Subject to the terms of an order and consistent with its best execution obligations, E*TRADE determines the market centers to which customer orders are routed for execution and how they are handled. E*TRADE routes non-directed customer orders to various market centers for execution, including both market makers and national securities exchanges. E*TRADE uses advanced order routing technology to seek the best execution available in the market, based on a combination of factors, including execution price, speed, price improvement opportunities (executions at prices superior to the then prevailing inside market), automatic execution guarantees, liquidity enhancement, and the availability of efficient and reliable order-handling systems, the level of service provided, and the cost of executing orders, among other things. E*TRADE also considers whether the market center makes payments to receive order flow from E*TRADE. E*TRADE publishes monthly execution quality statistics at us.etrade.com/trade/execution-quality. E*TRADE receives payment for order flow from particular market centers for customer orders in National Market System (NMS) Securities (i.e., exchange-listed stocks and ETFs and standardized options) that E*TRADE directs to and are executed at such market centers. In accordance with SEC Rule 606, E*TRADE publishes a quarterly report detailing the material market centers to which it routes orders in NMS Securities and its material relationships with those market centers at https://us.etrade.com/l/quarterly-order-routing-report. E*TRADE’s order handling practices are subject to E*TRADE’s best execution obligations. E*TRADE maintains policies and procedures to review the quality of executions it receives from market centers to which it routes orders and, notwithstanding its receipt of payment for order flow, E*TRADE seeks to route customer orders consistent with its best execution obligations and the results of such reviews. E*TRADE participates in retail liquidity and priority programs offered by national securities exchanges under which eligible customers’ orders marked with specific order-handling codes receive priority ahead of certain orders at a given price level, or other enhanced execution benefits. E*TRADE reviews customers’ activity on a periodic basis to determine program eligibility and reserves the right to choose whether to participate in such programs. Customer orders that exceed certain price or size parameters or other order characteristic thresholds determined by E*TRADE may be subject to manual review prior to routing to confirm order accuracy and to mitigate risks to E*TRADE or its customers, which may cause execution delays and/or executions at prices significantly different from the quoted price displayed at order entry. E*TRADE may, without prior notice to you, decline, reject, cancel, or reverse orders, and may place trading, disbursem*nt, or other restrictions on accounts to comply with regulatory obligations or to protect E*TRADE and/or its customers from fraud, risk, or other conditions, including, but not limited to, high volatility, low liquidity, or other special or extreme market conditions. E*TRADE may make changes to order routing parameters and impose certain trading restrictions during times of high volatility, low liquidity, or other special or extreme market conditions. These changes and restrictions may be in response to a market center’s request or due to capacity balancing, destination availability, or other factors affecting E*TRADE or its market centers. In such situations, so that customers receive fair pricing and preserve continued execution of orders in prevailing market conditions, E*TRADE will determine whether market conditions warrant any additional measures or restrictions and act accordingly, including taking one or more of the following actions: With respect to a liquidating order containing a fractional share component, E*TRADE will first route all whole share components pursuant to its normal order handling procedures. Once all whole share components of the order are filled, the fractional share component of the order will execute at the midpoint of the National Best Bid or Offer (NBBO). Please note that if the whole share components do not receive full execution, the fractional share component will not execute. Please also note that due to industry-wide clearing limitations, fractional shares cannot be transferred outside of E*TRADE. Any fractional share positions you hold will be liquidated prior to any ACAT out. Please note that E*TRADE may determine to take such action to protect either or both of its customers and E*TRADE at any time, with or without notice, and that execution delays and/or executions at prices significantly different from the quoted price displayed at order entry may be more likely to occur under such circ*mstances.
