Regulation S-P

Midland Securities, Ltd. is committed to maintaining your personal information in a highly confidential manner.  This page describes our Privacy Policy as it applies to how we collect, maintain and protect private, non-public information when you open an account with Midland Securities, Ltd.  Please know that this policy applies to all former, current, and new customers.

Why Do We Collect Personal Information?

When you apply for and/or open an account with Midland Securities, Ltd., we collect personal information about you for various purposes.  Certain regulatory requirements mandate that information be collected so that we may make proper evaluations with respect to your financial needs.  Furthermore, the Patriot Act requires that we collect specific information in an effort to fight money-laundering.  (See Customer Identification Program section below).

How Do We Protect Your Information?

When you open an account with Midland Securities, Ltd., your cash and securities will be held by our clearing firm, Hilltop Securities (“HTS”).  Please know that the information obtained by Midland Securities, Ltd. will be maintained in the strictest confidence and stored in secure databases which are exclusive to certain Midland Securities, Ltd. and HTS personnel and is inaccessible to outside parties.  The individuals with access to your information will be limited to personnel dedicated to servicing your account. To learn more about Hilltop Securities Privacy and Security Policy, please go to the following web address: http://www.hilltopsecurities.com/hilltop-securities-inc-disclosures/privacy-policy/

Our Sharing Practices

Midland Securities, Ltd. has never and will never provide your personal and sensitive information to affiliates, subsidiaries, and/or non-affiliated third parties unless required by law.  We do not wish to reserve the right to disclose nonpublic, personal information to affiliates or nonaffiliated third parties, except to nonaffiliated parties as authorized by law.  Essentially, this means that Midland Securities, Ltd. will treat your private (nonpublic information) in a confidential manner and it will not be shared with anyone.  “Required by law” may include regulatory investigations which mandate that we provide specific information to investigators for purposes of cooperating with their investigation.

Is Your Information Accurate?

When you opened your account with Midland Securities, Ltd., you received a copy of your new account application which contains the information you provided to us.  To ensure that our customer files are complete and accurate, we invite you to provide us with any updates and/or additions to your personal information as needed.

Midland Securities, Ltd. is committed to providing timely service to our clients.  This document informs you of our ability to respond to certain business disruptions.  Midland Securities, Ltd. is an introducing broker/dealer and, as such, we rely on our clearing firm to perform certain functions on our behalf, including the execution of securities transactions and the maintenance of customer funds and securities.  Our ability to respond to certain business disruptions is partially dependent on our clearing firm.  Regarding client assets, all market-traded securities are held with our clearing firm, rather than in physical certificates.  Ownership of the securities is reflected on a book-entry, record-keeping basis with our clearing firm or their depositories’ participants, maintaining on their records the beneficial ownership positions of their customers.

Midland Securities, Ltd. is responsible for creating and maintaining business continuity plans for all its businesses in an effort to prevent extended periods of disruption of service to our clients and business partners.  In the event of a business disruption, we have plans designed to allow us to continue operations of critical business functions, such as the entering of client orders, completing securities transactions and providing clients access to their cash and securities. 

We accomplish this in part by:

– Relocating impacted businesses to designated recovery locations.

– Designing our technology and systems to support the recovery processes for critical business functions with the use of off-site host-servers.

– Utilizing business and technology teams that are responsible for activating and managing the recovery process.

– Adopting a communication plan to ensure that our employees receive emergency notifications and instructions, including in-building announcements, telephone contact, telephone phone numbers, and websites.

As part of our plans, Midland Securities, Ltd. has identified the applications that are critical to our business.  These applications are implemented in concert with our contracted business vendors and parent affiliations which utilize data centers with industry-standard practices to copy and store data from the production site to the recovery site in real time.  In most cases, recovery times will range from nearly instantaneous to approximately four hours.  With some business functions, next-day recovery is expected.

With regard to client assets, all market-traded securities are held with our clearing firm or with custodian banks rather than in physical certificates.  Ownership of the securities is reflected on a book-entry, record-keeping basis with our clearing firm or their depositories’ participants, maintaining on their records the beneficial ownership positions of their customers.  To learn more about Hilltop Securities’ continuity plan, please go to the following web address:  http://www.hilltopsecurities.com/hilltop-securities-inc-disclosures/business-continuity-plan/

Contacting Us

If you need to contact us regarding a significant business disruption, please reach out to:

Brad Phillips

469-522-4309

BPhillips@lbig.com

If you cannot contact us as you usually do, please contact us via email at:

compliance@Midlandandsecurities.com.

If you cannot access us through either of those means, please contact our clearing firm, Hilltop Securities, for instructions on how to access your funds and securities, enter orders, or any another related service or inquiry you may have.

Hilltop Securities
1201 Elm Street, Suite 3500
Dallas, TX 75270
214.953.4000
800.678.3792

www.hilltopsecurities.com

Any material changes to the above information will be available on our website or upon request. The plan is reviewed annually, updated as necessary, and subject to modification from time to time.

Midland Securities, Ltd. is registered with the Financial Industry Regulatory Authority (FINRA) as a broker-dealer and is a member of Securities Investor Protection Corporation (SIPC) and as such, provides brokerage services, rather than advisory services. Brokerage services and fees differ from those of advisory services and fees, so it is important to understand the fees and services specific to a broker dealer.

Additionally, free and simple tools are available to research firms and financial professionals at Investor.gov/CRS, which also provides educational materials about broker-dealers, investment advisers, and investing. This document is a summary of the services and fees we offer to “retail” investors, which are natural persons who seek or receive services primarily for personal, family, or household purposes.

What Investment Services and Advice Can You Provide Me?

As a broker-dealer, we offer services that include the buying and selling of securities. We provide the ability to execute the purchase and sale of various types of securities on your behalf, at your discretion. We also offer investment and strategy recommendations. Please note:

– Investment Offerings: The securities we can offer and recommend to include buying and selling stocks, bonds, mutual funds that hold stocks and bonds, certificates of deposit, money markets, bank insured products, etc.

– Account Minimums and Requirements: In general, we do not require a minimum dollar amount to open and maintain a brokerage account. However, some investment products may have investment minimums.

– Investment Authority: You make the ultimate decision regarding the purchase and sale of investments in your brokerage investment account(s).

– Additional Services: We can offer additional services to assist you in developing and executing your investment strategy and monitoring the performance of your account. We are not required to monitor your portfolio or investments on an ongoing basis unless agreed to in advance.

For a description of our brokerage services, please refer to additional disclosures or request from your financial advisor.

Ask us questions to help you better understand our services:

Given my financial situation, should I choose an advisory service? Why or Why Not?

How will you choose investments to recommend to me?

What is your relevant experience, including your licenses, education and other qualifications? What do these qualifications mean?

What Fees Will I Pay?

You will pay fees and costs regardless of the performance of your investments. Please make sure you understand what fees and costs you are paying.

– The fee you pay is based on the specific transaction and not on the value of your account. The more transactions you place, the more commission we earn, thus, we might have an incentive to encourage more transactions.

– With stocks or exchange-traded funds, the fee is usually a separate commission. With other investments, such as bonds, this fee may be part of the price you pay for the investment (called a mark-up or mark-down). With mutual funds, a fee, typically called a “load,” reduces the value of your investment. Mutual funds also charge annual management fees which vary depending on the fund. With certain investments, such as variable annuities, you may have to pay fees, such as surrender charges, to sell the investment, which reduces the value of your investment.

– We may charge you additional fees, such as custodian fees, account maintenance fees, and account inactivity fees. The more transactions in your account, the more fees we charge. We therefore have an incentive to encourage you to engage in transactions.

Ask us questions to help you better understand our services:

Help me understand how these fees and costs might affect my investments.

If I give you $10,000 to invest, how much will go to fees and costs, and how much will be invested for me?

What Are Your Legal Obligations to Me When Providing Recommendations When Acting As My Investment Adviser? How Else Does Your Firm Make Money and What Conflicts Of Interest Do You Have?

When we provide you with a recommendation, we are required to act in your best interest and not put our interest ahead of yours. At the same time, the way we make money creates some conflicts with your interests. You should understand and ask us about these conflicts because they can affect the recommendations we provide you.

Here are some examples to help you understand what this means.

– We may buy and sell your investment through our own accounts (called “acting as principal”) and we can earn a profit on these trades.

– We can make extra money by selling you certain investments because they are offered by companies that pay our firm to sell their investments. Your financial professional also receives more money if you buy these investments.

To further help you understand what conflicts of interest exist, please discuss with your broker. Also, additional brokerage research may be done at the FINRA’s BrokerCheck website: https://brokercheck.finra.org/.

Ask us questions to help you better understand our services:

How might your conflicts of interest affect me, and how will you address them?

How Do Your Financial Professionals Make Money?

The financial professionals providing brokerage services to you will receive commission-based compensation in connection with the investment products purchased and sold. The more investment products they sell, the more they can earn. Further, we can make extra money by selling you certain investments, such as certain mutual funds, because the mutual fund company pays the firm a service fee to service your account, which is considered revenue sharing.

Do Midland Securities, Ltd. Financial Professionals Have Legal or Disciplinary History?

No. Visit www.investor.gov/CRS for a free and simple search tool to research us and our financial professionals. For additional information about our brokers and services, visit https://brokercheck.finra.org/, and refer to your account agreement.

Ask us questions to help you better understand our disciplinary history: As a financial professional, do you have any disciplinary history? For what types of conduct?

Additional Information

To find additional up-to-date information about our brokerage services, call us at 469-522-4309. You may request a copy of the Form CRS Relationship Summary by contacting your investment professional.

Ask us questions to help you better understand who to contact with any questions or complaints:

Who is my primary contact person?

Is he or she a representative of an investment adviser or a broker-dealer?

Who can I talk to if I have concerns about how this person is treating me?

The Purpose of This Disclosure

At Midland Securities, Ltd., one of our core values is that our clients’ interests come first. We are providing this disclosure to you, a retail investor, because we want you to understand the material facts about a brokerage relationship with us, including:

– The capacity in which we will act;

– Details about the material fees and costs you may incur in your account;

– The type and scope of the services we will provide in your brokerage account, including any material limitations related to products, our investment philosophy, general risks; and

– Material facts related to conflicts of interest associated with our recommendations.

If you have any questions about this disclosure, please talk with your financial advisor.

Material Facts about Your Brokerage Relationship with Midland Securities, Ltd.

When you enter into a brokerage relationship with Midland Securities, Ltd., we generally open an account through our clearing agent, Hilltop Securities, Inc. brokerage account. In your brokerage account, Midland Securities, Ltd. and your financial advisor act in the capacity of a broker-dealer. We must act in your best interest at the time a recommendation is made, without placing our financial or other interest ahead of yours.

Acting in the capacity of a broker-dealer is different from acting as an investment adviser. Midland Securities, Ltd. is a registered broker-dealer. For more information about the differences between an investment adviser and a broker-dealer, please talk with your financial advisor.

Our general account is a non-discretionary transactional brokerage account. This means that while your financial advisor may offer education, advice, and recommendations, you make all yes/no decisions on which investments to buy and sell. This also means that within your brokerage account, you pay transactional fees and costs when you buy or sell securities. Fees and costs within your brokerage account are described below.

Material Fees and Costs That May Apply to Your Transactions, Holdings and Account(s)

Below is a summary of the material fees and costs that may apply to your transactions, holdings, and account. Additionally, some of the costs described in the section titled “Internal Costs, Fees and Expenses of Certain Investments” are not direct fees or costs you pay to us, but they will reduce your return on your investment(s), like mutual fund expenses.

You will also find references to more detailed and specific information regarding referenced fees and costs. To learn more about fees, costs, and the compensation received by Midland Securities, Ltd. and your financial advisor, please talk with your financial advisor.

Transactional costs for investments – Your financial advisor may offer education, advice, and recommendations about investments, and you pay us certain costs described below for transactions which occur within your account.

– You pay a commission each time you buy or sell certain investments, such as stocks and ETFs. The commissions on these trades may be up to 1.7% of the principal amount, plus a base commission ranging between $30 and $255 depending on the dollar amount of the trade.

– The commission charge may be reduced based upon the principal amount of the trade and may be as low as 0.09% plus $255 for trades of a principal amount of $500,000 or more.

– You also pay a commission or pay a markup or markdown when you buy or sell a bond or certificate of deposit (CD). For bonds and CDs, the commission or markup may be up to 1% of the dollar amount you purchase, and the commission or markdown may be up to 1% of the dollar amount you sell. Depending on the principal amount of the trade and the maturity date, you may pay a lower commission or markup/markdown rate.

– In addition to these costs, you also pay a $2.50 transaction fee per trade for most buy and sell trades in your account. In certain instances, your financial advisor is permitted to discount the commission or markup on a trade.

– You pay a sales charge (sometimes referred to as a “sales load”) when you purchase a mutual fund and/or a fund in a 529 plan.

– For equity mutual funds in a 529 plan, you will pay a maximum sales charge between 2.5% and 5.75%

– For fixed-income mutual funds, a maximum sales charge of 2.5% will be charged, before any applicable discounts or breakpoints. “Breakpoint” discounts are volume discounts to the sales charge which you pay when purchasing a mutual fund. The extent of the discount depends on the amount invested in a particular family of funds. For example, a mutual fund might charge a front-end load of 5.75% for share purchases of less than $50,000, but reduce the load to 4.50% for investments between $50,000 and $99,999, and further reduce or eliminate the load for larger investments.

– At certain investment levels (typically $1 million), your investments with an individual product provider may carry no sales charges. However, in these instances, the mutual fund company may pay Midland Securities, Ltd. a commission on these investments. A contingent deferred sales charge may apply if you sell these investments within a certain time frame.

– The specific amount of the sales charge on a mutual fund or 529 plan varies depending upon the fund company, type of fund, and applicable breakpoints or sales charge waivers. You do not pay a commission to Midland Securities, Ltd. or your financial advisor when you exchange or sell a fund.

– Example of a stock purchase: If you authorize your financial advisor to purchase $2,500 of a stock, you will pay a 1.7% commission ($42.50) plus a $30 transaction fee, for a total transactional cost of $72.50 paid to us, plus the principal amount of the trade.

– Example of a mutual fund purchase: If you authorize your financial advisor to purchase $2,500 of a Class A share of a mutual fund with a 2.5% front-load sales charge with no breakpoints, you would pay $62.50, reducing your amount invested to $2,437.50.

Distribution and/or Service Fees (12b-1 Fees) – Mutual fund companies and 529 plans pay Midland Securities, Ltd. ongoing distribution and/or service fees, often known as 12b-1 fees. You pay 12b-1 fees to the mutual fund company as one of the ongoing internal costs of holding the shares. These fees generally are 0.25% of the principal, depending on the type of mutual fund. The amount of the 12b-1 fee you pay depends on the mutual fund company, 529 plan, type of fund, and amount of the fund purchased. The 12b-1 fee reduces the return from your mutual fund. More detailed information can be found in the applicable product prospectus or plan information, or by speaking with your financial advisor.

Internal Costs, Fees and Expenses of Certain Investments – Mutual funds, ETFs, and 529 plans carry built-in operating expenses. In addition to any initial commissions or sales charges, there are ongoing 12b-1 fees. These costs and expenses impact your returns. For mutual funds and 529 plans, examples of these additional internal costs and fees include investment management fees and fund transaction fees. Built-in operating expenses reduce the return from your investment. Additional information about a particular product’s internal costs, fees, and expenses can be found in the product’s applicable prospectus and/or statement of additional information.

Account-Based Fees – If applicable, accounts are subject to certain additional fees and costs for services, including cash management fees, annual holding and reporting fees (for retirement accounts,) transfer and wire fees, estate service fees, account termination fees, and margin interest. The applicable schedule of fees for your account will outline the service and frequency of any charges. To learn more about additional account service fees and costs, talk with your financial advisor or review the Customer Information Brochure.

Margin Fees – If you take out a margin loan, you will pay ongoing interest to Midland Securities, Ltd. on your margin loan balance. For more information about our policy regarding margin accounts, please consult your financial advisor or request a copy of the Customer Information Brochure.

Type and Scope of Services Provided to You

Classification of Your Account – General accounts at Midland Securities, Ltd. are brokerage accounts and are classified as either non-retirement or retirement accounts. Accounts can be opened jointly or individually; by a representative fiduciary, trustee or other type of representative; or by certain types of entities. There is no minimum amount required to open and maintain a general account. The terms and conditions, including the obligations of each party, are listed in the new account application.

Your Account Portfolio Objective – Before you start investing in your account, provide important information to your financial advisor to help complete a client profile, which forms the basis of Midland Securities, Ltd.’s and your financial advisor’s recommendations. This includes your goal or purpose for investing, risk tolerance(s) and investment time horizon(s), as well as other important financial information. These details help us recommend an appropriate portfolio objective for both your account and the goal to which your account is assigned. You are responsible for choosing either a recommended portfolio objective or an alternative portfolio objective for your account, if available. If any information about your current situation changes, you are responsible for notifying us or your financial advisor.

Recommendations to buy, sell, or exchange investments will be provided to you based on the objective for your account. You will make all decisions with respect to your account and may follow or reject any recommendations made by Midland Securities, Ltd. or your financial advisor.

Review of Your Account with your Financial Advisor- We do not provide investment or account monitoring with our brokerage accounts. However, we may voluntarily review your account to determine whether to recommend a securities transaction or an investment strategy involving a security to better align your account with our investment guidance.

How We Select Investments to Own in Your Account – We are selective about the types of investments we make available for purchase in your account. That’s because we know you’re working to achieve important financial milestones in your life, and we want to provide what we believe are appropriate investment choices for you. We use a disciplined approach to select the investments available to you. We strive to find those which align with our focus on quality investments, work well together in a diversified portfolio, and are compatible with our buy-and-hold philosophy. This gives you and your financial advisor a starting point for choosing investments suited to your goals, situation, and the amount of risk you’re willing to take.

Investments always carry risks, and there are no guarantees when investing. Please read the “General Risks and Disclosures” section below for more information.

Material Limitations on Investments in Your Account

General Risks and Disclosures – While we will take reasonable care in developing and making recommendations to you, securities involve risk, and you may lose money. There is no guarantee that you will meet your investment goals or that our recommended investment strategy will perform as anticipated. If you place unsolicited trades or trades that are otherwise against our recommendations, this may impact your diversification and/or the potential range of returns within your account. Please consult available prospectus documents for any security we recommend to see an overview of specific risks associated with the product.

Conditions Beyond Our Control – There is always a risk that conditions beyond Midland Securities, Ltd.’s control – such as war, terrorism, civil unrest, natural disaster, government restrictions or rulings, interruptions of systems, health issues or labor unrest – may pose a risk to your investments or investment strategies.

Cybersecurity Risk – The computer systems, networks and devices used by Midland Securities, Ltd. and our service providers employ a variety of protections designed to protect against damage or interruption from computer viruses, network/computer failures and cyber-attacks. Despite such protections, systems, networks and devices may be breached. Cyber incidents may cause disruptions and impact business operations, potentially resulting in financial losses, the inability of Midland Securities, Ltd. or service providers to trade, violations of privacy and other laws, regulatory fines, reputational damage, reimbursement costs and additional compliance costs, as well as the inadvertent release of confidential information.

How Midland Securities, Ltd. and Your Financial Advisor Are Compensated

Midland Securities, Ltd. earns revenue from our clients, as well as from product providers and money managers (“third parties”) who assist us in providing the investments and services we offer you in your account. Our revenue from clients includes commissions, markups and markdowns, sales charges, transaction fees, and interest on margin accounts. Our revenue from third parties may include ongoing 12b-1 fees.

How your Financial Advisor is Compensated for Financial Services

In your account, your financial advisor receives a portion of the commissions you pay each time you buy or sell a security or pay any markup or markdown. Your financial advisor also receives a portion of any sales charges and 12b-1 fees. The amount of this compensation differs depending on the investment type and transaction amount.

Your financial advisor generally receives 25% - 75% of the revenue Midland Securities, Ltd. receives from the transactional revenue and ongoing 12b-1 fees generated by activity in your brokerage account.

Please ask your financial advisor to explain any commissions, sales charges, markups/markdowns, fees/internal costs, and expenses that may apply to any investments you consider.

Material Facts Regarding Conflicts of Interest Associated with Recommendations

When we provide you with a recommendation regarding securities transactions or investment strategies involving securities in your account, we must act in your best interest, within the meaning of Regulation Best Interest, and must not put our interests ahead of yours. At the same time, the way the firm generates revenue, and the way your financial advisor is compensated, creates some conflicts with your interests. While we have taken numerous steps to mitigate, disclose and/or eliminate conflicts of interest associated with our and your financial advisor’s recommendations in your account, it is also important that we disclose the material facts regarding these conflicts.

We encourage you to review the referenced links and information below. Ask your financial advisor questions as needed to help you understand these disclosures or if you have additional questions.

Recommendations Regarding Securities – The compensation Midland Securities, Ltd. and your financial advisor receive when you buy, sell, hold, or exchange investments within your account creates conflicts of interest. Your financial advisor has an incentive to recommend you purchase investments that create the most compensation for the firm and your financial advisor. In general, commissions on stocks and ETFs are higher than commissions on bonds or CDs. Additionally, initial compensation from the sale of mutual funds and funds in a 529 plan are generally higher than that of stocks, bonds, ETFs or CDs. Mutual funds and 529 plans also pay ongoing compensation.

These sources of transactional revenue and compensation create a conflict between the firm and your financial advisor’s interests and your own. These conflicts can relate to recommendations regarding the investment type, number of transactions, the amount to invest per transaction, and the allocation of investment amounts among different securities and fund families or different types of securities.

When you purchase shares in a mutual fund and/or a 529 plan, you may be eligible for a breakpoint discount, which lowers your front-end sales charge, based on the amount of your investment and how much you have invested in a certain fund family. Your financial advisor has an incentive to provide advice that would avoid breakpoint discounts.

In certain instances, your financial advisor is permitted to negotiate with you for a lower commission on stocks, which could result in reduced compensation for your financial advisor. This is a conflict of interest because your financial advisor is incentivized to avoid negotiating commissions.

Additional Investment Type Considerations – In most instances, your financial advisor has an incentive to recommend you purchase investments such as a mutual funds or mutual funds in a 529 plan that generate revenue when purchased, as well as provide ongoing compensation (e.g., 12b-1 fees, trail commissions) as opposed to investing in alternatives that may pay lower upfront commissions and do not provide ongoing compensation. Over a longer period of time, your financial advisor and Midland Securities, Ltd. will generally earn more revenue from a mutual fund and mutual fund in a 529 plan than from an ETF, a stock or a bond, but this will depend on several factors including the specific product, how much you invest, breakpoints, and how frequently you trade.

As a further example, mutual funds and ETFs may have similar investment characteristics but differ in the ways you pay for them and how your financial advisor and Midland Securities, Ltd. are compensated over time. Mutual funds generally have higher upfront commissions and ongoing expenses but enable you to rebalance through exchanges and liquidate for no additional cost. ETFs generally have lower upfront commissions and ongoing fees, but all future transactions to rebalance or liquidate an investment will be charged a commission. As a result, mutual funds are typically more expensive than ETFs for clients who trade infrequently, but they become less expensive as the amount of trading increases.

Rollovers and Transfers – Your financial advisor has an incentive to recommend that you roll over or transfer your assets from an employer-sponsored plan or another brokerage firm or investment adviser. These actions may generate transaction-based compensation for Midland Securities, Ltd. and your financial advisor when the assets are invested in your brokerage account.

Distributions – Compensation may cause a conflict between your financial advisor’s interest and your own when your financial advisor provides advice relating to distributions from any of your accounts. When you make a distribution through a full or partial liquidation, certain commissions may be generated. If you have a brokerage account and an advisory account of the same type (e.g., a traditional IRA in a brokerage account or a traditional IRA in an advisory account), your financial advisor may have an incentive to advise you to take a distribution from your brokerage account and not your advisory account because the distribution could generate additional transactional revenue and would not affect the amount of your asset-based fee in your advisory account.

Noncash Third-Party Incentives – Third-party providers, such as mutual fund wholesalers may also give financial advisors gifts up to a total value of $100 per provider per year, consistent with industry regulations. Third parties may occasionally provide financial advisors with meals and entertainment of reasonable value. Additionally, third parties may provide the firm and our financial advisors with access to certain research tools, or software that is developed or subscribed to by third parties. This creates a potential conflict of interest to the extent that this may cause the firm or our financial advisors to prefer those product partners that provide these noncash incentives over other product partners.

Mitigation of Conflicts of Interest – One of Midland Securities Ltd.’s core values is that our clients’ interests come first. We have taken various steps to mitigate, disclose, and/or eliminate these conflicts of interest associated with recommendations in your account, including developing policies and procedures, supervisory systems, processes and controls, compensation and incentive policies, disclosures, agreements, and training. If you have any questions about conflicts of interest, please talk with your financial advisor or review the information referenced throughout this document.

To help the government fight the funding of terrorism and money laundering activities, federal law requires financial institutions to obtain, verify, and record information that identifies each person who opens an account.  This Notice answers some questions about your firm’s Customer Identification Program.

What types of information will I need to provide?

When you open an account, your firm is required to collect information such as the following from you:

➧ Your name

➧ Date of birth

➧ Address

➧ Identification number:

– U.S. Citizen: taxpayer identification number (Social Security number or Employer Identification number)

– Non-U.S. Citizen: taxpayer identification number, passport number, and country of issuance, alien identification card number, or government-issued identification showing nationality, residence, and a photograph of you.

– You may also need to show your driver’s license or other identifying documents.

A corporation, partnership, trust or other legal entity may need to provide other information, such as its principal place of business, local office, employer identification number, certified articles of incorporation, government-issued business license, a partnership agreement, or a trust agreement.

U.S. Department of the Treasury, Securities and Exchange Commission, NASD, and New York Stock Exchange rules already require you to provide most of this information. These rules may require you to provide additional information, such as your net worth, annual income, occupation, employment information, investment experience and objectives, and risk tolerance.

What happens if I don’t provide the information requested or my identity can’t be verified?

Your firm may not be able to open an account or carry out transactions for you.  If your firm has already opened an account for you, they may have to close it.

We thank you for your patience and hope that you will support the financial industry’s efforts to deny terrorists and money launderers access to America’s financial system.

FINRA member firms, which include Midland Securities, Ltd., may place a temporary hold on requested disbursements of funds or securities, from the account of specified customers, where there is a reasonable belief of financial exploitation.

Effective February 2018, a new designation, called a Trusted Contact Person (TCP), was instituted in the financial services industry. The TCP is intended to be an alternate contact/resource for the member firm, if necessary, in administering the account of a senior customer (age 65 & over) or a specified adult (age 18 or older perceived to have a mental or physical impairment, who is unable to protect his or her interests). The firm may contact the TCP when the latter cannot be contacted after multiple attempts, or if it is believed there could be diminished mental or physical capacity, of if it is believed a financial exploitation may be occurring. The TCP may retrieve or relay personal important information, on behalf of the customer. Interested account owners may obtain a copy of the "Trusted Contact Person form" by contacting us. 

Additionally, FINRA has developed a Securities Helpline for Seniors. If you are a senior investor, you may call 1-844-57-HELPS (844-574-3577) Mon-Fri 9 a.m.-5p.m Eastern time, if your feel you need assistance from FINRA, or to raise concerns about issues with your brokerage account investments.