Customer Notices FINRA Rule 5270
FINRA Rule 5270, effective September 3, 2013, provides that no FINRA member or person associated with a member may cause an order to buy or sell a security or a related financial instrument to be executed when that member has material, non-public information concerning an imminent block transaction in that security, a related financial instrument or a security underlying the related financial instrument prior to the time the information concerning the block transaction has been made publicly available, or has otherwise become stale or obsolete.
In certain instances, Rule 5270 permits members to undertake transactions for the purpose of fulfilling or facilitating the execution of the customer’s block transaction.
Under these certain circumstances, Credit Suisse Securities (USA) LLC (“CSSU”) may use information concerning customer orders or proposed transactions to facilitate the execution of those orders or transactions and may, subject to applicable rules and regulations, take the information into account in limiting the risks to which the CSSU is subject in the course of its activities.
As a result, CSSU may seek to purchase or sell individual or related securities or derivatives to unwind a facilitation position, or to hedge (i.e., reduce or eliminate) its risk in preparing for and executing block orders. CSSU’s activity could potentially have an impact on the prices achieved for the individual securities of your order or transaction; however, CSSU will use reasonable efforts to avoid or minimize any such impact and to obtain the best possible execution for your order or transaction.
If you have any questions, please contact your CSSU representative.