Report For: 1ST Quarter, 2016

Rule 606 Statement


SEC Rule 606 Reports

VES, a division of Volant Liquidity, LLC (“Volant”) has prepared this report (the “Report”) pursuant to Securities and Exchange Commission Rule 606, which requires all broker-dealers to make publicly available quarterly reports on their order routing practices. The Report provides information on VES’s routing of “non-directed orders,” which are orders that customers have not specifically instructed to be routed to a particular venue for execution. For these non-directed orders, VES has selected the execution venue on behalf of its customers. Absent specific client instructions, VES assesses execution venues to which it routes client orders based on one or more factors, including execution speed, transaction costs (fees and rebates), liquidity, potential opportunities for price improvement (prices superior than the national best bid or offer), and other factors.

The SEC’s final adopting release, along with the text of Rule 606, can be found at http://www.sec.gov/rules/final/34-43590.htm. The SEC’s Frequently Asked Questions about Rule 606 can be found at http://www.sec.gov/interps/legal/mrslb13a.htm.

The Rule requires four sections in the report; the first three sections are for NMS stocks, and the fourth section is for option contracts. VES routes options orders exclusively, so there is no stock routing information to report. The Report identifies the venues most often selected by VES and the percentage of various types of orders routed to those venues. The material aspects of VES’s relationships with these venues, if any, are discussed below. VES will make available to any customer the identity of the venue to which its order was routed for execution during the six months prior to the customer’s request, whether the order was directed or non-directed, and the time of the transaction, if any, that resulted from the order.

Material Aspects of Relationships with Certain Venues Listed in the Reports

Market Making. Volant Liquidity is a market maker and trades principally in many listed options. Volant Liquidity is registered in some form of a market making capacity on each of the following option exchanges: BATS (BZX), BOX, Chicago Board of Options (CBOE), C2, International Securities Exchange (ISE), ISE Gemini, MIAX, Nasdaq OMX BX Options (BX Options), Nasdaq OMX PHLX (PHLX), Nasdaq Options Market, NYSE AMEX Options and NYSE Arca Options.

Payment for Order Flow. Certain venues may offer cash rebates and/or charge fees for executing orders. These rebates and fees differ by venue and are typically determined based on whether the order provided or removed liquidity, and may vary based on the volume of orders routed by VES to the particular venue. If the amount of these rebates exceeds the fees charged, VES will receive a net payment from the particular venue. In addition, VES participates in Exchange-sponsored listed options payment for order flow programs and accepts payment for order flow for certain listed options orders. In the course of providing liquidity, VES may also direct certain options orders to Volant Liquidity’s options market making unit, or third party market makers for execution.

Disclaimer

VES has endeavored to prepare these Reports in accordance with the requirements of Rule 606. Rule 606 is intended to provide investors with certain information regarding each broker-dealer’s order handling practices. The Reports are not intended to and do not consider all factors relevant to an analysis of a broker-dealer’s best execution and order routing practices. They alone do not create a reliable basis to address whether VES or any particular broker-dealer failed to obtain the most favorable terms reasonably available under the circumstances for customer orders.

VES has used best efforts to produce the Reports accurately and timely. However, preparation of the Reports requires compilation and analysis of a substantial amount of data. Accordingly, the Reports may contain inadvertent errors or other inaccuracies. Use of the Reports is strictly voluntary. VES shall not be liable for any person’s use of the Reports or for any damages arising from the use of the Reports, including incidental and consequential damages.