Scarth Street
Regina, Saskatchewan S4P 4K9
Attention: Michael W. Milani, Q.C.
T:(306) 565-5117 F:(306) 359-0785

Field Law
P.O. Box 1734
House 2436
Iqaluit, NU X0A 0H0
T:(867) 979-0550

Northwest Territory
Field Law
Suite 601
4920 – 52nd Street
Yellowknife, NT X1A 3T1
T:(867) 920-4542

Yukon Territory
Lackowicz & Hoffman
300 – 204 Black Street
Whitehorse, Yukon Territory Y1A 2M9
T:(867) 668-5252

Please feel free to contact your J.P. Morgan sales representative with questions regarding any of the above.

Canada’s Anti-Spam Legislation ("CASL")

CASL sets forth the requirements for sending any commercial electronic message (“CEMs”) to the electronic address of a person within Canada. Pursuant to CASL, any CEMs sent to you by JPMS are exempt from CASL under the exemption provided for inter-business CEMs.

Filing a Complaint

If you have a complaint about our services or a product, please contact your registered representative. You may want to consider using a method other than email for sensitive information. Acknowledgement of complaints may take place as soon as possible; typically we strive to respond within 5 business days. Decisions regarding complaints may be provided roughly within 90 days of receiving the complaint.

In addition you may be eligible for Ombudsman for Banking Services and Investments (“OBSI”) independent dispute resolution services when:

For more information about filing a complaint with OBSI, visit www.obsi.ca

Wrapper Exemption

JPMS is delivering this notice to inform you that we are relying on the exemption in section 3A.3 or 3A.4, as applicable, of National Instrument 33-105 Underwriting Conflicts (NI 33-105) from the underwriter conflicts of interest disclosure requirements of NI 33-105 for any distribution to you in the future of an eligible foreign security, as defined in NI 33-105.

If, in connection with a distribution of an eligible foreign security, as defined in Ontario Securities Commission Rule 45-501 Ontario Prospectus and Registration Exemptions or Multilateral Instrument 45-107 Listing Representation and Statutory Rights of Action Disclosure Exemptions, we deliver to you an offering document that constitutes an offering memorandum under applicable securities laws in Canada, you may have, depending on the province or territory of Canada in which the trade was made to you, remedies for rescission or damages if the offering memorandum (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by you within the time limit prescribed by the securities legislation of your province or territory. You should refer to any applicable provisions of the securities legislation of your province or territory for the particulars of these rights or consult with a legal advisor.

1. An automated trading center is one that can, among other things, immediately and automatically respond to an immediate-or-cancel order and update its quotes. A protected quote is one that is displayed by an automated trading center, is disseminated pursuant to an effective national market system plan, and is the best bid or best offer on that automated trading center.


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