Liberty Associates, Inc. (“Liberty” or the “Firm” ), a FINRA-member firm and has prepared this report pursuant to a U.S. Securities and Exchange Commission Rule 606 requiring all brokerage firms to make publicly available quarterly reports on their order routing practices. The report provides information on the routing of “non-directed orders” – any order that the customer has not specifically instructed Liberty to route to a particular venue for execution. For these non-directed orders, Liberty has selected the execution venue on behalf of its customers.
All of Liberty’s customer trades are cleared through RBC Correspondent Services (“RBC”) (the “Clearing Firm”). Non-directed stock orders and non-directed option orders received by Liberty are routed through the Clearing Firm’s routing system with the Clearing Firm responsible for selecting the execution venue. Liberty’s routing report addresses the routing of all of these non-directed customer options orders. Please refer to the routing report below.
Separate sections of this report identify the venues most often selected by Liberty’s clearing firm when routing customers’ options orders and set forth the percentages of various types of orders routed to each venue. Liberty may have additional relationships with certain venues to which it routes option orders, and does have “payment for order flow” or “profit sharing” relationships with such venues.
Firm’s Relationship with RBC CS
(“Our firm” refers to the correspondent)
Our firm has a contractual agreement with RBC Correspondent Services (RBC CS) to serve as our clearing firm. This fully disclosed agreement states the responsibilities of each party. Prior to the agreement becoming effective, RBC CS is responsible for making all disclosures to our firm’s designated examining authority as required by NYSE Rule 382. Each client of our firm is notified of the relationship via a disclosure letter. The disclosure letter details the responsibilities that our firm (the introducing broker-dealer) and RBC CS (the clearing firm) have to the client. Although client assets are held by RBC Capital Markets, LLC, neither RBC Capital Markets, LLC, nor RBC CS has responsibility for the financial condition or performance of our firm or our Financial Advisors.
SIPC & Additional Coverage for Client Accounts
(“Our firm” refers to the correspondent)
Our clearing firm, RBC Correspondent Services, is a division of RBC Capital Markets, LLC. RBC Capital Markets, LLC, is a member of the Securities Investor Protection Corporation (SIPC). SIPC is a nonprofit membership corporation funded by its member security broker-dealers. SIPC protects the securities clients of its members in the event of the failure of a member firm. SIPC reimburses clients the cash value of their securities up to $500,000 per client. Any cash in a client’s account would be reimbursed by SIPC up to $250,000 (reducing the $500,000 above).
RBC Capital Markets, LLC, has purchased an additional policy that offers coverage in excess of the protection provided by SIPC. This coverage covers additional securities and cash protection up to $99.5 million per client, of which $900,000 may be in cash. A $400 million aggregate limit applies to this additional coverage.
RBC Capital Markets, LLC, also offers protection if a client’s securities are missing because of theft by an outsider, computer fraud or theft by an employee for personal gain. In such cases, the firm’s CAN$310 million Financial Institution Bond coverage would cover the client’s losses, subject to that policy’s terms, conditions and limits.
Note: Neither SIPC protection nor protection in excess of that offered by SIPC, covers a decline in the value of a client’s assets due to market loss. Additional information is available upon request or at www.sipc.org.
