Payment for Order Flow

Payment for Order Flow Disclosure

Velocity Clearing, LLC may receive remuneration for directing orders to a particular broker-dealer and routes orders to market centers including national securities exchanges, alternative trading systems, electronic communications networks and other broker-dealers that offer credits for certain types of orders while assessing fees for other types of orders. In some cases, the credits offered by a market center will exceed the charges assessed such that a market center makes a payment to Velocity Clearing, LLC in relation to orders directed to such market center. Such remuneration is considered compensation to Velocity Clearing, LLC and the source and amount of any compensation will be disclosed upon written request.

Order Routing

SEC Rule 606 (“Rule 606”) requires all broker-dealers that route orders in equity and option securities to make publicly available quarterly reports that present a general overview of their routing practices related to held, non-directed customer orders. The reports must identify the significant venues to which customer orders were routed for execution during the applicable quarter and disclose the material aspects of the broker-dealer’s relationships with such venues. Velocity Clearing, LLC makes this routing information available on its website in compliance with Rule 606, which you may access via the following link: https://www.velocityclearingllc.com/disclosures#payment-for-order-flow/

In addition, Rule 606 requires broker-dealers to notify customers of their ability to receive, free of charge, information concerning the routing of the customer’s orders for execution. In accordance with SEC Rule 606(b), upon request from a customer, Velocity Clearing, LLC will provide a report on its handling of the customer’s orders in NMS securities that were submitted to Velocity Clearing, LLC for execution for the prior six months. Specifically, customers may request the identity of the venue to which the identified orders were routed, whether the orders were directed or non-directed and the time of any resulting transactions. Please contact trading@velocityclearingllc.com to request information regarding the routing of your individual orders.

Net Trading

If you agree to net trading as part of your Account Agreement, you authorize Velocity Clearing, LLC to execute not held orders as principal on a net basis. When executing orders on a net basis, Velocity Clearing, LLC accumulates a position in a principal account to fill your order and then executes your order at a price(s) that is typically above its average accumulation cost in the case of a buy order or below its average accumulation cost in the case of a sell order. The difference between Velocity Clearing, LLC’s average cost to accumulate a position to fill your order and the price reported to you and the consolidated tape is compensation to Velocity Clearing, LLC for executing your order. Details regarding the individual executions used to fill your order(s) are available upon request. Velocity Clearing, LLC may incur a profit (or sustain a loss) in its proprietary account as a result of executing trades on a net basis. For orders traded on a net basis, you will receive an execution at or better than your limit price.

If you would like more information or no longer wish to have your orders executed on a net basis, you need to notify Velocity Clearing, LLC in writing to trading@velocityclearingllc.com or to Velocity Clearing, LLC, 199 Water Street, 17th Floor, New York, NY 10038. Orders that are not transacted on a net basis may be subject to a commission or markup/markdown and pass through of market center fees.

Not Held Order Handling

Unless otherwise approved by Velocity Clearing, LLC, all non-directed client orders, including immediate or cancel (“IOC”) orders and those delivered electronically, will be accepted and handled as not held orders, which allows the Firm to exercise a certain degree of price and time discretion when executing the order consistent with the Firm s duty of best execution. Velocity Clearing, LLC does not accept non-directed held orders without prior approval.

FINRA 5320 Compliance

FINRA Rule 5320 (“Rule 5320”) generally prohibits a broker-dealer from trading for its own account on terms that would satisfy a customer order. Rule 5320 provides certain exemptions that Velocity Clearing, LLC relies upon, such as an exemption for not held orders which give Velocity Clearing, LLC time and price discretion. Velocity Clearing, LLC may trade in its own account prior to the completion of the client order when handling not held orders. Additionally, Rule 5320 permits a broker-dealer to trade for its own account while in possession of certain large sized orders (orders of 10,000 shares or more and have a value of $100,000 or more) for an institutional account (as that term is defined in FINRA Rule 4512(c)), provided that the broker-dealer provides clear and comprehensive written disclosure at account opening and annually thereafter. Additionally, the broker-dealer is required to provide its institutional accounts with the opportunity to opt into the protections of Rule 5320 with respect to all or a portion of its order(s). You may opt in” to the protections of Rule 5320 by contacting the Compliance Department at compliance@velocityclearingllc.com.

If you do not opt into the Rule 5320 protections with respect to all or a portion of your order(s), Velocity Clearing, LLC may reasonably conclude that you have consented to the Firm trading a security on the same side of the market for its own account at a price that would satisfy your order, as described above. Even when a customer has opted in to the FINRA Rule 5320 protections, Velocity Clearing, LLC may seek and the client may provide consent to trade along on an order-by-order basis

Download the reports: