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Material Aspects of Relationships between Wedbush Morgan Securities, Inc. ("WMS") and Market Venues
American Stock Exchange ("ASE"): WMS sends order flow in certain listed equity securities to ASE specialist who are not employees of WMS. WMS receives no compensation for order flow in listed equity securities routed to the ASE.
Boston Stock Exchange ("BSE"): WMS sends order flow in certain listed equity securities to BSE specialists who are not employees of WMS. WMS may participate in profits of principal trading activities of these BSE specialist in relationship to WMS order flow.
Chicago Stock Exchange ("CSE"): WMS sends order flow in certain listed equity securities to CSE specialists who are not employees of WMS. WMS may receive payment in listed equity securities routed to CSE at various rates depending on the security's spread and tier category. Payments range from 0 to a maximum of 0.001 cents per share depending on tier and spread of security.
Bernard L. Madoff Investment Securities ("Madoff"): Madoff is a broker-dealer registered with the U.S. Securities and Exchange Commission and makes markets in certain listed equity and NASDAQ securities. WMS receive no payment for its order flow to Madoff.
Knight Capital Markets ("KCM"): KCM is a broker-dealer registered with the U.S. Securities and Exchange Commission and makes markets in certain listed equity securities. WMS may receive order flow payments on orders ranging from 100 shares to 50,000 shares. WMS may receive payments ranging from 0 to a maximum of 1.75 cents per share depending on category/tier and spread of security.
Knight Securities ("Knight"): Knight is a broker-dealer registered with the U.S. Securities and Exchange Commission and makes markets in certain NASDAQ and OTC securities. WMS receives no order flow payment on orders under 5,000 shares. On orders of 5,000 shares and greater, WMS may receive payment for order flow depending on the spread of the security ranging from 0 to a maximum of 1 cent per share.
New York Stock Exchange ("NYSE"): WMS sends order flow in certain listed equity securities to NYSE specialist who are not employees of WMS. WMS receives no compensation for order flow in listed equity securities routed to the NYSE.
UBS Capital Market L.P. ("UBS"): UBS is a broker-dealer registered with the U.S. Securities and Exchange Commission and makes markets in certain NASDAQ and OTC Securities. WMS receives no order flow payment from UBS.
Wedbush Morgan Securities, Inc: WMS sends order flow to its own market makers for certain NASDAQ securities. WMS's market makers execute, on a principal basis, orders routed to them by WMS and other broker-dealers, and may have a profit or loss in connection with such transactions. In addition, orders routed to WMS's market makers may be executed as riskless principal by crossing orders with other customers or market makers. WMS's market makers do not make a profit or incur a loss in the execution of riskless principal transactions.
Archipelago ECN and Archipelago Exchange ("Archipelago"): Archipelago ECN is a broker-dealer registered with the U. S. Securities and Exchange ("SEC") and is an Electronic Communications Network ("ECN"). The Archipelago Exchange is a national securities exchange registered with the SEC. Archipelago charges a transaction fee of up to 0.004 of a cent per share for orders requiring routing outside the electronic book, up to 0.003 of a cent per share for orders that take liquidity out of the electronic book. Archipelago pays up to 0.002 of a cent per share for orders that add liquidity to the electronic book.
Option Exchanges: WMS sends order flow on options to the Chicago Board of Options Exchange, American Stock Exchange, Pacific Exchange, International Securities Exchange, and the Philadelphia Stock Exchange market makers or specialist who are not employees of WMS. WMS may receive payment for option order flow from the various exchanges. Such payments are made by various groups and associations as set by the respective group or association and have ranged from 0 to a maximum of 75 cents per contract.
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