Lazard Frères & Co. LLC (“LF & Co." or the “Firm”) collects nonpublic personal information about you from the following sources:
- Information we receive from you on applications or other forms
- Information about your transactions with us, our affiliates or others; and
- Information we receive from consumer reporting agencies
We may disclose nonpublic personal information about our customers or former customers to our affiliated firms. If you prefer to opt out of this information sharing, please contact your LF & Co. representative.
The Firm restricts access to nonpublic personal information about you to employees of LF & Co. and execution service bureaus. The Firm maintains physical, electronic, and procedural safeguards that comply with federal standards to guard your nonpublic personal information.
Each of LF & Co. and Lazard Middle Market LLC ("LMM") is committed to complying with U.S. statutory and regulatory requirements designed to combat money laundering and terrorist financing. The USA Patriot Act requires all financial institutions to obtain, verify, and record information that identifies each person or entity that opens an account or establishes a relationship with the Firm. Specifically, LF & Co. and LMM are required to collect the following information: legal name, date of birth, address and identification number (TIN or SSN). A 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, and a partnership agreement or a trust agreement. We may also ask for a copy of your driver’s license or seek additional documentation.
The Financial Industry Regulatory Authority (“FINRA”) requires each of its members to disclose to customers how its business continuity plan addresses the possibility of a future significant business disruption and how the member plans to respond to events of varying scope. LF & Co. and LMM have posted their business continuity information on the Legal Notice page of this web site. Copies will be mailed to customers upon request.
Extended Hours Trading Risk Disclosure
FINRA Rule 2265
LF & Co. may execute a customer order outside of regular trading hours should the customer specifically request such facilitation. Clients should consider the following points before placing orders for execution during extended hours trading.
- 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 customers to buy and sell securities, and as a result, customers 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 markets 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 the 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 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 that 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.
Held and Not Held Orders
Absent specific instructions to the contrary, LF & Co. understands that when an institutional customer places an order with us, it is directing that we handle the order on a “not held” basis. This means the client is giving us discretion to use our judgment on the time and manner in which the order is executed, so that we may seek to obtain best execution. Institutional client orders transmitted via FIX or other protocol and not designated as “held” or “not held” will be handled as “not held.”
If the order is to be executed on a “held” basis, the client must identify it as such at the time of entry. We will immediately execute any market order at the then prevailing market price and any limit order at or better than your limit price if possible.
Investor Education and Protection Disclosure
FINRA Rule 2267
The Financial Industry Regulatory Authority runs a public disclosure program known as BrokerCheck that provides information about brokerage firms and their registered persons. To obtain an investor brochure that includes information about BrokerCheck or to obtain additional information, contact the FINRA public disclosure hotline at (800) 289-9999 or visit the BrokerCheck website at http://brokercheck.finra.org/. FINRA’s general website is located at www.finra.org/
Notice to Canadian Customers
Pursuant to National Instrument 31-103 (Registration Requirements and Exemptions), LF & Co. is informing you of the following:
- LF & Co. is not registered in Canada and is trading with you, its client, in reliance upon an exemption from the dealer registration requirement under National Instrument 31-103. As such, LF & Co is subject to trading restrictions and may only trade in, primarily, non-Canadian securities (i.e., issued by an issuer incorporated, formed or created under the laws of a non-Canadian jurisdiction or issued by a non-Canadian government) with “permitted clients” resident in Canada.
- LF & Co.’s jurisdiction of residence is New York, NY.
- The name and address of the agent for service of process of the Firm in the Province of Ontario is:
McCarthy Tétrault LLP
Suite 5300, TD Bank Tower
Toronto Dominion Centre
Toronto, Ontario M5K 1E6
Attn: Michael Nicholas
- There may be difficulty enforcing legal rights against LF & Co. because it is resident outside of Canada and all or substantially all of its assets may be situated outside of Canada.
LF & Co. may handle orders from institutional customers on a net basis unless instructed otherwise on a blanket or order by order basis. A net transaction means a principal transaction in which a registered market maker or block positioner, after having received an order to buy (sell) an equity security, purchases (sells) the security at one price (from (to) another broker-dealer or another customer) and then sells to (buys from) the customer at a different price. The price difference represents the compensation that the market maker receives for facilitating the customer’s order. If you prefer LF & Co. not execute your orders on a “net” basis, please contact your LF & Co. representative. If you have no objection to LF & Co. executing your orders on a “net” basis, no action is necessary.
Order Routing Disclosure
SEC Rule 606
In accordance with SEC Rule 606, Lazard Frères & Co. LLC is making available a quarterly report which provides specific statistical information about its order routing practices of “non-directed orders” in U.S. exchange-listed equity securities and options. A non-directed order is any order that the customer has not specifically instructed to be routed to a particular venue for execution. For these non-directed orders, LF & Co. has selected the execution venue on behalf of its customer. The report is divided into four sections as mandated by the SEC: 1) New York Stock Exchange securities, 2) Nasdaq Stock Exchange securities, 3) NYSE MKT or any other National Securities Exchange securities and 4) Exchange-Listed Options. For each section, the rule requires the identification of the venues most often selected by LF & Co., the percentages of various types of orders routed to the venues and a discussion of any material aspects of LF & Co.’s relationship with each venue.
Click here to access our Rule 606 Report. A printed copy of this report is available upon written request.
Payment for Order Flow
Certain exchanges rebate or discount transaction fees for certain orders that add liquidity and charge higher fees for orders that reduce liquidity. Such rebates may be considered payment for order flow. Other than the reduction of fees described above, LF & Co. does not receive direct payments from any market center in exchange for routing orders.
Prohibition on Front Running of Block Transactions
FINRA Rule 5270
Rule 5270 generally prohibits the Firm from trading for its own account when in possession of material, non-public information concerning an imminent client block transaction. However, the Rule does not preclude LF & Co. from trading for its own account for the purpose of fulfilling, or facilitating the execution of a client’s block order. Under certain circumstances, LF & Co. may engage in hedging activity when facilitating a client’s block order, which may coincidentally impact the market prices of the subject securities or related financial instruments. The Firm will make every effort to conduct its trading in a manner to limit any potential market impact. The Firm will not place its own financial interests ahead of our clients.
Please contact your sales representative if you have any questions regarding this matter or wish to discuss it further.
Trading Along With Customer Orders
FINRA Rule 5320
In the section above entitled Held and Not Held Orders, we note that LF & Co. presumes orders from our institutional customers are Not Held unless you specify otherwise. Please note that such not held orders are not subject to the protections of FINRA Rule 5320.
Rule 5320 generally prohibits the Firm from trading for its own account in an NMS stock or OTC equity security at a price that is equal to or better than an unexecuted held customer order, unless we immediately thereafter execute the customer order up to the size and the price we executed our own order.
The Rule provides an exception for large-sized orders (orders of 10,000 shares or more with a total value of $100,000 or more) and/or orders by institutional accounts. For such orders, the Firm may trade a security on the same side of the market for its own account at a price that would satisfy the customer’s held order.
You may opt in to the protections of FINRA Rule 5320 with respect to all or any portion of your orders by notifying us of your objection to LF & Co. trading along with your orders by mail to Lazard Frères & Co. LLC, 30 Rockefeller Plaza, New York, NY 10112, Attn: Legal and Compliance.
You may also notify us on a trade-by-trade basis that you object to our trading along with your order.
If we do not receive any objection, we will presume that you consent to our trading activity.
Disclosure of Financial Condition
FINRA Rule 2261
Copies of LF & Co.'s or LMM's audited financials will be provided to any customer upon written request.
You may obtain information about the Securities Investor Protection Corporation (SIPC), including a copy of the SIPC brochure, by calling them at (202) 371-8300 or visiting their web site at www.sipc.org.