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Instinet, LLC: investment adviser

Instinet, LLC is an investment adviser registered with the SEC (file 801-108490, CRD 7897). What it reports on Form ADV: assets and clients, fees, owners, disciplinary history and its client brochure. From the SEC's Investment Adviser Public Disclosure site; read Oct 21, 2026.

Assets managed: –
Discretionary: –
Accounts: –
Employees: 87
In advisory roles: 0
Disclosures: 60

SEC adviser record · Full Form ADV (PDF)

The firm reports no custody of client cash or securities.

Form ADV Part 1A, Item 5, as filed on the SEC Investment Adviser Public Disclosure site; read Oct 21, 2026.

Clients and fees

Whom the firm advises and how it is paid, from Items 5.D, 5.E and 5.G.

No client types read.

How it is paid

Other: Negotiated fees for research - related services

Services

Other: RESEARCH-RELATED SERVICES

Who owns it

Schedule A lists direct owners of 5% or more (and officers who own a stake); Schedule B lists the owners of those owners.

Direct owners (Schedule A)

Owner	Type	Role	Stake	Since	Control	Public company
Instinet Holdings Incorporated	Company (U.S.)	Direct owner	E 75% or more	Dec 2005	Yes

Indirect owners (Schedule B)

Owner	Owns a stake in	Type	Stake	Control	Public company
Instinet Incorporated	Instinet	Company (U.S.)	E 75% or more	Yes
Nomura Holding America Inc.	Instinet	Company (U.S.)	E 75% or more	Yes

Form ADV reports ownership in bands, not exact stakes: A means 5% to 10%, B 10% to 25%, C 25% to 50%, D 50% to 75%, E 75% or more. F marks a general partner, trustee or managing member, a role that controls the firm without a percentage. Owners of less than 5% are not listed.

Form ADV Schedules A and B, via the SEC Investment Adviser Public Disclosure site.

Disciplinary history

What the firm disclosed under Item 11 of Form ADV. A disclosure is the firm's own report: pending matters are allegations, not findings, and many settlements are made without admitting or denying them. Text is quoted from the filing, set in sentence case.

Item 11 questions answered Yes

These questions cover the firm and its advisory affiliates.

Has the SEC or the Commodity Futures Trading Commission (CFTC) ever: found you or any advisory affiliate to have been involved in a violation of SEC or CFTC regulations or statutes?
Has the SEC or the Commodity Futures Trading Commission (CFTC) ever: entered an order against you or any advisory affiliate in connection with investment-related activity?
Has the SEC or the Commodity Futures Trading Commission (CFTC) ever: imposed a civil money penalty on you or any advisory affiliate, or ordered you or any advisory affiliate to cease and desist from any activity?
Has any other federal regulatory agency, any state regulatory agency, or any foreign financial regulatory authority: ever found you or any advisory affiliate to have been involved in a violation of investment-related regulations or statutes?
Has any other federal regulatory agency, any state regulatory agency, or any foreign financial regulatory authority: ever found you or any advisory affiliate to have been a cause of an investment-related business having its authorization to do business denied, suspended, revoked, or restricted?
Has any other federal regulatory agency, any state regulatory agency, or any foreign financial regulatory authority: in the past ten years, entered an order against you or any advisory affiliate in connection with an investment-related activity?
Has any other federal regulatory agency, any state regulatory agency, or any foreign financial regulatory authority: ever denied, suspended, or revoked your or any advisory affiliate's registration or license, or otherwise prevented you or any advisory affiliate, by order, from associating with an investment-related business or restricted your or any advisory affiliate's activity?
Has any self-regulatory organization or commodities exchange ever: found you or any advisory affiliate to have been involved in a violation of its rules (other than a violation designated as a "minor rule violation" under a plan approved by the SEC)?
(1) Has any domestic or foreign court: ever found that you or any advisory affiliate were involved in a violation of investment-related statutes or regulations?

Actions about the firm (37)

Apr 11, 2018
Regulatory Action: Box Options Exchange LLC FinalFine: $20,400 · Begun Apr 11, 2018 · Resolved Apr 11, 2018 · Acceptance, Waiver & Consent(AWC) · Docket 2013036836014
Alleged non-compliance with a certain system of risk management controls andexchange rules consisting of definitional requirements and related supervision.
The firm was censured and fined a total of $1,575,000 of which $20,400 was paid to box;and undertakes to address its deficiencies and revise its written supervisory procedures.
Apr 11, 2018
Regulatory Action: FINRA FinalFine: $59,500 · Begun Apr 11, 2018 · Resolved Apr 11, 2018 · Acceptance, Waiver & Consent(AWC) · Docket 2013036836015
Alleged non-compliance with a certain system of risk management controls and exchange rules consisting of definitional requirements and related supervision.
The firm was censured and fined a total of $1,575,000 of which $59,500 was paid to FINRA;and undertakes to address its deficiencies and revise its written supervisory procedures.
Apr 11, 2018
Regulatory Action: Investors' Exchange LLC FinalFine: $75,000 · Begun Apr 11, 2018 · Resolved Apr 11, 2018 · Acceptance, Waiver & Consent(AWC) · Docket 2013036836016
Alleged non-compliance with a certain system of risk management controls and exchange rules consisting of definitional requirements and related supervision.
The firm was censured and fined a total of $1,575,000 of which $75,000 was paid to iex;and undertakes to address its deficiencies and revise its written supervisory procedures.
Apr 11, 2018
Regulatory Action: Nasdaq PHLX LLC FinalFine: $59,700 · Begun Apr 11, 2018 · Resolved Apr 11, 2018 · Acceptance, Waiver & Consent(AWC) · Docket 2013036836003
Alleged non-compliance with a certain system of risk management controls and exchange rules consisting of definitional requirements and related supervision.
The firm was censured and fined a total of $1,575,000 of which $59,700 was paid to PHLX;and undertakes to address its deficiencies and revise its written supervisory procedures.
Apr 11, 2018
Regulatory Action: Nasdaq BX, Inc. FinalFine: $67,000 · Begun Apr 11, 2018 · Resolved Apr 11, 2018 · Acceptance, Waiver & Consent(AWC) · Docket 2013036836002
Alleged non-compliance with a certain system of risk management controls and exchange rules consisting of definitional requirements and related supervision.
The firm was censured and fined a total of $1,575,000 of which $67,000 was paid to BX; and undertakes to address its deficiencies and revise its written supervisory procedures.
Apr 11, 2018
Regulatory Action: Nasdaq Stock Market FinalFine: $189,700 · Begun Apr 11, 2018 · Resolved Apr 11, 2018 · Acceptance, Waiver & Consent(AWC) · Docket 2013036836001
Alleged non-compliance with a certain system of risk management controls and exchange rules consisting of definitional requirements and related supervision.
The firm was censured and fined a total of $1,575,000 of which $189,700 was paid to Nasdaq;and undertakes to address its deficiencies and revise its written supervisory procedures.
Without admitting or denying the findings, the firm consents to the sactions and to the entry of the findings that it was non- compliant with a certain system of risk management controls and exchange rules consisting of definitional requirements and related supervision.
Apr 11, 2018
Regulatory Action: Nasdaq Options Market LLC FinalFine: $7,300 · Begun Apr 11, 2018 · Resolved Apr 11, 2018 · Acceptance, Waiver & Consent(AWC) · Docket 2013036836004
Alleged non-compliance with a certain system of risk management controls and exchange rules consisting of definitional requirements and related supervision.
The firm was censured and fined a total of $1,575,000 of which $7,300 was paid to Nasdaq Options Market LLC and undertakes to address its deficiencies and revise its written supervisory procedures.
Apr 11, 2018
Regulatory Action: NYSE ARCA, Inc. FinalFine: $77,100 · Begun Apr 11, 2018 · Resolved Apr 11, 2018 · Decision & Order of Offer of Settlement · Docket 2013036836009
Alleged non-compliance with a certain system of risk management controls and exchange rules consisting of definitional requirements and related supervision.
The firm was censured and fined $77,100 paid to NYSE ARCA inc., and undertakes to address its deficiencies and revise its written supervisory procedures.
Without admitting or denying the findings, the firm accepted the offer of settlement and consents to pay a fine total of $1,575,000, of which $77,100 was paid to NYSE ARCA inc.
Apr 11, 2018
Regulatory Action: NYSE ARCA, Inc. FinalFine: $276,100 · Begun Apr 11, 2018 · Resolved Apr 11, 2018 · Decision & Order of Offer of Settlement · Docket 2013036836010
Alleged non-compliance with a certain system of risk management controls and exchange rules consisting of definitional requirements and related supervision.
The firm was censured and fined $276,100 paid to NYSE ARCA equities inc., and undertakes to address its deficiencies and revise its written supervisory procedures.
Without admitting or denying the findings, the firm accepted the offer of settlement and consents to pay a fine total of $1,575,000, of which $276,100 was paid to NYSE ARCA equities inc.
Mar 17, 2018
Regulatory Action: New York Stock Exchange FinalFine: $195,600 · Begun Feb 15, 2018 · Resolved Mar 17, 2018 · Acceptance, Waiver & Consent(AWC) · Docket 2013036836011
Alleged non-compliance with a certain system of risk management controls and exchange rules consisting of definitional requirements and related supervision.
The firm was censured and fined a total of $1,575,000 of which $195,600 was paid to the New York Stock Exchange; and undertakes to address its deficiencies and revise its written supervisory procedures.
Without admitting or denying the findings, the firm accepted the offer of settlement and consents to pay a fine total of $1,575,000, of which $195,600 was paid to New York Stock Exchange.
Mar 17, 2018
Regulatory Action: NYSE American LLC FinalFine: $47,800 · Begun Feb 15, 2018 · Resolved Mar 17, 2018 · Acceptance, Waiver & Consent(AWC) · Docket 2013036836012
Alleged non-compliance with a certain system of risk management controls and exchange rules consisting of definitional requirements and related supervision.
The firm was censured and fined a total of $1,575,000 of which $47,800 was paid to NYSE American; and undertakes to address its deficiencies and revise its written supervisory procedures.
Without admitting or denying the findings, the firm accepted the offer of settlement and consents to pay a fine total of $1,575,000, of which $47,800 was paid to NYSE American LLC.
Mar 7, 2018
Regulatory Action: Bats BZX Exchange, Inc. FinalFine: $5,700 · Begun Feb 6, 2018 · Resolved Mar 7, 2018 · Acceptance, Waiver & Consent(AWC) · Docket 20160499339-02
Alleged non-compliance with certain professional customer and exchange rules regarding the definitional requirements of professional customer orders and related supervision.
The firm was censured and fined $125,000 of which $5,700.00 was paid to BZX and the remainder of the fine total paid to the CBOE exchange, inc. and undertakes to revise its written supervisory procedures.
Without admitting or denying the findings, the firm consented to the sanctions and to the entry of the findings that it was non- compliant with certain professional customer and exchange rules regarding the definitional requirements of professional customer orders and related supervision.
Mar 7, 2018
Regulatory Action: CBOE Byx Exchange, Inc. FinalFine: $79,700 · Begun Mar 7, 2018 · Resolved Mar 7, 2018 · Acceptance, Waiver & Consent(AWC) · Docket 2013036836005
Alleged non-compliance with a certain system of risk management controls and exchange rules consisting of definitional requirements and related supervision.
The firm was censured and fined a total of $1,575,000 of which $79,700 was paid to CBOE Byx Exchange, Inc. and undertakes to address its deficiencies and revise its written supervisory procedures.
Without admitting or denying the findings, the firm was censured and fined a total of $1,575,000 of which $79,700 was paid to CBOE Byx Exchange, Inc. and undertakes to address its deficiencies and revise its written supervisory procedures.
Mar 7, 2018
Regulatory Action: CBOE BZX Exchange, Inc. FinalFine: $169,100 · Begun Mar 7, 2018 · Resolved Mar 7, 2018 · Acceptance, Waiver & Consent(AWC) · Docket 2013036836006
Alleged non-compliance with a certain system of risk management controls and exchange rules consisting of definitional requirements and related supervision.
The firm was censured and fined a total of $1,575,000 of which $169,100 was paid to CBOE BZX Exchange, Inc. and undertakes to address its deficiencies and revise its written supervisory procedures.
Without admitting or denying the findings, the firm was censured and fined a total of $1,575,000 of which $169,100 was paid to CBOE byx exchange, inc. and undertakes to address its deficiencies and revise its written supervisory procedures.
Mar 7, 2018
Regulatory Action: CBOE Edgx Exchange, Inc. FinalFine: $67,000 · Begun Mar 7, 2018 · Resolved Mar 7, 2018 · Acceptance, Waiver & Consent(AWC) · Docket 2013036836008
Without admitting or denying the findings, the firm consents to the sactions and to the entry of the findings that it was non- compliant with with a certain system of risk management controls and exchange rules consisting of definitional requirements and related supervision.
The firm was censured and fined a total of $1,575,000 of which $67,000 was paid to CBOE Edgx Exchange, Inc. and undertakes to address its deficiencies and revise its written supervisory procedures.
Without admitting or denying the findings, the firm was censured and fined a total of $1,575,000 of which $67,000 was paid to CBOE Edgx Exchange, Inc. and undertakes to address its deficiencies and revise its written supervisory procedures.
Mar 7, 2018
Regulatory Action: CBOE Edga Exchange, Inc. FinalFine: $124,300 · Begun Mar 7, 2018 · Resolved Mar 7, 2018 · Acceptance, Waiver & Consent(AWC) · Docket 2013036836007
Without admitting or denying the findings, the firm consents to the sactions and to the entry of the findings that it was non- compliant with with a certain system of risk management controls and exchange rules consisting of definitional requirements and related supervision.
He firm was censured and fined a total of $1,575,000 of which $124,300 was paid to CBOE Edga Exchange, Inc. and undertakes to address its deficiencies and revise its written supervisory procedures.
Without admitting or denying the findings, the firm was censured and fined a total of $1,575,000 of which $124,300 was paid to CBOE Edga Exchange, Inc. and undertakes to address its deficiencies and revise its written supervisory procedures.
Feb 15, 2018
Regulatory Action: NYSE American LLC FinalFine: $59,700 · Begun Feb 15, 2018 · Acceptance, Waiver & Consent(AWC) · Docket 2013036836013
Alleged non-compliance with a certain system of risk management controls and exchange rules consisting of definitional requirements and related supervision.
The firm was censured and fined a total of $1,575,000 of which $59,700 was paid to NYSE American LLC (EQUITIES) and undertakes to address its deficiencies and revise its written supervisory procedures.
Without admitting or denying the findings, the firm accepted the offer of settlement and consents to pay a fine total of $1,575,000, of which $59,700 was paid to NYSE American LLC (EQUITIES).
Feb 5, 2018
Regulatory Action: CBOE Exchange, Inc. FinalFine: $119,300 · Begun Jan 8, 2018 · Resolved Feb 5, 2018 · Consent · Docket 18-0001/20160499339
Alleged non-compliance with a certain professional customer and exchange rules regarding the definitional requirements of professional customer orders and related supervision.
The firm was censured and fined $125,000 of which $119,300.00 was paid to CBOE Exchange, Inc. and the remainder of the fine total paid to the bats BZX exchange, inc. and undertakes to revise its written supervisory procedures.
Without admitting or denying the findings, the firm consented to the sanctions and to the entry of the findings that it was non- complianct with certain professional customer and exchange rules regarding the definitional requirements of professional customer orders and related supervision.
Jul 21, 2017
Regulatory Action: Bats Byx Exchange, Inc. FinalFine: $20,625 · Begun Jun 22, 2017 · Resolved Jul 21, 2017 · Acceptance, Waiver & Consent(AWC) · Docket 2013037651702
Alleged non-compliance with certain regulatory NMS and Bats byx rules regarding the definitional requirements of intermarket sweep orders and related supervision.
The firm is censured, fined $20,625 and undertakes to revise its written supervisory procedures.
Without admitting or denying the findings, the firm consented to the sanctions and to the entry of the findings that it was non- compliant with certain regulatory NMS and Bats byx rules regarding the definitional requirements of intermarket sweep orders and related supervision.
Jun 29, 2017
Regulatory Action: NYSE ARCA, Inc. FinalFine: $78,375 · Begun Jun 29, 2017 · Resolved Jun 29, 2017 · Acceptance, Waiver & Consent(AWC) · Docket 2013037651706
Alleged non-compliance with certain regulatory NMS and NYSE ARCA rules regarding the definitional requirements of intermarket sweep orders and related supervision.
The firm was censured, fined $78,375 and undertakes to revise its written supervisory procedures.
Without admitting or denying the findings, the firm consented to the sanctions and to the entry of the findings that it was non- compliant with certain regulatory NMS and NYSE ARCA rules regarding the definitional requirements of intermarket sweep orders and related supervision.
Jun 29, 2017
Regulatory Action: FINRA FinalFine: $78,375 · Begun Jun 29, 2017 · Resolved Jun 29, 2017 · Acceptance, Waiver & Consent(AWC) · Docket 2013037651705
Alleged non-compliance with certain regulatory NMS and FINRA rules regarding the definitional requirements of intermarket sweep orders and related supervision.
The firm is censured, fined $78,375 and undertakes to revise its written supervisory procedures.
Without admitting or denying the findings, the firm consented to the sanctions and to the entry of the findings that it was non- compliant with certain regulatory NMS and FINRA rules regarding the definitional requirements of intermarket sweep orders and related supervision.
Jun 19, 2017
Regulatory Action: Bats Edgx Exchange, Inc. FinalFine: $16,500 · Begun Jun 19, 2017 · Resolved Jun 19, 2017 · Acceptance, Waiver & Consent(AWC) · Docket 2013037651704
Alleged non-compliance with certain regulatory NMS and edgx rules regarding the definitional requirements of intermarket sweep orders and related supervision.
The firm is censured, fined $16,500 and undertakes to revise its written supervisory procedures.
Without admitting or denying the findings, the firm consented to the sanctions and to the entry of the findings that it was non- compliant with certain regulatory NMS and Bats edgx rules regarding the definitional requirements of intermarket sweep orders and related supervision.
Jun 19, 2017
Regulatory Action: Bats Edga Exchange, Inc. FinalFine: $57,750 · Begun Jun 19, 2017 · Resolved Jun 19, 2017 · Acceptance, Waiver & Consent(AWC) · Docket 2013037651703
Alleged non-compliance with certain regulatory NMS and Bats edga rules regarding the definitional requirements of intermarket sweep orders and related supervision.
The firm is censured, fined $57,750 and undertakes to revise its written supervisory procedures.
Without admitting or denying the findings, the firm consented to the sanctions and to the entry of the findings that it was non- compliant with certain regulatory NMS and Bats edga rules regarding the definitional requirements of intermarket sweep orders and related supervision.
Jun 19, 2017
Regulatory Action: New York Stock Exchange, LLC. FinalFine: $57,750 · Begun May 23, 2017 · Resolved Jun 19, 2017 · Acceptance, Waiver & Consent(AWC) · Docket 2013037651707
Alleged non-compliance with certain regulatory NMS and NYSE rules regarding the definitional requirements of intermarket sweep orders and related supervision.
The firm was censured, fined $57,750 and undertakes to revise its written supervisory procedures.
Without admitting or denying the findings, the firm consented to the sanctions and to the entry of the findings that it was non- compliant with certain regulatory NMS and NYSE rules regarding the definitional requirements of intermarket sweep orders and related supervision.
Apr 20, 2016
Regulatory Action: FINRA FinalFine: $12,500 · Begun Apr 20, 2016 · Resolved Apr 20, 2016 · Acceptance, Waiver & Consent(AWC) · Docket 2014042109401
FINRA alleged violations of improperly reporting certain OATS reports to the order audit trail system with a reporting exception code of m that were required to match a related trade report.
The firm is censured and fined $12,500.00.
Apr 5, 2016
Regulatory Action: FINRA FinalFine: $115,000 · Begun Apr 5, 2016 · Resolved Apr 5, 2016 · Acceptance, Waiver & Consent(AWC) · Docket 2013038371401
FINRA alleged violations of FINRA and SEC rules resulting from inaccurate capacity disclosures for certain trades related to errors (representing less than 0.1 % of the firms ATS volume) and corresponding supervision.
$115,000 and undertaking to resolve certain policies and procedures.
Without admitting or denying the findings , the firm consented to the entry of FINRA's findings and sanctions. The findings stated that the orders related to this matter involved less than 0.1% of the firms ATS volume. The findings also stated that there is no evidence that the firms orders received any preferential treatment or trading advantage over any other order in the system.
May 5, 2015
Regulatory Action: FINRA FinalFine: $15,000 · Begun May 5, 2015 · Resolved May 5, 2015 · Acceptance, Waiver & Consent(AWC) · Docket 2013035825401
Alleged non-adjustment of open limit orders, in a minimal number of instances and inadequate written supervisory procedures involving a limited number of trading rules.
$15,000 and undertakes to revise its WSPS.
Dec 29, 2014
Regulatory Action: FINRA FinalFine: $20,000 · Begun Dec 29, 2014 · Resolved Dec 29, 2014 · Acceptance, Waiver & Consent(AWC) · Docket 2011029293401
Alleged effecting of a limited number of transactions during a trading halt.
The firm was censured and fined $20,000.
Dec 19, 2014
Regulatory Action: Nasdaq Stock Market FinalFine: $142,500 · Begun Dec 19, 2014 · Resolved Dec 19, 2014 · Acceptance, Waiver & Consent(AWC) · Docket 2010023896602
Alleged non-compliance with certain regulation NMS and Nasdaq rules regarding the definitional requirements of intermarket sweep orders and related supervision.
The firm was censured, fined $142,500 and undertakes to revise the its written supervisory procedures.
Dec 4, 2014
Regulatory Action: Edga Exchange, Inc. FinalFine: $42,500 · Begun Dec 4, 2014 · Resolved Dec 4, 2014 · Acceptance, Waiver & Consent(AWC) · Docket 2010023896601
Alleged non-compliance with certain regulation NMS and Edga rules regarding the definitional requirements of intermarket sweep orders and related supervision.
The firm was censured, fined $42,500 and undertakes to revise the firm's written supervisory procedures.
Please see question 7.
Nov 20, 2014
Regulatory Action: FINRA FinalFine: $12,500 · Begun Nov 20, 2014 · Resolved Nov 20, 2014 · Acceptance, Waiver & Consent(AWC) · Docket 2010022632402
Alleged non-compliance with certain Regulation SHO rules in a limited number of instances. Fail to deliver positions were not closed within the time frame prescribed by the rule for two instances of sales marked long and two instances of sales that the seller was deemed to own.
The firm was censured and fined $12,500.
Please see question 7.
Feb 27, 2014
Regulatory Action: Chicago Board Options Exchange, Incorporated FinalSanctions: Censure; Fine · Fine: $20,000 · Begun Dec 11, 2013 · Resolved Feb 27, 2014 · Decision & Order of Offer of Settlement · Docket 13-0066
Alleged non-registration of (1) a limited number of firm personnel in the categories of (a) proprietary trader, (b) proprietary trader principal and (c) proprietary trader compliance officer, and (2) the minimum number of individuals required to be registered as proprietary trader principal with the CBOE by November 5, 2011.
Fine was $20,000 and it was paid on 3/20/14
Please see question 7.
Dec 26, 2013
Regulatory Action: SEC FinalSanctions: Cease and Desist; Censure, civil and administrative penalty(IES)/fine(s) · Fine: $375,000 · Begun Dec 26, 2013 · Resolved Dec 26, 2013 · Settled · Docket ADMINISTRATIVE PROCEEDING FILE NO. 3-15663
On December 26, 2013, Instinet entered into a settlement, without admitting or denying any findings, with the U.S. Securities and Exchange Commission ("SEC"). The SEC found that Instinet, from January 2009 through July 2010, paid approximately $430,000 in client commission credits called "soft dollars" as requested by its customer, j.s oliver capital management, L.P. ("JS oliver"), a san diego-based investment adviser, for expenses that JS oliver had not properly disclosed to its clients. The SEC found that the improper payments included $329,365 to the ex-wife of JS oliver's president, ian o. Mausner; thirteen months of increased rent payments totaling $65,000 for JS oliver's offices at mausner's home; and two payments totaling $40,094.54 for upkeep on mausner's New York city timeshare.
The settlement resulted in the SEC issuing an order instituting administrative and cease and desist proceedings pursuant to section 15(b) of the Securities Exchange Act of 1934 and section 203(k) of the Investment Advisers Act of 1940, making findings, and imposing remedial sanctions and a cease-and-desist order against Instinet on December 26, 2013 (the "order"). The order found that Instinet willfully aided and abetted and caused J.S. Oliver's violations of sections 206(2) and (4) of the Investment Advisers Act of 1940 and rule 206(4)-8 thereunder. Instinet was ordered to cease and desist from committing or causing any violations and any future violations of sections 206(2) and 206(4) of the Advisers Act and rule 206(4)-8 thereunder and was censured. The order also required Instinet to pay disgorgement of $378,673.76, prejudgment interest of $59,607.66, and a civil money penalty in the amount of $375,000, which was paid on December 31, 2013. In addition, Instinet undertook to retain an independent consultant to (a) conduct a comprehensive review of Instinet's policies, procedures, and practices related to its payment of soft dollars as part of its client commission services (collectively, "policies and procedures"); and (b) make recommendations for changes in or improvements to the policies and procedures to prevent Instinet from aiding and abetting and causing an investment adviser's violations of sections 206(2) and 206(4) of the Advisers Act and rule 206(4)-8 thereunder with respect to soft dollars.
In settlement of this action, Instinet, without admitting or denying any findings, consented to the SEC's entry of the order, the allegations, dispositions, findings and sanctions of which are described above in items 7 and 12.
Dec 26, 2013
Regulatory Action: SEC FinalSanctions: Cease and Desist; Censure, civil and administrative penalty(IES)/fine(s) · Fine: $375,000 · Begun Dec 26, 2013 · Resolved Dec 26, 2013 · Settled · Docket ADMINISTRATIVE PROCEEDING FILE NO. 3-15663
On December 26, 2013, Instinet entered into a settlement, without admitting or denying any findings, with the U.S. Securities and Exchange Commission ("SEC"). The SEC found that Instinet, from January 2009 through July 2010, paid approximately $430,000 in client commission credits called "soft dollars" as requested by its customer, j.s oliver capital management, L.P. ("JS oliver"), a san diego-based investment adviser, for expenses that JS oliver had not properly disclosed to its clients. The SEC found that the improper payments included $329,365 to the ex-wife of JS oliver's president, ian o. Mausner; thirteen months of increased rent payments totaling $65,000 for JS oliver's offices at mausner's home; and two payments totaling $40,094.54 for upkeep on mausner's New York city timeshare.
The settlement resulted in the SEC issuing an order instituting administrative and cease and desist proceedings pursuant to section 15(b) of the Securities Exchange Act of 1934 and section 203(k) of the Investment Advisers Act of 1940, making findings, and imposing remedial sanctions and a cease-and-desist order against Instinet on December 26, 2013 (the "order"). The order found that Instinet willfully aided and abetted and caused J.S. Oliver's violations of sections 206(2) and (4) of the Investment Advisers Act of 1940 and rule 206(4)-8 thereunder. Instinet was ordered to cease and desist from committing or causing any violations and any future violations of sections 206(2) and 206(4) of the Advisers Act and rule 206(4)-8 thereunder and was censured. The order also required Instinet to pay disgorgement of $378,673.76, prejudgment interest of $59,607.66, and a civil money penalty in the amount of $375,000, which was paid on December 31, 2013. In addition, Instinet undertook to retain an independent consultant to (a) conduct a comprehensive review of Instinet's policies, procedures, and practices related to its payment of soft dollars as part of its client commission services (collectively, "policies and procedures"); and (b) make recommendations for changes in or improvements to the policies and procedures to prevent Instinet from aiding and abetting and causing an investment adviser's violations of sections 206(2) and 206(4) of the Advisers Act and rule 206(4)-8 thereunder with respect to soft dollars.
In settlement of this action, Instinet, without admitting or denying any findings, consented to the SEC's entry of the order, the allegations, dispositions, findings and sanctions of which are described above in items 7 and 12.
Mar 12, 2013
Regulatory Action: FINRA FinalSanctions: Censure; Fine · Fine: $7,500 · Begun Mar 12, 2013 · Resolved Mar 12, 2013 · Acceptance, Waiver & Consent(AWC) · Docket 20110261103-01
Alleged violations of NASD rule 6130 and FINRA 7230a by reporting incorrect capacity codes, counterparties, and buy/sell codes to FINRA/Nasdaq trade reporting facility for certain transactions between April 2008 and September 2010.
Without admitting or denying findings , the firm consented to the imposition of a censure and paid a fine of $7,500 on March 27, 2013
Feb 15, 2012
Regulatory Action: FINRA FinalSanctions: Censure; Fine · Fine: $50,000 · Begun Feb 15, 2012 · Resolved Feb 15, 2012 · Acceptance, Waiver & Consent(AWC) · Docket 2009017180301
FINRA alleged that the firm failed to prohibit executions in short sales subject to the SEC emergency order pursuant to section 12(k)(2) of the securities and Exchange Act of 1934 on certain dates during September 2008.
Without admitting or denying the findings, the firm consented to the imposition of a censure and paid a fine of $50,000 on February 22, 2012.
Sep 20, 2011
Regulatory Action: FINRA FinalFine: $7,500 · Begun Sep 20, 2011 · Resolved Sep 20, 2011 · Acceptance, Waiver & Consent(AWC) · Docket 2009018535701
Alleged violations of FINRA rule 7450. FINRA alleged that during Q1 2009, Instinet, LLC: 1)failed to repair rejected reportable order events ("ROES") that were repairable within the required five business days; and 2) failed to transmit ROES to the order audit trail system("OATS")that were rejected by OATS for context or syntax errors.
Without admitting or denying the findings, the firm consented to the imposition of sanctions and paid a $7,500 fine on September 27, 2011.

Actions about affiliates (18)

May 15, 2015
Civil Judicial Action On appealAbout an affiliate: Nomura Securities; the full record is on the affiliate's own Form ADVBegun Sep 2, 2011 · Resolved May 15, 2015
The federal housing finance agency (FHFA), as conservator for the federal national mortgage association (fannie mae) and the federal home loan mortgage corporation (freddie mac) filed a complaint against Nomura holding america inc., Nomura asset acceptance corporation, Nomura home equity loan, inc., Nomura credit & capital, inc., Nomura Securities international, inc., certain of their officers and an unaffiliated underwriter. The suit asserts claims pursuant to sections 11, 12, and 15 of the Securities Act of 1933, state securities law and state common law in connection with the sale of residential mortgage-backed securities to fannie mae and freddie mac. The suit alleges that the registration statements for such securities contained misstatements and omissions concerning the underlying mortgages.
Dec 30, 2013
Regulatory Action: The Singapore Stock Exchange FinalAbout an affiliate: Instinet SingaporeFine: $1,000 · Begun Dec 30, 2013 · Resolved Dec 30, 2013 · Decision · Docket N/A
Alleged breach of Singapore exchange trade reporting rules.
Fine was paid January 3, 2014
The Singapore exchange (SGX)alleged breaches of trade reporting rules for not reporting two off-market trades on June 12, 2013 and August 29, 2013 within 20 minutes of the opening on the next market day.
Aug 20, 2013
Regulatory Action: Consob FinalAbout an affiliate: Instinet Europe LimitedFine: $163,980 · Begun Dec 21, 2012 · Resolved Aug 20, 2013 · Decision · Docket N/A
Alleged breach of italian short sale regulation
Fine was paid 9/24/13 (120,000.00 euro)
Consob alleged breaches of italian short sale regulations in connection with the untimely settlement of transactions between January 9, 2012 and January 20, 2012 by an indirect client of iel.
Jan 14, 2013
Regulatory Action: Borsa Italia FinalAbout an affiliate: Instinet Europe LimitedFine: $68,369 · Begun Dec 21, 2012 · Resolved Jan 14, 2013 · Decision · Docket N/A
Alleged breach of italian short sale regulation
Fine was paid 5/31/13. 50,000.00 euro.
Consob alleged breaches of italian short sale regulations in connection with the untimely settlement of transactions between January 9, 2012 and January 20, 2012 by an indirect client of iel.
Dec 3, 2012
Regulatory Action: Financial Supervisory Service of Korea & Financial Services Commission of Korea. FinalAbout an affiliate: Instinet Pacific Ltd.Sanctions: Civil and Administrative Penalt(ies) /Fine(s) · Fine: $46,975 · Begun Sep 7, 2012 · Resolved Dec 3, 2012 · Decision · Docket N/A
Alleged breaches of korean short sale regulation
$50,000,000 (usd$46,974.83) fine. Paid 12/18/2012
Financial supervisory service (FSS) of korea alleged breaches of koran short sale regulations. Financial services commission (FSC) of korea found breaches of local short sale rules in connection with the execution of to customer odd lot trades between January 2, 2010 and May 31, 2012.
Nov 12, 2012
Regulatory Action: CME Group FinalAbout an affiliate: Nomura Securities Co., LtdSanctions: Civil and Administrative Penalt(ies) /Fine(s) · Fine: $50,000 · Begun Nov 12, 2012 · Resolved Nov 12, 2012 · Settled · Docket COMEX 11-08603-BC
Pursuant to an offer of settlement that Nomura Securities Co., Ltd. ("Nomura") presented at a hearing, two traders employed by Nomura prearranged five trades totaling 600 lots of December 2011 gold futures contracts for the purpose of transferring positions between two proprietary accounts with common beneficial ownership as part of Nomura's migration of its commodities business, including positions used for hedging, from its fixed income department to its equities department. The panel also found that the trades were executed on globex with the buy and sell orders being entered less than 5 seconds apart. The panel also found that Nomura failed to diligently supervise its traders in a manner sufficient to ensure that they were familiar with exchange rules such as through appropriate compliance training. The panel found that as a result of the foregoing, Nomura violated exchange rules 432.w., 534 and 539.a. And c.
Without admitting or denying the rule violations, Nomura paid the $50,000 fine on 11/20/2012
Oct 31, 2012
Regulatory Action: Osaka Securities Exchange FinalAbout an affiliate: Nomura Securities Co., LtdSanctions: Other · Fine: $200,000 · Begun Oct 31, 2012 · Resolved Oct 31, 2012 · Consent · Docket N/A
Disciplinary action pursuant to rule 42(1)(IX) of the regulations for transaction particpants, in connection with a failure to take necessary and appropriate measures to prevent illegal trading by taking sufficient measures to protect confidential information relating to the public offering of new shares.
Nomura Securities Co., Ltd. was fined 16 million yen (approx $200,000)
Oct 31, 2012
Regulatory Action: Tokyo Stock Exchange FinalAbout an affiliate: Nomura Securities Co., LtdSanctions: Other · Fine: $2.4M · Begun Oct 31, 2012 · Resolved Oct 31, 2012 · Consent · Docket N/A
Disciplinary action pursuant to rule 34, paragraph 2 of the trading partcipant regulations, in connection with a failure to take necessary and appropriate measures to prevent illegal trading by taking sufficient measures to protect confidential information relating to the public offering of new shares.
Nomura Securities Co., Ltd. was fined 200 million yen (approx $2,400,000).
Oct 16, 2012
Regulatory Action: The Japanese Securities Dealers Association FinalAbout an affiliate: Nomura Securities Co., LtdSanctions: Other · Fine: $3.8M · Begun Oct 16, 2012 · Resolved Oct 16, 2012 · Consent · Docket N/A
Violations of article 28, paragraph 1, of the association's articles of incorporation and recommendation based on article 29 of the articles of incorporation, in connection with a failure to take necessary and appropriate measures to prevent illegal trading by taking sufficient measures to protect confidential information relating to the public offering of new shares.
Nomura Securities Co., Ltd. was fined 300 million yen (approx $3,800,000)and admonished by the japanese financial services agency in a related action.
Nov 16, 2009
Regulatory Action: Financial Services Authority (FSA) FinalAbout an affiliate: Nomura International PLC.Sanctions: Civil and Administrative Penalt(ies) /Fine(s) · Fine: $2.9M · Begun Dec 15, 2008 · Resolved Nov 16, 2009 · Consent · Docket WS00118
Nomura International PLC. Failed to conduct its business with due skill, care and diligence and failed to take reasonable care to organize and control its affairs reasonably and effectively with adequate risk management systems.
£1.75 million the penalty imposed is discounted by 30% pursuant to the stage 1 early settlement discount scheme. Were it not for the discount, the FSA would have imposed a financial penalty of £2.5 million.
The event or proceeding occurred more than ten years ago
Jul 31, 1998
Regulatory Action: The Financial Supervisory Agency of Japan ("Fsaj") FinalAbout an affiliate: Nomura Securities Co., Ltd.Sanctions: Civil and Administrative Penalt(ies) /Fine(s) · Begun Jul 31, 1998 · Resolved Jul 31, 1998 · Other · Docket FSAJ 199
The fsaj instructed the Nomura Securities Co., Ltd. ("Nomura tokyo") and three other japanese securities companies and 9 leading japanese banks to strengthen their respective internal controls, following an industry-wide investigation by fsaj of the practice of excessively entertaining public officials. In particular fsaj instructed Nomura tokyo among others to take the following steps in order to strengthen its internal controls: (1) to enhance the awareness of compliance policies and procedures among its management and employees, (2) to implement measures designed to prevent the reoccurrence of excessive entertainment practices, (3) to improve its internal compliance systems and (4) to strengthen its internal controls on entertainment expenses. In this connection, fsaj further instructed Nomura tokyo to submit to fsaj a comprehensive operational plan setting forth specific measures in respect of (1) through (4) above and the time by with such measures would be implemented by September 30, 1998. The foregoing instructions of fsaj to Nomura tokyo were issued by way of administrative guidance based on fsaj's general supervisory power over securities companies licensed in Japan (including Nomura tokyo).
The event or proceeding occurred more than ten years ago
Jul 30, 1997
Regulatory Action: Ministry of Finance ("Mof") of Japan, Tokyo Stock Exchange and 7 Other Japanese Stock Exchanges. FinalAbout an affiliate: Nomura Securities Co., Ltd.Sanctions: Other; Monetary penalties/fines · Begun Jul 30, 1997 · Resolved Jul 30, 1997 · Consent
Alleged conferring of undue profits to a shareholder/client of Nomura tokyo, including discretionary securities trading for his benefit, for the purpose of rewarding him for cooperation with Nomura tokyo in ensuring the smooth conduct of an annual shareholders' meeting.
On June 30, 1997, mof of Japan ordered the Nomura Securities Co., Ltd. ("Nomura tokyo") to suspend (1) equity related proprietary transactions including trades in stocks, warrants, convertible bonds, index futures and securities options (with certain exceptions) from August 6, 1997 to December 31, 1997, (2) all equity-related transactions (with certain exceptions) at the head office and all branch offices of Nomura tokyo from August 6, 1997 to August 12, 1997, (3) brokerage transactions in securities, index futures and securities options (with certain exceptions) by the corporate development and services department I of Nomura tokyo's head office from August 6, 1997 to December 5, 1997, (4) brokerage transactions in securities, index futures and securities options (with certain exceptions) by the sales department, corporate development and services department II, investment consulting department, and corporate services department of the head office from August 6, 1997 to September 5, 1997, (5) underwriting and bidding for japanese government bonds, municipal bonds, and bond guarantee by the japanese government (with certain exceptions) from August 6, 1997 to December 31, 1997. Also, the mof directed Nomura tokyo to implement measures to reinforce Nomura tokyo's compliance system and prevent the re occurrence of the events that led to these penalties and to report to the mof the status of implementation of such measures in writing not later than September 19, 1997. These actions were taken by the mof in view of its finding that Nomura tokyo violated Japan's securities and exchange law and the commercial code in connection with the conferring of undue profits to a shareholder/client of Nomura tokyo, including discretionary securities trading for his benefit, for the purpose of rewarding him for his cooperating with Nomura tokyo in ensuring the smooth conduct of an annual shareholders' meeting. Continued in #13...
Furthermore, on July 31, 1997, the tokyo stock exchange("TSE") and seven other japanese stock exchanges similarly ordered Nomura tokyo to suspend the same transactions stated in (1) through (4) above on each such exchange for the respective same periods in light of the above-mentioned administrative sanctions imposed by the mof. Also, on August 8, 1997, the TSE fined Nomura tokyo 100 million yen for violations of the japanese securities exchange law and the commercial code. On the same date, the japanese securities dealers association ("JSDA") imposed a similar fine for violations of its articles of association. Both the TSE and JSDA also directed Nomura tokyo to submit reports as to the status od the implementation of the measures being taken for improving business operations and compliance.
Dec 2, 1991
Regulatory Action: The Fair Trade Commission of Japan FinalAbout an affiliate: Nomura Securities Co., Ltd.Sanctions: Prohibition · Begun Dec 2, 1991 · Resolved Dec 2, 1991 · Other · Docket N/A
On December 2, 1991, The Fair Trade Commission of Japan imposed a prohibition on the Nomura Securities Co., Ltd. against future violations of article 19 of the antimonopoly law in connection with loss compensation.
The event or proceeding occurred more than ten years ago
Oct 21, 1991
Regulatory Action: The Japan Securities Dealers Association FinalAbout an affiliate: Nomura Securities Co., Ltd.Sanctions: Other; Monetary penalties/fines · Fine: $682,157 · Begun Oct 21, 1991 · Resolved Oct 21, 1991 · Consent · Docket N/A
Violations of article 24, paragraph 1, subparagraph 4 of the association's articles of association (principles of fair and equitable trade), in connection with excessive sales promotion and with loss compensation.
In October 21, 1991, The Japan Securities Dealers Association ("association") imposed a fine of 75 million yen based upon the Nomura Securities Co., LTD ("TNSC") for violation of article 24, paragraph 1, subparagraph 4 of the association's articles of association (principles of fair and equitable trade), in connection with excessive sales promotion; and imposed a fine of 5 million yen upon TNSC for violation of article 24, paragraph 1, subparagraph 4 of the association's articles of association in connection with loss compensation. (Converted japanese yen to US dollars using conversion rate as of March 20, 2007.)
The event or proceeding occurred more than ten years ago
Oct 11, 1991
Regulatory Action: The Tokyo Stock Exchange ("Exchange") FinalAbout an affiliate: Nomura Securities Co., Ltd.Sanctions: Suspension; Monetary penalties/fines · Fine: $468,943 · Begun Oct 11, 1991 · Resolved Oct 11, 1991 · Consent · Docket N/A
Violation of article 59 of the constitution of the exchange (violation of just and equitable principles of trade) in connection with loss compensation and in connection with excessive sales promotion.
The exchange imposed a fine of 5 million yen upon the Nomura Securities Co., Ltd. ("TNSC") for violation of article 59 of the constitution of the exchange (violation of just and equitable principles of trade) in connection with loss compensation; and imposed a four week and a six week suspension upon certain branch offices and certain sales departments of TNSC and imposed a fine of 50 million yen in connection with excessive sales promotion. (Converted japanese yen to US dollars using conversion rate as of March 20, 2007.)
The event or proceeding occurred more than ten years ago
Oct 8, 1991
Regulatory Action: The Ministry of Finance of Japan ("Mof") FinalAbout an affiliate: Nomura Securities Co., Ltd.Sanctions: Suspension · Begun Oct 8, 1991 · Resolved Oct 8, 1991 · Decision · Docket N/A
Violation of ministerial ordinance concerning rules, etc. of soundness of securities companies, article 3, paragraph 7 in connection with excessive sales promotion and for violation of directives from the director-general of securities bureau of mof dated December 26, 1989 in connection with loss compensation.
The mof imposed a 4 week and a 6 week suspension upon certain branch offices and sales & research departments of the Nomura Securities Co., Ltd. ("TNSC") for violation ministerial ordinance concerning rules, etc. of soundness of securities companies, article 3, paragraph 7 in connection with excessive sales promotion and ordered TNSC to conduct a review of its internal measures; and imposed a one week suspension upon the corporate service division of TNSC for violation of directives from the director-general of the securities bureau of the mof dated December 26, 1989 in connection with loss compensation.
The event or proceeding occurred more than ten years ago
Jul 10, 1991
Regulatory Action: The Japan Securities Dealers Association ("Association") FinalAbout an affiliate: Nomura Securities Co., Ltd.Sanctions: Other; Monetary penalties/fines · Fine: $85,295 · Begun Jul 10, 1991 · Resolved Jul 10, 1991 · Consent · Docket N/A
Violation of article 8 of fair business practice regulations no. 9 (regulations concerning solicitation for investment and management of customer accounts by association members) and for violation of article 24, paragraph 1, subparagraph 4 of the association's articles of association (principles of fair and equitable trade) in connection with payments for loss compensation; and for violation of article 24 , paragraph 1, subparagraph 4 of the association's articles of association in connection with dealings with a japanese crime organization.
On July 10, 1991, the association imposed a fine of 5 million yen upon the Nomura Securities Co., LTD ("TNSC") for violation of article 8 of fair business practice regulations no. 9 (regulations concerning solicitation for investment and management of customer accounts by association members) and for violation of article 24, paragraph 1, subparagraph 4 of the association's articles of association in connection with payments for loss compensation; and imposed a fine of 5 million yen upon TNSC for violation of article 24, paragraph 1, subparagraph 4 of the association's articles of association in connection with dealings with a japanese crime organization. (Converted japanese yen into US dollars using conversion rate as of March 20, 2007.)
The event or proceeding occurred more than ten years ago
Jul 8, 1991
Regulatory Action: The Tokyo Stock Exchange FinalAbout an affiliate: Nomura Securities Co., Ltd.Sanctions: Other; Monetary penalties/fines · Fine: $42,642 · Begun Jul 8, 1991 · Resolved Jul 8, 1991 · Consent · Docket N/A
Violation of article 59 of the constitution of the exchange (violation of the just and equitable principles of trade).
The Tokyo Stock Exchange imposed a fine of 5 million yen upon the Nomura Securities Co., Ltd. (converted japanese yen to US dollars using conversion rate as of March 20, 2007.)
The event or proceeding occurred more than ten years ago

Disclosures filed elsewhere

The firm's Form ADV names these and the kind of action only; the details are on the named firm's own filing.

5 regulatory action disclosures about Nomura Securities

Form ADV Item 11 and its Disclosure Reporting Pages, via the SEC record. All adviser disciplinary records.

The brochure

Form ADV Part 2A: the plain-language document an adviser must give its clients. Each item is shown as filed; open an item to read all of it.

2026 Illc Form ADV Part 2A, filed Jun 23, 2026. Brochure PDF. Items: 4 · 5 · 6 · 7 · 8 · 9 · 10 · 11 · 12 · 13 · 14 · 15 · 16 · 17 · 18

Item 4. Advisory business

A. Firm Description Instinet, LLC (“ILLC,” the “firm”, “we”, “us”, or “our”) provides agency-focused electronic trading and ancillary services in the United States to institutional clients. ILLC registered with the U.S. Securities and Exchange Commission (“SEC”) as a broker-dealer in 1979, and as an investment adviser in 2016. It is owned by Instinet Holdings Incorporated (“IHI”), and its ultimate parent company is Nomura Holdings, Inc. (“NHI”). NHI is a publicly traded company listed on the Tokyo and New York stock exchanges. NHI, together with its subsidiaries, is referenced herein as “Nomura” or the “Nomura Group” unless noted otherwise. B.

Read the rest of Item 4 (786 more words)

Description of Advisory Services In addition to broker-dealer services, the firm provides technical analysis, commentary and trading ideas regarding various financial and investment products including equities, indices, fixed-income securities, exchange-traded funds, crypto-currencies, foreign currencies and commodities for a fee to institutional clients. These services (collectively, the “Advisory Services”) may include any or all of the following: 1) daily and intra-day reports of unfolding market patterns and price movements, 2) periodic analysis of significant trends over a given week, month or quarter, 3) access to technical analysts for explanation and commentary on the daily reports and periodic analysis, and 4) trading ideas which may highlight a specific near-term catalyst or event impacting a company or a market that is anticipated to have a short-term price impact on the securities or financial instruments described therein. The daily and intra-day reports and periodic analysis are provided to clients via email and typically include bullet commentary along with illustrative charts, data tables, and statistics drawn from publicly available resources. Occasionally, such analysis may focus on a single security and, when appropriate, provide directional scenarios using chart patterns, underlying trends and various technical indicators to derive price objectives (profit taking levels) and risk levels (stop losses). Access to technical analysts is provided via email, telephone and certain online platforms like Instant Bloomberg. The access allows clients to submit specific questions (e.g., on an underlying ratio, spread or complex trading structure) and get appropriate answers from ILLC’s personnel based upon technical analysis. Trading ideas are licensed to market professionals and/or provided to clients and can be delivered via email or an online platform or integrated as an XML feed into the client’s website. ILLC’s Advisory Services are designed to support professional investors, by complementing their own investment expertise and their primary analysis and due diligence. None of the Advisory Services are research reports. Clients retain sole investment discretion and trading authority and are solely responsible for determining whether and how to utilize the outputs from the Advisory Services and are free to deviate from any such outputs. Advisory Services, including reports, analysts’ explanations and trading ideas, are, in all cases, general recommendations and delivered on an “as is” basis with no undertaking to update. ILLC’s Advisory Services are not rendered in relation to the securities holdings or other investments of any particular client and do not purport to meet the specific investment or trading objectives of any person receiving such services. Clients receiving Advisory Services are

referred to herein as “Advisory Clients” and other ILLC clients are referred to as “Non-Advisory Clients”. As pertinent, Advisory Clients and Non-Advisory Clients are collectively referred to as “clients”. ILLC’s advisory relationships with Advisory Clients are strictly limited to the provision of Advisory Services. Any trades, transactions or orders that may be executed, routed or otherwise processed on behalf of Advisory Clients will be handled by ILLC solely in its capacity as a broker-dealer. ILLC does not maintain investment advisory accounts for clients or provide discretionary investment advisory services. ILLC also does not maintain custody of Advisory Clients’ assets or securities. C. Availability of Customized Services to Individual Clients ILLC provides only impersonal advisory services, meaning that the Advisory Services are not tailored to the individual needs or investment objectives of clients. Consistent with this limitation, ILLC offers clients the ability to customize certain Advisory Services to their preferences. For example, ILLC provides customized trading ideas to institutional investors, including model portfolios, based on client-specified parameters. ILLC also provides customized commentary or analysis on a particular financial instrument, sector, index or market at the request of an Advisory Client. In addition, ILLC will take under consideration a request to provide a customized version of the above services or a different type of advisory services that would utilize our technical analysis and expertise. In these circumstances, a client may impose constraints or restrictions on such things as security types or asset classes. Importantly, all customized Advisory Services are provided on an impersonal basis, without regard to whether a securities transaction or investment strategy is suitable for the Advisory Client or any particular person. For additional information, please see Item 8.B “Risk of Loss” in this brochure. Because advisory fees are negotiated separately with each client, ILLC can tailor the components of the package of services to meet the preferences of a given Advisory Client. Features, content (including data, assumptions, and research), length of term, permitted number of authorized recipients, usage limits, fees, legal terms and conditions, levels of analyst access, and other services and functionality will differ between packages. D. Wrap Fee Programs ILLC does not provide portfolio management services in connection with any wrap fee programs. E. Assets Under Management ILLC does not manage client assets.

Item 5. Fees and compensation

A. Advisory Fees and Compensation For its Advisory Services, ILLC may receive a cash fee (“advisory fee”). There is no basic fee schedule for Advisory Services. Advisory fees may or may not be established by a written agreement. Advisory Services may constitute eligible research under the safe harbor of Section 28(e) of the Securities Exchange Act of 1934 for use in connection with a client’s investment decisions. In such cases, clients may compensate ILLC for Advisory Services through third party soft dollar arrangements (commission arrangements entered into by a client with other, unaffiliated broker-dealers).

Read the rest of Item 5 (724 more words)

Third-party soft dollar arrangements include Commission Sharing Agreements (“CSAs”) that ILLC enters with one or more broker-dealers, pursuant to which end-users of Advisory Services can pay ILLC for Advisory Services by directing trades through the participating broker-dealers. ILLC identifies persons who pay for Advisory Services with soft dollar arrangements: (1) as Advisory Clients if paying with trades executed through an unaffiliated broker-dealer, and (2) as Non-Advisory Clients if paying with trades executed through ILLC. When ILLC provides Advisory Services to these Non-Advisory Clients, ILLC ensures the Advisory Services are solely incidental to brokerage services without special compensation. All advisory fees are negotiated on a client-by-client basis and may be renegotiated at any time. Certain clients receive access to Advisory Services without paying an advisory fee given their relationship with Nomura, its business partners or ILLC. B. Payment of Fees Advisory fees are billed to clients, or invoiced according to the client’s CSA, at a frequency agreed with the client. ILLC does not deduct advisory fees from a client’s brokerage account. C. Other Fees and Expenses Other than advisory fees (described above), Advisory Clients do not pay ILLC any other types of fees or expenses in connection with ILLC’s Advisory Services. However, the Advisory Services may prompt or contribute to an Advisory Client’s decision to trade or invest. In that case, the Advisory Client will bear the costs associated with buying, selling and/or holding the relevant investment. Different investments have different costs to buy, sell and hold. These costs are explained in trade-specific or product-specific materials available from your broker. Brokerage and transaction costs: ILLC’s Advisory Services do not include any securities trading activities, on a discretionary basis or otherwise. Clients may choose to execute transactions through ILLC or its affiliates and, if so, will pay brokerage commissions and other transaction fees for those services, which are independent of the Advisory Services. ILLC’s Advisory Clients have no obligation to send any order to ILLC for execution. For additional information concerning brokerage and transaction costs, see Item 12 “Brokerage Practices” in this brochure. Other investment costs: If clients choose to hold investments as a result of the Advisory Services, they will pay fees to the broker-dealer or bank that custodies their assets and will, in the case of pooled investments (such as exchange-traded funds, closed-end funds, private funds, and mutual funds), also bear their proportionate share of

fees paid at the fund level for managing, administering, distributing, sponsoring, promoting, licensing indices to, or servicing shareholders of the fund. In certain instances, affiliates of Nomura will receive fees or other compensation for these services, directly from the fund or indirectly from companies that share their fund-related revenue with a Nomura affiliate. D. Prepayment of Fees Advisory Clients are not required to prepay fees. If an Advisory Client chooses to pay in advance, prepaid fees will not be refunded in the event Advisory Services are terminated before the end of the billing period, unless otherwise agreed in writing. E. Compensation for Sale of Securities, Conflicts of Interest Certain of ILLC’s Advisory Services, including the trading ideas, can prompt or contribute to trading decisions by Advisory Clients. ILLC and its employees receive transaction-based compensation in exchange for order handling and trade execution services. This presents a conflict of interest and gives ILLC and its employees an incentive to provide Advisory Services that prompt or contribute to trading or investment decisions based on the compensation received, rather than on an Advisory Client’s needs. ILLC seeks to address the conflict by disclosing it to you. Advisory Clients are institutions that select the broker-dealers through which they transact. They are not obligated to trade through ILLC, regardless of their use of advisory communications or trading recommendations obtained from us. ILLC commission charges typically are disclosed to clients on a transactional basis. ILLC’s primary source of revenue is commissions and other compensation for the sale of investment products to its clients. In recent years, advisory fees represented less than half of ILLC’s total revenue. ILLC does not reduce its advisory fees to offset any commissions, markups or other revenue to ILLC or its affiliates that results when Advisory Services prompt or contribute to trading or investment decisions by Advisory Clients. When evaluating the reasonableness of ILLC’s compensation for Advisory Services, you should take into consideration such additional revenue to ILLC and its affiliates.

Item 6. Performance-based fees and side-by-side management

Neither ILLC nor its employees receive fees based on a share of capital gains on, or capital appreciation of, the assets of a client (referred to as “performance-based fees”). However, certain Advisory Clients pay ILLC for trading ideas pursuant to formulas that consider the trading profits generated by trading ideas, whereas other clients pay for trading ideas pursuant to a single fee that covers multiple Advisory Services and does not consider trading profits. The difference in compensation structure incentivizes ILLC to favor Advisory Clients that pay an advisory fee based on trading profits, over Advisory Clients that do not, when disseminating certain trading ideas (e.g., ideas that are time sensitive or limited opportunities).

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We address this conflict by disclosing to you that Advisory Clients can experience material differences in performance as a result of differences in the content and timing with which Advisory Services are delivered to them.

Item 7. Types of clients

ILLC’s Advisory Clients are institutional clients, such as investment advisers, banking or thrift institutions, pensions and profit sharing plans (but not the plan participants), broker-dealers, insurance companies, mutual funds, closed end funds, exchange traded funds, hedge funds, private equity funds, corporations, state or municipal governments and other entities. The Advisory Services are not intended for personal, family or household use and no individuals are accepted as Advisory Clients.

Item 8. Methods of analysis, investment strategies and risk of loss

A. Methods of Analysis and Investment Strategies ILLC uses technical analysis (TA) to complement the expertise of professional investors by identifying when an asset or security is trending, and if it is, the probability of the trend’s continuation. ILLC’s technical analysts identify actionable chart setups with the goal of pointing out the potential for a breakout (through resistance) or a breakdown (through support). Technical analysts also frequently highlight when a financial asset becomes overextended (overbought) or depressed (oversold), both of which increase the probability of a subsequent mean reversal. Technical analysis focuses on movement in the price of an individual stock, not the company behind the stock or its profitability.

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If fundamental analysis describes how markets should be acting based on analysis of a company’s financial statement-related data, then technical analysis reveals how markets are acting based on the current price action. ILLC’s technical analysts see predictive power in the intra-day or long-term movements of a particular stock, both on an absolute and relative basis (for example, relative to the overall market, sector, asset class or index). They analyze price trends and chart patterns for indications of a security’s future price movement, with the objective of identifying trading and investment opportunities. Technical analysis employs models and trading rules based on price and volume transformations, such as the relative strength index, moving averages, regressions, inter-market and intra-market price correlations, business cycles, stock market cycles or, classically, through recognition of chart patterns. In order to provide informed investment opinions, ILLC technical analysts have a reasoned basis for any opinions, supported by the appropriate level of independent investigation, diligence, inquiry, analysis and judgment. Potential conflicts, both actual and perceived, may arise both internally and externally with clients, and it is ILLC’s responsibility to acknowledge and manage those conflicts in a way that protects ILLC’s clients and reputation. Each technical analyst bases his or her analysis, commentary and trading ideas on public information, including research, market or price movements, recent news stories and other events. Their primary sources of information are charts and data (historical price and volume information) on publicly traded financial instruments, including equities, indices, fixed-income securities, exchange-traded funds, foreign currencies and commodities. All Advisory Services are provided on a stand-alone basis, independent of any research reports or trading recommendations that may have been provided to the Advisory Client by others at ILLC, Nomura or elsewhere, and irrespective of the Advisory Client’s investment or diversification objectives. The Advisory Services are prepared by individual technical analysts who are sales personnel of ILLC and not by the Nomura research department. None of the Advisory Services are research reports. The Advisory Services are not intended to be a complete analysis of all material facts regarding any security, issuer or industry. They do not provide information sufficient upon which to base an investment decision. Any information relating to the tax status of financial instruments discussed in ILLC’s Advisory Services is not intended to provide tax advice or to be used by anyone to provide tax advice. Clients are urged to seek tax advice based on their particular circumstances from an independent tax professional.

B. Risk of Loss ILLC’s Advisory Services cover a wide range of securities and investments. There can be no assurances that reliance on the Advisory Services by any client will generate positive returns. Technical Analysis: As with other types of analysis, the predictive nature of technical analysis can vary greatly; models and rules are often modified and updated as new patterns and behaviors develop. Technical analysis does not aim by itself to determine the specific reasons for variations in the price or value of any security. Technical analysis may fail to account for certain material factors which may have affected or may in the future affect the securities, industries or markets involved. Technical analysis should not be regarded as a comprehensive evaluation of any industry, company or security. Relative to fundamental analysis, technical analysis may be more dependent on subjective judgment in deciding which pattern(s) a particular instrument reflects at a given time and what the interpretation of that pattern should be. Methods vary greatly and can be highly subjective; different technical analysts can sometimes make contradictory predictions from the same data. Impersonal advice: ILLC’s Advisory Services are not designed to meet the objectives or needs of specific clients or accounts. Even customized Advisory Services are provided on an impersonal basis, without regard to whether a securities transaction or investment strategy is suitable for any particular person or the Advisory Client. ILLC does not purport to consider any Advisory Client’s overall financial situation or investment objectives, level of financial sophistication, or investment experience, or any tax, accounting, legal, regulatory, financial planning, or other similar considerations or status relevant to any analysis or investment. If that information is provided or becomes available to ILLC or a technical analyst, they will not use that information to personalize the Advisory Services to the financial situation, investment experience and investment objectives of the Advisory Client or a particular person. If a technical analyst asks for additional information when providing a customized Advisory Service, all such questions are intended to refine, not personalize, the trading ideas or customized commentary requested by the Advisory Client. Any request for customized commentary or analysis must be initiated by the Advisory Client, not ILLC or a technical analyst. Any customization of trading ideas, including model portfolios, must be based on parameters specified by the Advisory Client. ILLC and its technical analysts do not assess the appropriateness, completeness, accuracy or importance of a client’s proposed parameters or request for customized commentary. “As is” basis: Each Advisory Service is provided on an “as is” basis, without assurance of future analysis or coverage. This means all commentary, reports and trading ideas are provided as of a particular point-in-time, and ILLC does not undertake to monitor, update or notify Advisory Clients of a subsequent correction or reversal as new patterns develop. It also means that ILLC and its technical analysts have complete discretion over the content they cover and may, at any time, discontinue coverage or change the nature of their coverage of a particular financial instrument, sector, index, market, etc. The access to technical analysts that ILLC provides clients is limited and not continuous or guaranteed. ILLC provides no assurance of a timely response to questions that Advisory Clients submit to a technical analyst. ILLC may decline to answer a question or turn down a request to provide customized commentary or analysis, for any reason or no reason. Dissemination of each trading idea is discretionary, meaning ILLC assumes no obligation to provide an additional idea, or to monitor or update previously provided trading ideas. ILLC (or a particular technical analyst) may stop disseminating trading ideas or offering one or more Advisory Services at any time.

Individual viewpoint: None of the Advisory Services are research reports. The Advisory Services consist of opinions and views of individual ILLC technical analysts, which may be different from, or inconsistent with, the opinions and views of ILLC, its other technical analysts, the Nomura research department analysts, other Nomura sales personnel, or the proprietary positions of ILLC or Nomura. ILLC does not undertake to bring such other research reports, trading ideas or market commentary to the attention of an Advisory Client. The opinions and views that comprise the Advisory Services may be changed by ILLC’s personnel at any time without notice. There can be no guarantee that your preferred technical analyst will continue to be available or continue to provide an Advisory Service. Differential access to information: Given the customized nature, the Advisory Services will provide different Advisory Clients with different depths of analysis or a different specific focus, and more frequent updates based on levels of service and fees selected by an Advisory Client. Furthermore, the reports and products that comprise the Advisory Services may reach conclusions, or contain opinions or estimates, that differ from those reached in other reports and products. Differences in the content and timing with which Advisory Services are delivered can result in material differences in the performance achieved by different Advisory Clients. Reliance on third parties and technology: In providing Advisory Services, ILLC relies on third-party sources for information that it believes to be reliable, but in no way does ILLC guarantee the quality, accuracy and/or completeness of such third-party information. ILLC also relies on technology such as data feeds, email and online platforms in formulating and delivering its Advisory Services. Technical failures may prevent ILLC from obtaining crucial data inputs, or from timely delivering the Advisory Services to clients. The Internet is not a secure network and communications transmitted over the Internet may contain computer viruses or other defects, may not be accurately replicated on other systems or may be lost, blocked, intercepted, deleted or interfered with, without the knowledge of the sender or the intended recipients. Market risk and transaction costs: If you choose to implement any of the trading ideas, investment recommendations or strategies of ILLC’s Advisory Services, you will be subject to various risks, such as companyspecific and market risks, which may result in a loss of principal invested. In addition, trading ideas that seek to generate returns from the trading of financial instruments, rather than from buying and holding investments, tend to have higher brokerage and other transaction costs and taxes which can reduce investment performance.

Item 9. Disciplinary information

There have been no material disciplinary events relating to ILLC’s investment advisory business or the integrity of its management. Descriptions of other disciplinary actions involving ILLC and its management affiliates are reflected in ILLC’s Form ADV, Part 1A, which is available at http://www.adviserinfo.sec.gov on the Investment Adviser Public Disclosure website, and in ILLC’s Form BD, which is available at http://brokercheck.finra.org/.

Item 10. Other financial industry activities and affiliations

We are an SEC-registered broker-dealer and a member of FINRA and other self-regulatory organizations. Our principal business involves the provision of a broad range of broker-dealer services. ILLC is a wholly owned subsidiary of IHI, which is in turn a wholly owned, indirect subsidiary of NHI, whose direct and indirect affiliates and related persons include various other broker-dealers, investment companies, investment advisers and banking organizations. ILLC identifies IHI, NHI and other entities and individuals who exercise a controlling influence over ILLC’s management or policies, or who determine the general investment advice given to Advisory Clients, to be “management persons” of ILLC.

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This section describes relationships or arrangements material to ILLC’s advisory business that certain of its management persons have with other affiliates of Nomura. Additional information concerning these direct and indirect affiliates and related persons of ILLC, which include various other broker-dealers, investment companies, investment advisers and banking organizations, is provided in in ILLC’s Form ADV, Part 1A, which is available at http://www.adviserinfo.sec.gov on the Investment Adviser Public Disclosure website. A. Broker-Dealer Registration Status ILLC is an SEC-registered broker-dealer and a member of FINRA and other self-regulatory organizations. Its principal business involves the provision of equity brokerage services. Certain of ILLC’s management persons also are registered as broker-dealers or, in the case of individuals, as registered representatives of a broker-dealer. B. Futures Commission Merchant (“FCM”), Commodity Pool Operator (“CPO”), or Commodity Trading Advisor (“CTA”) Registration Status ILLC is not a registered FCM, CPO or a CTA and none of its management persons are registered as a FCM, CPO, CTA, or as an associated person of a CPO or CTA. A management person of ILLC is registered as an associated person of a FCM. C. Material Relationships or Arrangements with Our Investment Adviser Affiliates ILLC representatives may suggest or recommend that clients, including Advisory Clients, use our securities execution or other services, or such services of our affiliates, purchase our Advisory Services products, other ILLC products or products of an affiliate. Where ILLC’s or our affiliates’ services are used or products are purchased by clients, we and our affiliates will receive fees and compensation. Sales representatives may, as permitted by applicable law, receive compensation (the amount of which may vary) in connection with these products and services. ILLC addresses these conflicts, which are described in greater detail in Item 12, through disclosure in this brochure. In addition, the firm has established a variety of restrictions, procedures and disclosures designed to address potential conflicts of interest – both those arising between and among client accounts as well as between client accounts on the one hand, and ILLC, its affiliates and their employees on the other hand.

Certain of ILLC’s management persons are registered representatives of the firm and/or hold positions with the firm’s affiliates. In these positions, those management persons may have some responsibility with respect to the business of these affiliates, and the compensation of these management persons may be based, in part, upon the profitability of other parts of IHI and/or NHI. Consequently, in carrying out their roles at ILLC and these other entities, the management persons of ILLC are subject to the same or similar potential conflicts with the interests of clients that ILLC and these affiliates experience. As a result of ILLC’s information barriers and other policies, personnel providing Advisory Services will generally not have access, or will have limited access, to information and personnel in other areas of the firm and/or its affiliates and generally will not be able to develop or implement Advisory Services with the benefit of information held in these other areas. Nomura may make decisions or take (or refrain from taking) actions with respect to investments of the kind held by ILLC clients that may be adverse to ILLC clients. Information barriers may also exist between ILLC’s business lines. In addition, ILLC and its affiliates maintain one or more restricted lists of companies whose securities are subject to certain trading prohibitions. ILLC personnel may be restricted from trading in an issuer’s securities if the issuer is on the restricted lists or if ILLC or an affiliate otherwise has material, non-public information about the issuer. ILLC may be precluded from providing certain Advisory Services relating to securities of issuers on the restricted list, even if it otherwise may have chosen to do so or is requested to do so by a client. ILLC has ownership interests in trading venues and exchanges which may create financial incentives for Nomura entities and/or their employees, including ILLC and its registered representatives, to recommend these venues or exchanges (or other brokers who use these venues or exchanges) for the execution of client trades. ILLC may provide research services, including trade ideas, to certain of its affiliates, who may incorporate this information into their own trading strategies. The provision of trade ideas to clients is subject to various internal policies and procedures which seek to address and mitigate, among other things, potential conflicts of interest and issues related to suitability, confidentiality, and content standards.

D. Material Conflicts of Interest Relating to Other Investment Advisers We do not recommend or select other investment advisers in connection with our Advisory Research Services.

Item 11. Code of ethics, participation in client transactions and personal trading

A. Code of Ethics ILLC has adopted a code of conduct and a code of ethics (together, the “Code of Ethics”) and various other policies and procedures designed to govern the professional activities of ILLC personnel and various aspects of their private conduct, particularly that which could present conflicts of interest between the individuals and the firm or its clients. Those compendia include policies and procedures aimed at identifying and monitoring certain types of personal investments and outside activities that may create a potential or actual conflict of interest. Every ILLC employee must receive, read and annually acknowledge in writing compliance with these policies and procedures.

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For example, ILLC has policies and procedures that, among other things: 1) Impose pre-clearance and reporting obligations with respect to certain personal trading and place limitations on personal trading by employees, such as prohibiting employees from: • •

• •

depriving client orders of priority, precedence or best execution as a result of personal trading; personal trading in a security when they have knowledge of pending or potential client orders in the security, or where they have recommended or intend to recommend a client transaction in the security on the same day or at any point through the following trading day; attempting to replicate client trading strategies; or trading contrary to an Advisory Services recommendation to a client unless they have a permissible reason for doing so.

2) Require employees to maintain accounts at designated brokers and provide initial and monthly reports of securities holdings and transaction reports; 3) Prohibit employees from violating applicable laws; and 4) Require employees to promptly report any violations of these policies and procedures to the Legal and Compliance Department. ILLC employees may open and retain personal trading accounts in accordance only with these policies and procedures. Clients, or prospective clients, may, upon request, receive a copy of ILLC’s Code of Ethics by contacting their client service representative or by calling the RIA Compliance Department at (212) 310-9500 or via postal request addressed to: Attention: RIA Chief Compliance Officer Worldwide Plaza 309 West 49th Street New York, New York 10019

B. Recommendations of Securities in which ILLC or a Related Person Has a Material Financial Interest Nomura entities may invest for their own account in securities that are mentioned in, or the subject of, Advisory Services. ILLC may recommend to Advisory Clients securities in which ILLC or an affiliate also invests, on its own behalf or on behalf of its clients, or otherwise has a material financial interest (including securities of ILLC affiliates), or make such recommendations at or about the same time that ILLC or Nomura may buy or sell securities for its own account. ILLC, through its personnel, may suggest or recommend that Advisory Clients also use ILLC’s execution or other services, or similar services offered by affiliates. Similarly, ILLC personnel may suggest or recommend that Advisory Clients purchase ILLC products or products of an affiliate. Such products include registered investment companies or other collective funds, bank deposit products, securities, or other investment vehicles to which one or more Nomura entities may be an adviser, manager, sponsor, shareholder servicer, promoter or placement agent or may have issued, structured, licensed indices to, or underwritten such vehicle. Where ILLC’s or its affiliates’ services are used or products are purchased by Advisory Clients, ILLC and its affiliates may receive additional fees and compensation. ILLC personnel may, as permitted by applicable law, also receive compensation (the amount of which may vary) in connection with these products and services. Compensation received in connection with clients’ purchase or sale of stocks, bonds, mutual funds, other securities or insurance products through ILLC or its affiliates may include commissions, spreads, markups and markdowns, and distribution or other fees. C. Conflicts of Interests in Trading and Management As a broker-dealer effecting transactions on behalf of clients, including those clients who receive Advisory Services, ILLC or an affiliate may act as agent or as principal for its own account, as permitted by applicable law. ILLC effects transactions primarily on an agency basis. It may act as a principal or riskless principal to correct bona fide errors, to fulfill non-standard settlement requests, to provide ADR services, to effect foreign exchange transactions, and in other situations that do not involve substantial proprietary trading or investment. Riskless principal transactions to perform non-standard settlements are identified as principal. Similarly, ILLC or an affiliate may, in transactions involving such clients' securities, act as agent while also representing another client on the other side of the transaction (agency cross transactions). In addition, ILLC or its affiliates may have a position in, or enter purchase or sale orders for, securities recommended to clients in the normal course of its business as a broker-dealer. ILLC and/or its affiliates may profit from these positions or transactions in securities. ILLC only provides impersonal advisory services, meaning that the Advisory Services are not tailored to the individual needs or investment objectives of clients. ILLC is not required to seek prior written consent before effecting transactions for Advisory Clients receiving solely impersonal advice, provided ILLC complies with the conditions of Rule 206(3)-1 under the Investment Advisers Act of 1940. Advisory Clients should understand that, if they use ILLC’s services in connection with the purchase or sale of a security that is the subject of Advisory Service, ILLC may act as principal for its own account or as agent for another person. To the extent ILLC has a brokerage relationship with an Advisory Client to whom ILLC inadvertently provides personalized Advisory Services, ILLC may execute agency cross transactions for the client at ILLC’s discretion, provided it obtains any required prior written consent from the client in accordance with Rule 206(3)-2 under the Investment Advisers Act of 1940.

You should note that ILLC, as a broker-dealer, may buy or sell securities, for clients or the firm, in a manner that may be different than recommendations included in ILLC’s Advisory Services. ILLC addresses these conflicts through disclosures in this brochure and internal controls designed to identify and manage appropriately potential conflicts of interest – both those arising between and among client accounts as well as between client accounts and ILLC’s business. For example, ILLC personnel also are subject to personal trading restrictions as detailed in its policies and procedures and Code of Ethics. These policies and procedures and the Code of Ethics require ILLC personnel to pre-clear certain securities transactions, disclose their investment accounts, and provide or cause ILLC to receive annual holdings reports and quarterly transaction reports.

Item 12. Brokerage practices

ILLC’s Advisory Services do not include execution services, and ILLC does not select broker-dealers with respect to trades placed by Advisory Clients. ILLC’s Advisory Clients select the firm through which they execute trades, and have no obligation to trade through ILLC. However, as described in Item 10.C., ILLC and its representatives do make recommendations of broker-dealers to clients, including Advisory Clients. When recommending a broker-dealer, ILLC and its representatives give preference to itself and affiliated broker-dealers. Recommending an affiliated broker-dealer (including ourselves) presents a conflict of interest, as the affiliated broker-dealer could use its discretion to maximize profits to the affiliated companies rather than give you disinterested advice.

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The result may be worse execution than what you would have otherwise received. Order routing: An affiliated broker-dealer has an incentive to route your orders to: •

other affiliated broker-dealers in the U.S. and other jurisdictions, as this typically provides affiliated companies with greater aggregate revenue than if using unaffiliated broker-dealers;

•

one of the internal trading venues that Instinet or its affiliates operates or owns, as Instinet typically receives a commission from both sides of any resulting transaction;

•

the market center that provides Instinet with the largest rebate or similar payment for order flow, rather than other market centers which pay less or nothing for orders.

Preferencing certain clients: When effecting agency crosses, an affiliated broker-dealer has an incentive to preference the account of a client that represent larger sources of revenue to Nomura than you or other clients (e.g., by effecting a cross at a price more favorable to the other party). Principal Trading. When acting as principal to effect transactions or facilitate non-standard settlement requests, an affiliated broker-dealer has an incentive to effect the transaction at a price that is most favorable to Nomura rather than you or other clients. ILLC does not consider, when recommending broker-dealers, whether ILLC or Nomura affiliates receive referrals of Advisory Clients from the broker-dealer.

Item 13. Review of accounts

ILLC does not maintain client advisory accounts and does not provide personalized investment advice with respect to investment portfolios or the management of assets. Accordingly, there are no periodic reviews and no reports to clients regarding advisory accounts.

Item 14. Client referrals and other compensation

A. Economic Benefits for Providing Services to Clients The Nomura Group may have a variety of banking, financial, or service relationships with the unaffiliated issuers of the securities covered by ILLC’s Advisory Services. Those relationships may include Nomura acting as an underwriter for the issuers of the securities covered by the Advisory Services, and they may result in compensation of Nomura Group affiliates. In such relationships, ILLC may receive compensation. ILLC discloses, in accordance with applicable law and regulation, its conflicts of interest and those of its technical analysts that are or may be material in the context of the relevant Advisory Service.

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ILLC does not receive any economic benefit from persons other than Advisory Clients for providing Advisory Services to such clients. B. Direct or Indirect Compensation for Client Referrals ILLC does not directly compensate any person for Advisory Client referrals, other than associated persons subject to ILLC’s system of supervision. Nomura may have business arrangements that incentivize third parties to refer or recommend clients to ILLC and other Nomura companies. This presents a conflict of interest by encouraging third parties to refer clients to ILLC to maximize their profits rather than give disinterested advice. Nomura, not the client, bears the cost of any incentive that Nomura offers to third parties to encourage referrals.

Item 15. Custody

ILLC does not maintain custody of advisory client funds or securities in connection with its Advisory Services.

Item 16. Investment discretion

ILLC does not have discretionary authority to manage securities on behalf of Advisory Clients. ILLC’s Advisory Clients make their own investment decisions.

Item 17. Voting client securities

With respect to Advisory Services, ILLC does not have authority to vote proxies.

Item 18. Financial information

ILLC has no financial condition that impairs its ability to meet contractual and fiduciary commitments to clients and has not been the subject of a bankruptcy proceeding.

Form ADV Part 2A, via the SEC Investment Adviser Public Disclosure site.

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