Annual Notices to Customers
FINRA RULE 2264 – MARGIN DISCLOSURE
Morgan Stanley Smith Barney LLC (“Morgan Stanley”) is furnishing this information to you to provide some basic facts about purchasing securities on margin. Securities purchased on margin are Morgan Stanley's collateral for the loan to you. If the securities in your account decline in value, so does the value of the collateral supporting your loan, and, as a result, Morgan Stanley can take action, such as issue a margin call and/or sell securities or other assets in any of your accounts held with Morgan Stanley, to maintain the required equity in the account. It is important that you fully understand the risks involved in trading securities on margin.
These risks include the following:
- You can lose more funds than you deposit in the margin account.
- Morgan Stanley can force the sale of securities or other assets in your account(s).
- Morgan Stanley can sell your securities or other assets without contacting you.
- If Morgan Stanley takes action to meet a margin call on your behalf, you will not have the ability to choose which securities are liquidated.
- Morgan Stanley can increase your "house" maintenance margin requirements at any time and is not required to provide you advance written notice.
- Morgan Stanley may change margin requirements at any time without prior notice and call for additional collateral, including without limitation on an intraday basis.
- You are not entitled to an extension of time on a margin call.
FINRA RULE 2266 – SIPC INFORMATION
SIPC and Other Coverage. Morgan Stanley is a member of SIPC, which protects securities customers of its members up to $500,000 (including $250,000 for claims of cash). Customers may obtain information about SIPC, including the SIPC brochure, by contacting SIPC at sipc.org or calling 1-202-371-8300.
Morgan Stanley also maintains additional insurance with an aggregate firmwide limit of $1 billion. For additional information about Morgan Stanley's excess of SIPC protection, please go to etrade.com/iai.
Please note that money market mutual fund balances are securities, not cash. As with other securities investments, the market risks associated with investing and any losses resulting therefrom are not covered by SIPC or the additional protection.
FINRA RULE 2267 – BROKERCHECK
FINRA's BrokerCheck allows investors to learn about the professional background, business practices, and conduct of FINRA member firms and their brokers. Records of securities professionals currently associated with a member and persons who have been associated with a member within the last two years are available to the public through BrokerCheck. Information is also available for FINRA-registered securities firms. Information is free to private investors for personal use. The telephone number of BrokerCheck is 1-800-289-9999. For more information about FINRA, visit finra.org. An investor brochure describing the BrokerCheck program is also available on request or at brokercheck.finra.org.
SEA RULE 606 – NOTICE OF AVAILABILITY OF ORDER ROUTING INFORMATION
Morgan Stanley prepares quarterly reports describing its order routing practices for nondirected orders routed to a particular venue for execution. These reports are publicly available at etrade.com. Morgan Stanley will furnish a written copy of the quarterly report on request. In addition, Morgan Stanley will provide on request more-detailed information related to the routing of any order in the six months prior to the request, including the identity of the venue to which the customer's orders were routed for execution, whether the orders were directed or nondirected orders, and the time of any transactions that resulted from such orders.
SEA RULE 607 – PAYMENT FOR ORDER FLOW DISCLOSURE
Morgan Stanley takes a number of factors into consideration in determining where to route customers' orders, including the speed of execution, price improvement opportunities (executions at prices superior to the then prevailing inside market), automatic execution guarantees, the availability of efficient and reliable order-handling systems, the level of service provided, the cost of executing orders, and whether it will receive remuneration from particular broker-dealers and market centers for routing customer orders to them for execution. Morgan Stanley receives remuneration, generally in the form of cash payments and rebates, from particular broker-dealers and market centers for directing customer orders in securities to them for execution.
MSRB Notice
This notification is provided pursuant to Municipal Securities Rulemaking Board ("MSRB") Rule G-10 to inform you that (i) Morgan Stanley is registered with the MSRB and the Securities and Exchange Commission (SEC), (ii) information concerning the municipal market can be found at msrb.org, and (iii) a brochure that describes the protections available under MSRB rules and how to file a complaint with an appropriate regulatory authority is available on the MSRB website.