Execution Disclosures

Cuttone & Co., LLC

DISCLOSURES

Our Mission is to provide the highest quality institutional execution experience with full transparency and the fullest commitment to satisfying our client’s sophisticated needs, while strictly adhering to the market’s exacting regulatory standards.

Riskless Principal, Principal and Net Trading

Orders routed to Cuttone’s Net Trading engine or Principal facilitation engine will be executed on a Riskless Principal, Principal or Net Trading basis. For transactions effected on a net trading basis, Cuttone may buy or sell at a price that is different than the orders not held limit price therefore Cuttone will not charge explicit commissions or market center fees. Cuttone however will charge a commission equivalent mark–up or mark–down. While transacting in a principal capacity Cuttone may incur a profit or a loss. Cuttone does not act as a market maker as defined under FINRA Rule 2124 1 . Cuttone follows all applicable rules surrounding net and principal trading, including but not limited to, FINRA trade reporting rules, FINRA Rules 2124 (Net Transactions with Customers), 2121 2 (Fair Prices and Commissions), 5310 3 (Best Execution and Interpositioning) and 5320 4 (Prohibition Against Trading Ahead of Customer Orders), and SEC Rule 611 5 under Regulation NMS (Order Protection Rule). Order routing practices, mark ups and mark downs, and clearing mechanisms are disclosed to and agreed upon with customers prior to the beginning of any trading relationship. All orders sent to Cuttone’s Net Trading engine will be considered “not held” and treated as such. These orders will be handled using price and time discretion with the primary goal of achieving the best execution possible. All executions will take place within the confines of the NBBO. These inbound orders will be reported to OATS (CAT in the future) on a “not held” basis regardless of what the customer’s OMS might default to in FIX routing.

Payment for Order flow

Cuttone may enter into payment for order flow agreements or revenue share agreements with their customers. Cuttone is required to disclose its payment for order flow practices. In exchange for routing certain customer equity orders to exchanges, electronic communication networks, or broker-dealers during normal business hours, Cuttone may receive monetary rebates. The amount rebated varies depending on the agreement reached with each market venue and will be furnished upon request.

Best Execution

Cuttone will continuously seek the best price in the market, including but not limited to, all displayed and non-displayed interest. Due to the nature of fragmented markets and high frequency counterparties, the best price in non-displayed markets may not always be obtainable. Cuttone revises it’s execution venues on a predominantly real time basis but no less than quarterly as guided by FINRA Rule 5310. Cuttone takes into account factors such as the character of the market for the security (e.g. price, volatility, relative liquidity, and pressure on available communications), size and type of transaction, number of markets checked, accessibility of quotation, and the terms and conditions of the order which result in the transaction, as communicated to Cuttone and persons associated with Cuttone. All agency orders received by Cuttone, unless specifically instructed otherwise, are handled on a not held basis.

Reg SHO

Customers of Cuttone are responsible for ensuring that all sell orders sent to Cuttone are properly marked as required by Rule 200 of Regulation SHO. Pursuant to Rule 203(b)(2)(i) of Regulation SHO, registered Broker Dealer subscribers are responsible for complying with the locate requirements of Rule 203(b)(1) of Regulation SHO. Cuttone does not borrow or “locate” securities with respect to customer orders. By sending a short sale order to Cuttone, you are affirming your ability to borrow or you are relying on an exception to the Regulation SHO locate requirement.

 

https://www.finra.org/rules-guidance/rulebooks/finra-rules/2124

2 https://www.finra.org/rules-guidance/rulebooks/finra-rules/2121

3 https://www.finra.org/rules-guidance/guidance/reports/2018-report-exam-findings/best-execution-0

4 https://www.finra.org/rules-guidance/rulebooks/finra-rules/5320

5 https://www.sec.gov/spotlight/emsac/memo-rule-611-regulation-nms.pdf