Legal Disclosures & Policies

September 21, 2018

This message is intended only for use by the intended party and may contain information that is privileged and/or confidential. If you are not the intended recipient, then any review, dissemination, replication or distribution of this communication is strictly prohibited. If you have received this communication in error, please notify us immediately and delete this message and all attachments.

Electronic communications routed to any employee of Chardan (“Chardan”) are for business purposes only. While messages are confidential, authorized management, legal and compliance personnel may review electronic messages. Electronic messages are also retained and would be provided upon request to an authorized regulatory body.

Information included in this email does not constitute a trade confirmation or an offer or solicitation of an offer to buy/sell securities. Past performance is not indicative of future returns.

Any attachment(s) to this electronic communication that was not prepared by Chardan, LLC (“Chardan”) has been unaltered, and is in its original form. Any recommendation, opinion, or advice regarding securities or markets contained in any documentation that was not prepared by Chardan does not necessarily reflect the views of Chardan, and Chardan does not verify any information included in such material. Lastly, Chardan and/or its employees or affiliates may have an interest in, or from time to time trade or make markets in the securities (and/or related derivatives) of the issues discussed in any attachment annexed hereto.

RULE 605/606 PUBLIC DISCLOSURE

605: http://private.bestxstats.com/605_public/?bxs_mpid=chardan_capital_markets_llc
606: http://private.bestxstats.com/606_public/?company=chdn

PAYMENT FOR ORDER FLOW DISCLOSURE

MEMBER FINRA/SIPC

PAYMENT FOR ORDER FLOW DISCLOSURE

Pursuant to federal securities regulations, we are required to disclose at the time your account is opened, and annually thereafter, our payment for order flow practices.

We route your equity orders to broker/dealers or market centers (i.e., primary exchanges or electronic communication networks (“ECN”)) for execution. These broker/dealers and market centers may include dealers who make markets in these securities. We do not receive any compensation for routing equity orders to dealers. In exchange for routing your equity orders to certain market centers, we may receive monetary rebates per executed share for equity orders that add liquidity to its book and/or rebates for aggregate exchange fees. The rebates are considered payment for order flow even though it may not necessarily offset our aggregate payments for removing liquidity. The amount of the rebate depends on the agreement reached with each market center and will be furnished to you upon written request.

As for options order flow, we do receive payment for routing your options orders to designated broker/dealers or market centers for execution. Compensation is in the form of a per contract cash payment. The source and amount of any compensation received in connection with your options transaction and any additional information concerning the options order flow payments will be furnished to you upon written request.

Order 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. However, we regularly review routing decisions, market centers and review trade executions to ensure that your orders meet our duty of best execution.

Chardan, LLC
17 State Street
Suite 2100
New York, NY 10004
Phone: 646-465-9000
Facsimile: 646-465-9039
E-mail: information@chardancm.com

Disclosures

NEW ACCOUNT POLICY, CUSTOMER IDENTIFICATION PROGRAM

In compliance with the USA PATRIOT Act and other applicable regulations and to help the government fight the funding of terrorism and money laundering activities, we are required to obtain, verify, and record information that identifies each customer who opens an account with us. We may be required to disclose this information pursuant to applicable laws, rules or regulations, but it will otherwise be retained in confidence according to our Privacy Policy.

Therefore, as part of the account opening process we will ask for a customer name, date of birth, street address, an identification number, such as a Taxpayer ID number (social security or employer identification number) and a drivers license or other identifying documents.

For non-US citizens we will ask for a taxpayer identification number, passport number, and country of issuance, alien identification card number, or government-issued identification showing nationality, residence and a photograph of you.

A corporation, partnership, trust or other legal entity may need to provide other information, such as its principal place of business, local office, employer identification number, certified articles of incorporation, government-issued business license, a partnership agreement, or a trust agreement. U.S. Department of the Treasury, Securities and Exchange Commission, FINRA, and New York Stock Exchange rules already require you to provide most of this information.

These rules also may require you to provide additional information, such as your net worth, annual income, occupation, employment information, investment experience and objectives, and risk tolerance. Your cooperation is greatly appreciated.

For Institutional Accounts

We understand that you may have opened an account as an institutional account as defined in FINRA Rule 4512(c). FINRA Rule 4512(c) defines an institutional account as (i) a bank, savings and loan association, insurance company, or registered investment company; (ii) an investment adviser registered either with the SEC under Section 203 of the Investment Advisers Act or with a state securities commission (or any agency or office performing like functions); or (iii) any other person (whether a natural person, corporation, partnership, trust or otherwise) with total assets of at least $50 million. In the event that you are not now, or ever cease to be, an “institutional account” as defined above, you must notify us in writing immediately.

Trusted Contact

Trusted Contact Person Information (optional)

FINRA Rule 2165 (Financial Exploitation of Specified Adults) and amendments to FINRA Rule 4512 (Customer Account Information) relating to financial exploitation of seniors.

By choosing to provide information about a trusted contact person, you authorize us to contact the trusted contact person listed on the form that you submitted when opening your new account. By choosing to complete the Trusted Contact Form, you allow us to disclose information about your account to that person in the following circumstances: to address possible financial exploitation, to confirm the specifics of your current contact information, health status, or the identity of any legal guardian, executor, trustee or holder of a power of attorney, or as otherwise permitted by FINRA Rule 2165 (Financial Exploitation of Specified Adults).

Privacy Policy from Chardan’s Written Supervisory Procedures

[SEC Regulation S-P]

Information regarding customer accounts for individuals is subject to SEC Regulation S-P “Privacy Of Consumer Financial Information.” This section explains employees’ obligation to maintain the privacy of information.

  1. Regulation S-P requirements apply to individual and not institutional accounts and include U.S. and foreign accounts.
  2. Protected information is termed “nonpublic personal information.” This is information obtained by Chardan that is not deemed “public information” which is defined as information that may be obtained from three sources: federal, state or local government records; widely distributed media; or disclosures to the general public that are required to be made by federal, state, or local law.
  3. At the time an account is opened the customer is provided with Chardan’s privacy policy and is given the opportunity to opt out of arrangements to share nonpublic information with nonaffiliated third parties. The privacy policy is also provided to customers on an annual basis.
  4. Employees are prohibited from sharing or releasing nonpublic personal information other than to authorized parties. This includes a prohibition against:

Questions about providing customer information should be referred to Compliance.

BUSINESS CONTINUITY PLAN SUMMARY Date: January 1, 2018

We have prepared, and always maintain a current Business Continuity Plan (“BCP”) in compliance with FINRA Rule 4370. This document outlines our plans to continue business and meet our existing obligations to customers in the event of a Significant Business Disruption (“SBD”). Our BCP is summarized below: Our firm’s policy is to respond to a SBD by safeguarding employees’ lives and firm property, making a financial and operational assessment, quickly recovering and resuming operations, protecting all of the firm’s books and records, and allowing our customers to transact business. We will make every reasonable effort to meet our obligations to customers at all times. Our plan anticipates two kinds of SBDs, internal and external. Internal SBDs affect only our firm’s ability to communicate and do business, such as a fire in our building. External SBDs prevent the operation of the securities markets or a number of firms, such as a terrorist attack, a city flood, or a wide-scale, regional disruption. Our response to an external SBD relies more heavily on other organizations and systems, especially on the capabilities of our clearing firm. In the event that we determine we are unable to continue the normal conduct of our business, due to any of the scenarios described above, or any other circumstances, we will enact our BCP in order to assure customers prompt access to their funds and securities. Our BCP outlines the back-up facilities and arrangements that will be utilized in these circumstances. We will make every reasonable effort to continue the conduct of business during any SBD, employing the use of our BCP. We plan to continue the conduct of business during any SBD unless circumstances prohibit us from doing so. If, for any reason, at any time, we are forced by circumstances outside our direct control to discontinue business, we will immediately determine our planned recovery time and communicate those plans to all concerned parties. Our BCP is subject to modification, update, and improvement at any time so that we may constantly assure ourselves, our customers, and any other concerned party of our readiness to confront a SBD.

Cyber-security Program

In addition to our in-house firewall and anti-virus software which is monitored by our IT staff, Chardan has contracted with a third-party SIEM provider which offers proactive 24 x 7 port-monitoring and reporting. Chardan’s IT department receives daily logs from the firewall with intrusion alerts. Additionally, AVG anti-virus software sends out real-time notifications of any potential threats on individual systems.

Security

We are committed to providing a safe and secure online environment. To that end, we maintain physical, electronic and procedural safeguards to protect information, which comply with all applicable laws. We require independent contractors and other third parties who work with us to adhere to strict privacy standards through their contracts with us.

What we do with your personal information

Chardan is committed to safeguarding the private information entrusted to us by our clients and visitors. We only use your information for the purposes of Chardan. We do not sell, trade, or pass on your details to any third party organizations.

How you can update your personal information

You may update personal information that you submitted to us by contacting us directly.

Links to other websites

Chardan does not take responsibility for collection of personal information via other websites for which a link is provided on this website. You should refer to the privacy statements for those websites.

Effective date

This privacy statement has been in effect since 2002. We reserve the right to change this statement. Any revision to this statement will be effective as of the date of posting.

EXTENDED HOURS TRADING RISK DISCLOSURE

In accordance with NASDAQ Rule 4631 and FINRA Rule 4631 Chardan Capital Markets, LLC is required to disclose to its clients the risks associated with execution in the premarket or post-market trading sessions. Extended hours trading involves material trading risks, including the possibility of lower liquidity, high volatility, changing prices, unlinked markets, an exaggerated effect from news announcements, wider spreads and any other relevant risk. The absence of an updated underlying index value or intraday indicative value is an additional trading risk in extended hours for Derivative Securities Products.

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, 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.
    For more information or questions regarding Extended Hours trading, please contact your account representatives.

Order Routing Information

Chardan has prepared reports pursuant to a U.S. Securities and Exchange Commission rule requiring all brokerage firms to make publicly available quarterly reports on their order routing practices. The reports provide information on the routing of “non-directed orders” – any order that the client has not specifically instructed Chardan to route to a particular venue for execution. For these non-directed orders, Chardan has selected the execution venue on behalf of its clients. Each report identifies the venues most often selected by Chardan, sets forth the percentage of various types of orders routed to the venues, and discusses the material aspects of Chardan’s relationship with the venues.

Click here (www.bestxstats.com) to view Chardan’s SEC Rule 606 Order Routing Information or SEC Rule 605 reporting.

FINRA Rule 5320 – Client Order Handling Policies and Procedures relating to Equities Products in the U.S.

Rule 5320 consolidates two rules: the National Association of Securities Dealers, Inc. (NASD) Manning Rule and New York Stock Exchange (NYSE) Rule 92, which was commonly known as the “trade along” rule. These rules governed execution of client orders. Rule 5320 generally provides that a broker-dealer handling a client order in an equity security is prohibited from trading that security for its own account at a price that would satisfy the client order, unless the firm immediately executes the client’s order up to the size of its own order at the same price or better. While the rule applies broadly to all types of clients and order sizes, it provides exemptions that permit broker-dealers to trade for their own account provided certain conditions are met. If you are an institutional account client, we are permitted under Rule 5320 to trade for our own account while handling your order, unless you inform us otherwise. Please note that you may notify us that you do not consent (opt-out of consent) by contacting your Chardan sales representative or by sending an email to Compliance@chardan.com. Your election may be applied on an order-by-order or blanket basis.

Net Trading

A net transaction is a principal transaction whereby Chardan, after having received an order to buy (sell) an equity security, purchases (sells) the security at one price and then sells to (buys from) you at a different price. The price difference represents the compensation that Chardan receives for facilitating your order. If you do not wish to have your orders handled on a net basis, please inform your Chardan representative in writing and/or send an email to Compliance@chardan.com.

Other information is available relating to your trades:

SEC Rule 10b-10 requires broker dealers to identify additional information about the execution of your order. Generally speaking, most, if not all, your orders that are executed will be reflected on your trade confirmation as an average price. Chardan may have executed your order as a single price execution and/or may have acted as principal, agent or both for another party on one or more exchanges. Details concerning the type of order, venue, date, time of execution and multiple executions are available upon written request to Chardan at Compliance@chardan.com. This disclosure language is also available in the Transaction Terms on your trade confirmation as well as on Chardan’s website in the Legal and Compliance section.

Website Disclaimer

The material on Chardan’s website has been prepared by Chardan Capital Markets, LLC, (“Chardan”) a U.S.-registered broker-dealer. This material is provided for informational purposes only and is not an offer or solicitation of any investments or investment services. Not all investments or investment services described are available in all US states or to all customers.

Cookies

Cookies are small packets of information that web sites store on your computer’s hard drive so that your computer will remember information about your visit. They do not contain any personal data, such as passwords. Our web site may utilize cookies to enhance your experience when you visit. If you do not want our web site to place a cookie on your hard drive, you may be able to turn that feature off on your computer. Please consult your Internet browser’s documentation for information on how to disable cookies.

FINRA/SIPC NOTIFICATIONS

FINRA Notification

FINRA’s public disclosure program toll free hotline number is 1(800)289-9999 and FINRA’s website address is: http://www.finra.org

SIPC Notification
SIPC website address is: https://www.sipc.org/

All customers are advised that information about SIPC, including the SIPC brochure, may be obtained by contacting SIPC. SIPC may be contacted by phone, email or regular mail:

Securities Investor Protection Corporation
805 15th Street, N.W. Suite 800
Washington, D.C. 20005-2215

Tel: (202)371-8300
Fax: (202)371-6728
Email: asksipc@sipc.org

Notice to Canadian Clients – Reliance on International Dealer Exemption in Ontario

Reliance on International Dealer Exemption (“the Exemption”) pursuant to subsection 8.18(2) of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (“NI 31-103”) and Notification to Permitted Clients of the prescribed information under subsection 8.18(4)(b) of NI 31-103

This disclosure is in connection with your account(s) and transactions with, and relevant services and products offered by or through Chardan.

Please note that if you are a client domiciled in Ontario, Canada, when Chardan trades with you it does so in reliance upon the Exemption from the dealer registration requirement under NI 31-103 (as such Exemption may be amended and restated from time to time). Pursuant to the Exemption, Chardan is subject to trading restrictions, including, among other things, that Chardan is only permitted to trade “foreign securities” with “permitted clients” (as defined in NI 31-103) in Ontario, Canada. A foreign security is a security issued by an issuer incorporated, formed or created under the laws of a foreign (i.e., non-Canadian) jurisdiction or a security issued by a government of a foreign jurisdiction. This serves to put you on notice that you should only place orders with Chardan for foreign securities in accordance with the Exemption.

Chardan is not registered as a dealer in any Canadian province or territory. Chardan’s head office or principal place of business is 17 State Street, Suite 2100, New York, NY 10004. All or substantially all of Chardan’s assets may be situated outside of Canada. There may be difficulty enforcing legal rights against Chardan. The name and address of the agent for service of process of Chardan in the jurisdiction of Ontario is listed below:

Fasken

Bay Adelaide Centre

333 Bay Street # 2400

Toronto, ON M5H 2T6

Canada

For more information, please contact Chardan’s Compliance Department at (646) 465-9082 or (646) 465-9013 or email at Compliance@chardan.com.

NEW ACCOUNT POLICY, CUSTOMER IDENTIFICATION PROGRAM

To help the government fight the funding of terrorism and money laundering activities, federal law requires Chardan Capital Markets LLC to obtain, verify, and record information that identifies each person who opens an account with us.

Therefore, as part of the account opening process we will ask for a customer name, date of birth, street address, an identification number, such as a Taxpayer ID number (social security or employer identification number) and a drivers license or other identifying documents.

For non-US citizens we will ask for a taxpayer identification number, passport number, and country of issuance, alien identification card number, or government-issued identification showing nationality, residence and a photograph of you.

A corporation, partnership, trust or other legal entity may need to provide other information, such as its principal place of business, local office, employer identification number, certified articles of incorporation, government-issued business license, a partnership agreement, or a trust agreement. U.S. Department of the Treasury, Securities and Exchange Commission, NASD, and New York Stock Exchange rules already require you to provide most of this information.

These rules also may require you to provide additional information, such as your net worth, annual income, occupation, employment information, investment experience and objectives, and risk tolerance. Your cooperation is greatly appreciated.

FINRA Notification

FINRA’s public disclosure program toll free hotline number is 1(800)289-9999 and FINRA’s website address is: http://www.finra.org

SIPC Notification

All customers are advised that information about SIPC, including the SIPC brochure, may be obtained by contacting SIPC. SIPC may be contacted by phone, email or regular mail:

Securities Investor Protection Corporation
805 15th Street, N.W. Suite 800
Washington, D.C. 20005-2215

Tel: (202)371-8300
Fax: (202)371-6728
Email: asksipc@sipc.org

FINRA Rule 5320/Order Protection

FINRA Rule 5320 provides that a broker/dealer that holds an order in an equity security from one of its customers or a customer of another broker/dealer is prohibited from trading for itself what transaction would satisfy that customer order.

Exceptions to this rule include orders for institutional accounts, and orders of 10,000 shares or more if greater than $100,000 in value unless that account opts in to the protection provided by the rule. This disclosure is made pursuant to rule 5320 to provide our customer the opportunity to opt in to the protection of rule 5320. If you choose to withhold your consent and disallow FIG from trading alongside your orders, notify us in writing at:

Chardan, LLC
Attn: Chief Compliance Officer
17 State Street, Suite 2100
New York NY 10004

Canadian Prospectus Wrapper

CHARDAN CAPITAL MARKETS, LLC
MEMBER FINRA/SIPC

Chardan Capital Markets, LLC is delivering this notice to you because we intend to rely 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 as defined in Multilateral Instrument 45-107 Listing Representations 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. The units described in the accompanying offering memorandum (including any amendment thereto) may be sold only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations (“NI 31-103”). Any resale of the units must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws.

For information regarding our reliance on the International Dealer Exemption pursuant to subsection 8.18(2) of NI 31-103 and Notification to Permitted Clients of the prescribed information under subsection 8.18(4)(b) of NI 31-103, please refer to the disclosure set out on our web page at [www.chardan.com].

17 State Street Box 117 · Suite 2100 · New York, N.Y. 10004 · Tel: 646-465-9000 · Fax: 646-465-9091

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17 State Street
Suite 2100
New York, NY 10004

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