Important Disclosures

Merriman Capital, Inc. is a full-service investment banking firm that provides investment banking, sales and trading, and equity research services to corporate and institutional clients and high-net-worth investors. Merriman Capital, Inc. is a wholly owned subsidiary of Merriman Holdings, Inc., which is listed on the OTCQX and trades under the symbol “MERR.”

Merriman Capital, Inc. is a registered broker-dealer and member of The Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC).

All references to “Merriman” herein refer to Merriman Capital, Inc.

Here is a list of important disclosures related to our products and services. Click on the respective list entry to jump to that disclosure section.

 

SEC Rule 605

In compliance with SEC Rule 605, order execution information can be accessed by clicking the link below.

Merriman Rule 605 order execution information

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SEC Rule 606

In compliance with SEC Rule 606, information regarding the routing of customer orders can be accessed by clicking the link below.

Merriman Rule 606 routing information

Notice to Customers Regarding SEC Rule 606:

Upon written request, Merriman Capital, Inc. will provide to customers the identity of the venue to which a particular order was routed for execution provided that the executed order was placed with the firm within the last six months. Please contact your account representative for details.

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Payment for Order Flow

Merriman does not engage in any agreements for payment for routing order flow to or receiving order flow from any designated exchanges, market makers, broker dealers or market centers. Nor does it engage in any other arrangements that are required to be disclosed as defined in SEC rule 10b-10(d)(9).

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Important Information You Need to Know about Opening a New Account at Merriman Capital, Inc.

To help the government fight the funding of terrorism and money laundering activities, federal law requires financial institutions to obtain, verify and record information that identifies each person who opens an account.

Merriman Capital is currently only accepting institutional accounts as defined by FINRA Rule 2111. Retail account openings are subject to the approval of management, compliance and operations.

This notice answers some questions about our Customer Identification Program.

What types of information will I need to provide?

When you open an account, we are required to collect the following information:

  • Name
  • Date of birth
  • Address
  • Identification number:
    • U.S. citizen: taxpayer identification number (Social Security number or employer identification number)
    • Non-U.S. citizen: 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.

You may also need to show your driver’s license or other identifying documents.

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.

What happens if I don’t provide the information requested or my identity can’t be verified?

We may not be able to open an account or carry out transactions for you. If we have already opened an account for you, we may have to close it.

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Insider Information Policy and Procedures and the Use of Outside Consultants / Advisors / Experts Policy

Pursuant to the SEC Insider Trading and Securities Fraud Enforcement Act of 1988 (ITSFEA), it is Merriman policy that no person associated with the firm may trade on material non-public information in breach of a duty of confidentiality or a relationship of trust and confidence. It is also our policy that no person associated with this firm may disclose any such information to any person inside or outside of Merriman (including to any family member) unless those persons have been formally brought over the Information Barrier and those persons have agreed to keep that information confidential and not to trade based on that information.  Any employee of the firm that comes into possession of material, non-public information must immediately report that fact to the Compliance Department.

Insider Trading Defined

Insider trading involves buying or selling a security while in possession of material, non-public information about the activities or performance of the issuer of the securities, in breach of a duty of confidentiality, or a relationship of trust and confidence. Violations also include sharing such information with another person (also called tipping) who then uses that information to trade, or trading on information received third hand (also called tipped information).

Information: Information includes facts, documents, occurrences or data about which a person comes in possession. Information may be obtained directly, but may also be obtained from other persons or entities which have a relationship of trust and confidence with the issuer, including personnel of the issuer, their outside experts (such as auditors, lawyers or other investment bankers), customers or suppliers of the issuer, or other persons at Merriman. Persons may also gather information from various sources that, once put together, leads to a conclusion that is material. Although the securities laws sometimes permit trading on the basis of such “mosaic” information, as a matter of Merriman policy, such a conclusion may only be traded on or discussed with another person or entity within prescribed parameters related to the business of the issuer and Merriman.

Material: Information is material if it is the kind of information that would affect the investment decision of a reasonable investor, including speculative as well as conservative, retail as well as institutional investors. Examples of information that could be material include (but are not limited to):

  • mergers, acquisitions, tender offers or restructurings;
  • securities offerings or sales by insiders;
  • a change in earnings or dividends;
  • significant new business products or discoveries;
  • initiating research coverage;
  • a change in analyst’s rating, or stock price estimate;
  • a change in an issuer’s credit rating;
  • “tips” about news articles prior to dissemination;
  • “tips” about litigation prior to filing or a verdict;
  • significant shifts in operating or financial circumstances; and
  • changes in significant personnel.

The information does not need to be (but of course it may be) provided by the issuer to be material. Material information can come from outside vendors, service providers, and various other sources also in a position of trust and confidence with their source of information.

Non-public: Information is non-public if it has not been distributed generally to the marketplace, or if not enough time has passed since the distribution of that information for the marketplace to have had time to react to the information.

Relationship of trust and confidence: Merriman works to build relationships with our client companies. These include companies for which we provide or are seeking to provide investment banking or advisory services. The fundamental components of such relationships are the elements of trust and confidence. In order avoid violating that trust we endeavor to keep all material nonpublic information in our possession tightly controlled. We do not use material nonpublic information for any other purpose than to serve the client who has entrusted us with their information. We do not disclose such information to anyone, inside or outside the firm who does not have a demonstrable “need to know.”

Duty of Confidentiality: A duty of confidentiality may be created by an express confidentiality agreement, or by an ongoing relationship of trust and confidence. Generally speaking, Merriman has a duty of confidentiality with respect to material non-public information it receives from any client or potential client.

Tipping: A person could also be in violation of the prohibition against insider trading if they provided “tipped” inside information to another person or entity (whether or not the person or entity was employed by or associated with Merriman) and that person or entity traded on such information. Any person or entity trading on tipped information, if they have reason to know it was provided in violation of a duty of confidentiality, is also subject to prosecution for insider trading.

 The Use of Outside Consultants / Advisors / Experts Policy 

All events, meetings or calls which involve an outside consultant, advisor or subject matter expert (Experts) must be approved in advance by a senior manager and have the written authorization of Compliance. In such events, meetings or calls, Merriman employees must take care to ensure that any Experts that are employed by, or have recently been employed by, publicly traded companies understand that they may not, during their discussion, disclose material nonpublic information about their employer, or to disclose any other information that would violate their duty of confidentiality to persons other than their employer.

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Statement Regarding Research Analysts’ Conflicts of Interest

Pursuant to NASD Rule 2711 and other initiatives stemming from the New York State Attorney General Eliot Spitzer’s agreement with Merrill Lynch & Co. (“the Merrill Lynch principles”), effective July 1, 2002, Merriman has reaffirmed its policies related to research analysts. Following are excerpts from our regulatory policy guide that address the Merrill Lynch principles:

No Merriman research analyst may be subject to the supervision or control of any employee of Merriman’s investment banking department. The firm’s research personnel report to the managing director with overall management responsibility for the research department (the “Director of Research”). In turn, the Director of Research reports to Merriman’s Executive Committee. There may be, from time to time, Executive Committee members who are in the investment banking department, however, those persons do not exercise any direct control over any employee of the research department.

Merriman does not pay any research analyst any bonus, salary or other form of compensation that is based upon a specific investment banking transaction. Analysts’ compensation is based upon several factors, including but not limited to, the quality of the research and financial advice they provide to our institutional customers and the impact that their research has on the success of Merriman’s overall business. Success may be measured by the overall commissions and fees that Merriman’s institutional customers pay the firm, as well as other quantitative and qualitative factors. Final compensation is decided by Merriman’s Research Analyst Compensation Committee consistent with NASD Rule 2711.

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Privacy Notice

In accordance with the Federal Financial Privacy Law (Gramm-Leach-Bliley Act, Nov. 1999), the following are Merriman’s privacy policies applicable to non-public personal information gained from this website and to its business relationships in general:

Our commitment to you

In your relationship with Merriman, either as an existing or prospective customer, you may entrust us with your personal and financial data. We recognize that your relationship with us is based on trust, and that you expect us to act responsibly and in your best interest. Because your personal and financial information is private, we hold ourselves to the highest standards in its safekeeping and use.

We may collect nonpublic personal information about you from the following sources:

  • Information we receive from you on account applications or other forms, such as your name, address, telephone number, social security number, income, assets, and investment objectives.
  • Information about your transactions with us, our affiliates, or others, such as your account numbers and balances, investment activity, and other transaction information maintained by Pershing, LLC, our clearing broker/dealer.
  • Information supplied by you when registering for Merriman sponsored conferences or seminars.

 We protect your personal information

 We use the information described above to provide the best possible service when administering your account. We may disclose nonpublic personal information in order to provide a service or complete a transaction that you request or authorize, or as otherwise required or permitted by the laws and industry standards that apply to us (e.g. anti-money laundering, regulatory requests). We restrict access to nonpublic personal information about you to employees who need to access the information in order to facilitate and/or administer trade executions. We maintain physical, electronic, and procedural safeguards to protect your nonpublic personal information. Our privacy policies and practices will continue to apply to your information even if your account is no longer active.

 What you can do

For your protection, we recommend that you do not provide your account information to anyone. If you become aware of any suspicious activity relating to your account, please contact us immediately.

We will keep you informed

You may receive notices of changes to our privacy policies or periodic updates of this notice, as required by law.

At Merriman, we are proud of the trust and confidence we have earned from you. We will continue to earn that trust and confidence by keeping your nonpublic personal information secure and confidential.

Contact Us

If you have any questions about our practices with respect to your non-public personal information, you may write to use at 600 California St., 9th Floor, San Francisco, CA 94108 or call us at +1.415.248.5600.

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Extended Hours Trading Risk Disclosure

Pursuant to both FINRA and NASDAQ rules, Merriman is required to provide the following disclosures regarding risk associated with customer trading in the Pre-Market and Post-Market Sessions:

  • 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 markets 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 of 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 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.
  • Risk of Lack of Calculation or Dissemination of Underlying Index Value or Intraday Indicative Value (“IIV”). For certain derivative securities products, an updated underlying index value or IIV may not be calculated or publicly disseminated in extended trading hours. Since the underlying index value and IIV are not calculated or widely disseminated during the pre-market and post-market sessions an investor who is unable to calculate implied values for certain derivative securities products in those sessions may be at a disadvantage to market professionals.
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Characteristics and Risks of Standardized Options

Information on the characteristics and risks of standardized options is furnished by The Options Clearing Corporation and can be accessed by clicking the link below.

View options disclosure materials:

http://www.optionsclearing.com/about/publications/character-risks.jsp

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Business Continuity Plan

Merriman Capital, Inc. is a full-service investment banking firm that provides investment banking, sales and trading, and equity research services to corporate and institutional clients and high-net-worth investors. Merriman Capital, Inc.  is a wholly owned subsidiary of Merriman Holdings, Inc., which is listed on the OTCQX and trades under the symbol “MERR.”

Merriman Capital, Inc. is a registered broker-dealer and member of The Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC).

All references to “Merriman” herein refer to Merriman Capital, Inc.

Merriman has developed a Business Continuity Plan (BCP) describing how we will respond to events that significantly disrupt our business. Because the timing and impact of disasters and disruptions is unpredictable, we will have to be flexible in responding to actual events as they occur. With that in mind, we are providing you with this information on our Business Continuity Plan.

Contacting Us

If after a significant business disruption you cannot contact us as you usually do at +1.415.248.5600 and/or investor_relations@merrimanco.com, you should call our alternative number +1.646.292.1400 and/or www.merrimanco.com where you can obtain additional information. If you cannot access us through either of those means, you should contact our clearing firm for instructions on how to gain prompt access to funds and securities, enter orders and process other trade-relate, cash, and security transfer transactions.

Pershing LLC
One Pershing Plaza
Jersey City, NJ 07399

+1.201.413.2495 or +1.800.443.4342

Our Business Continuity Plan

We plan to quickly recover and resume business operations after a significant business disruption and respond by safeguarding our employees and property, making a financial and operational assessment, protecting the firm’s books and records, and allowing our customers to transact business. In short, our Business Continuity Plan is designed to permit our firm to resume operations as quickly as possible, taking into account the scope and severity of the significant business disruption.

Our Business Continuity Plan addresses data backup and recovery; all mission critical systems; financial and operational assessments; alternative communications with customers, employees, and regulators; alternate physical location of employees; critical supplier, contractor, bank and counterparty impact; regulatory reporting; and assuring our customers prompt access to their funds and securities if we are unable to continue our business.

Merriman uses disk-to-disk and disk-to-tape backup solutions. These backup solutions provide off-site storage of our internal documents including, but not limited to, data production, e-mail and Instant Messenger (IM). In addition our clearing firm, Pershing, LLC, backs up their important records in a geographically separate area. While every emergency situation poses unique problems based on external factors, such as time of day and the severity of the disruption, we have been advised by our clearing firm that its objective is to restore its own operations and be able to complete existing transactions and accept new transactions and payments within 4 to 12 hours. Your orders and requests for funds and securities could be delayed during this period.

Varying Disruptions

Significant business disruptions can vary in their scope, such as only our firm, a single building housing our firm, the business district where our firm is located, the city where we are located, or the whole region. Within each of these areas, the severity of the disruption can also vary from minimal to severe. In a disruption to only our firm or a building housing our firm, we will transfer our operations to an alternate location when needed and reasonably expect to recover and resume business within the same business day. In a disruption affecting our business district, city, or region, we will transfer our operations to a site outside of the affected area, and recover and resume business within 24 hours. In either situation, we plan to continue in business or, if necessary, transfer certain operations to our clearing firm, and notify you through our web site www.merrimanco.com or our customer emergency number, +1.646.292.1400. If the significant business disruption is so severe that it completely prevents us from continuing business operations, we will assure our customers prompt access to their funds and securities.

For more information

The Merriman Business Continuity Plan is reviewed periodically and subject to modification without notice. A written copy of the summary of our Business Continuity Plan will be provided to customers upon request. If you have questions about our Business Continuity Plan, you can contact us at +1.415.248.5600 and/or compliance@merrimanco.com

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