This Additional Terms US Fractional Shares Trading Services ("Terms") for governs the Company's provision of U.S. Fractional Shares Trading Services. It supplements the Client Agreement, and should be read together with, the Terms and any other terms and conditions governing the services provided by the Company, as they may be amended from time to time. It forms an integral part of the Agreement.
The US Fractional Shares Trading Services is an additional service provided by the Company to you under the Client Agreement. These Terms shall form part of the Client Agreement. All capitalized terms which are not defined in these Additional Terms shall have the same meaning as in the Client Agreement. In the event of any conflict or inconsistency between the Client Agreement and the provisions of these Terms, the provisions of these Additional Terms US Fractional Shares Trading Services shall prevail to the extent of such conflict or inconsistency.
1. Definitions and Interpretations
1.1. In this Terms, the following expressions, unless the context requires otherwise, shall have the following meanings:
"SEC" means the U.S. Securities and Exchange Commission;
"U.S. Fractional Shares" means the fractional portions (rather than the whole) of shares which are traded or listed on stock exchanges or markets in the U.S.; and
"U.S. Fractional Shares Trading Services" means the services provided by the Company in relation to transactions for U.S. Fractional Shares.
2. Applicable Regulations
2.1. Applicable Rules and Regulations: All Instructions given for U.S. Fractional Shares Trading Services made or entered into by the Company on behalf of the Client, shall be subject to, and the Client shall be bound by:
a) the Client Agreement;
b) applicable Company’s rules, regulations, procedures and policies constantly updated;
c) the Rules of the SEC, the clearing rules and the customs, usages, rulings and procedures of the SEC; and
d) all other Applicable Regulations.
2.2. Conflict: If there is any conflict or inconsistency between any provisions of the Client Agreement on one hand, and anything contained in paragraphs (b), (c) and (d) of Clause 2.1 of this Terms on the other hand, the Company may, in its absolute discretion, take or refuse to take any action, or demand the Client to take or refrain from taking any action, to ensure compliance with the same.
3. Scope of the US Fractional Shares Trading Services
3.1. The Company may, in respect of certain shares in certain markets, at its sole discretion accept and execute Orders for Transactions to buy or sell a fraction of such shares.
4. Capacity
4.1. Instructions regarding shares which are traded or listed on stock exchanges or markets in the U.S. will continue to be handled by the Company in an agency capacity, save that, in respect of the fractional portion, the Company's execution broker will generally act as a counterparty and will execute that portion of a trade as principal or riskless principal.
4.2. The Client will be the beneficial owner of the U.S. Fractional Shares in their Account, and all U.S. Fractional Shares owned by the client will be segregated in the Company’s books and records in the same manner and to the same extent as whole shares.
5. Eligible Fractional Securities and available order types
5.1. The Company will only provide the U.S. Fractional Shares Trading Services in respect of a limited number of securities ("Eligible Fractional Shares").
5.2. The Company may from time to time at its sole discretion adjust the list of Eligible Fractional Shares without notice to the Client. When a particular stock is removed from the list of Eligible Fractional Shares, the Client will be able to sell such stock but will no longer be able to buy such stock. The Company shall at its sole discretion close existing position in stocks that are no longer under the list of Eligible Fractional Shares as soon as practical.
5.3. In the event the Client gives an Instruction for a share which is not an Eligible Fractional Share, the fractional portion may not be executed.
5.4. The Company will only accept certain types of trading orders for U.S. Fractional Shares (e.g., market orders, limit orders, etc.).
6. Non-withdrawable and non-transferable
6.1. U.S. Fractional Shares are non-withdrawable and non-transferable from or to another broker or custodian. However, the Client would be able to combine any U.S. Fractional Shares of the same securities into a whole share, provided that the security in question is an Eligible Fractional Security.
6.2. If the Client wants to transfer its holdings of U.S. shares in an Account to another broker or custodian, the corresponding U.S. Fractional Shares will need to be liquidated before transfer, which may have tax consequences and will result in fees and charges, following which the Client may transfer the remaining whole shares.
7. Shareholder rights for U.S. Fractional Shares
7.1. Voting rights and Rights to receive dividend payments:
7.1.1. Clients will not have voting rights for any of the U.S. Fractional Shares held in their account, will not be able to make voluntary elections on any corporate action (including, without limitation, any tender offers or rights offerings) with respect to such U.S. Fractional Shares, and the Company cannot provide clients any other shareholder documentation for any holdings of less than one Share.
7.1.2. Clients will receive payments of dividends, or in some cases in connection with stock dividends (either dividend shares or value commensurate to the dividend Shares), and will participate normally in any stock splits, mergers or other mandatory corporate actions.
7.1.2.1. Once a Listed Company issues a dividend payment (whether in the form of cash or shares), the Company will, in respect of the Client's U.S. Fractional Shares, arrange for a pro-rated share of the dividend payment to be paid to the Client.
7.1.2.2. The Company is solely responsible for determining the amount of the pro-rated dividend payment payable to the Client and the Client will not have any redress against the Company or the Listed Company issuing the dividend in the event of any disputes. The Client agrees that the Company’s determination of the pro-rated dividend payable to the Client, which shall be based on the Company’s records as at the ex-dividend date of the Listed Company, shall be conclusive in the absence of manifest error.
7.1.2.3. Dividend payment is subject to a minimum amount as prescribed by the Company in its sole discretion. Where the pro-rated dividend to be paid to the Client is below the aforementioned standard, the client may not be able to receive such dividend.
8. Rounding and Restrictions
8.1. All fractional holdings will be rounded down to four decimal places while the Client's cash balance is rounded down to two decimal places. Rounding may affect the Client's ability to be credited for sale proceeds, cash dividends, share dividends and share splits.
8.2. For buy orders, the minimum amount of U.S. Fractional Shares asked and the minimum value of asked shares shall be subject to conditions and restrictions published on the Company’s website and platform.
8.3. The trading hours of U.S. Fractional Shares shall be the time as announced by the Company from time to time on its website.
8.4. Orders of U.S. Fractional Shares are only valid for the day on which it is made.
8.5. U.S. Fractional Shares shall not be lent for the purpose of short-selling, and any other arrangement or scheme of the Company in relation to short-selling shall not apply to U.S. Fractional Shares.
8.6. The Client shall not be able to amend order amount of U.S. Fractional Shares, and orders for whole shares may not be able to be converted to orders for U.S. Fractional Shares.
8.7. The Company may in its sole discretion apply or remove any kind of condition or restriction in relation to U.S. Fractional Shares. The conditions and restrictions published on the website or platform of the Company shall prevail in case of any inconsistency.
8.8. The Company may in its sole discretion reject any instruction or order by the Client in relation to U.S. Fractional Shares and shall not by liable to Client for any loss incurred by such rejection.
9. Risk Disclosures and Acknowledgement
Owning fractional shares is subject to the same risks of owning whole shares, including but not limited to market risks and the specific risks associated with each individual security. The U.S Fractional Shares Trading Services present unique risks and has certain limitations that the Client should understand before using the same.
9.1. Orders to sell may be entered using a fractional share quantity (e.g., 1.543 shares). Orders to buy may use either a fractional quantity or a dollar value (e.g., $150.00). Share quantities can be specified to four decimal places (e.g. .0001). Dollar value orders will be converted into share quantities for execution, likewise, to four decimal places. In all cases, when converting dollar-value orders into share quantities, the share quantities will be rounded down.
9.2. For a variety of reasons, including but not limited to this conversion convention, the actual amount of an executed dollar-value order may be different from the requested amount. The actual amount of an executed order to buy a dollar value of a security may also be lower or higher than the amount requested due to the price movement of the shares in the market and/or fees and commissions charged by the Company.
9.3. All holdings of fractional shares are rounded down to 4 decimal places with the value of fractional shares and any dividends paid on fractional shares rounded down to the nearest cent. Due to such decimal place rounding, clients should understand that this may affect, among other things, their ability to be credited for dividends and stock splits.
9.4. The Company’s U.S Fractional Shares Trading Services functionality only supports certain type of orders and securities. Because of this, fractional trading functionality order types are more restricted than if the Client was to buy or sell traditional whole share quantities.
9.5. The Company’s execution broker will seek best execution for all orders routed to it for handling and execution consistent with its obligations under applicable law, rules, and regulations, by executing the order at the prevailing "national best bid and offer" price, price limit specified by the Client in limit orders or the latest transaction price for whole shares (as the case may be). As such, there may be instances where the final execution prices of U.S Fractional Shares may be different from the prices quoted for whole shares.
9.6. Sales of less than a whole share may not be eligible for "price improvement." Additionally, because in certain situations price improvement on the U.S. Fractional Share component of an order will affect the execution price rather than the share quantity of an order, the effect of the improvement on a dollar-value order in those situations will be to increase or decrease the value of the order outside of what was requested.
9.7. During periods of heavy trading and/or wide price fluctuations, there may be delays in executing the Client's order and the U.S Fractional Shares Trading Services may not be available. In the event of a trading halt of a security, all trading of that security (including the fractional portions thereof) may be halted until trading resumes.
9.8. The prices that are displayed in respect of shares in the electronic trading system are for whole shares and not fractional shares. You acknowledge and understand that the market for fractional shares is significantly less liquid than the market for whole shares and the prices at which orders for fractional shares are executed may be materially different from the prevailing prices for the shares that are displayed in the Company’s electronic trading system.
9.9. By engaging in US Fractional Share Trading Services, you must be acknowledge and understand the unique risks and limitations of such trading, including but not limited to those set forth above, and accept and agree that the Company shall not be held liable for the execution, handling, purchasing and selling of fractional shares for your accounts.
10. Client Ownership
Clients own all fractional share interests allocated to their account. You should consult your own tax, legal and accounting advisors before engaging in any securities transaction, including fractional share transactions. The Company does not provide tax, legal or accounting advice.
11. Miscellaneous Provisions
In the event of any inconsistency between the English version and the Chinese version, the English version shall prevail.