Reg Bi Disclosure
Reg Bi Disclosure
Regulation Best Interest Disclosure (RegBI)
Effective June 30, 2021
Disclosures for Retail Broker Dealer Clients
This Regulation Best Interest (“Reg BI”) Disclosure Statement (“Reg BI Statement”) provides information about Intercoastal Capital Markets Inc (“ICMI,” “us,” “our,” or “we”). If you have any questions about the contents of this Reg BI Statement, please contact us at 561-939-8282 or by email us at: email@example.com. This Reg BI Statement is applicable to retail customers for whom we are acting as broker. If you are not a retail customer and would like additional information regarding the services provided to you by ICMI, please contact your ICMI Broker (as defined below).
ICMI is providing this information to enhance the transparency of our relationship by disclosing conflicts of interest connected with our broker dealer and services we provide. Conflicts may arise as a result from the practices of the financial services industry, ICMI’s business model and our compensation structure, including conflicts arising from the transaction services and charges. This document also clarifies standards of conduct that apply to ICMI and its’ brokerage accounts.
This document alone is not a comprehensive description of all conflicts of interest ICMI has in its brokerage services. Rather it describes the most significant and common conflicts in our brokerage relationship with you. Similarly, not all of the conflicts we describe here will apply each time a service is provided. Regardless of the context, ICMI will observe high standards of honor and just and equitable principles of trade when transacting in brokerage accounts and providing services to you.
When ICMI acts as a broker-dealer, we are subject to a number of laws, rules and regulations, including the Securities Exchange Act of 1934 (the “Exchange Act”), the rules of the Securities and Exchange Commission (“SEC”), the rules of the Financial Industry Regulatory Authority (“FINRA”), and state laws. We are required to observe high standards of honor and just and equitable principles of trade at all times.
General Information regarding ICMI
ICMI is registered with the Securities and Exchange Commission (“SEC”) as a broker-dealer and is a member of the Financial Industry Regulatory Authority (“FINRA”) and the Securities Investor Protection Corporation (“SIPC”). ICMI is not registered with the SEC as an investment adviser and does not act as an investment adviser. ICMI is directly owned by Trifecta Group Holdings LLC a Florida domiciled company.
Trifecta Group Holdings is a holding company, the subsidiaries of which (collectively referred to herein as the “Firm” or “Intercoastal Capital Markets”) provide proprietary fixed income services for its’ own accounts and to institutions and individuals through separately managed accounts.
ICMI’s brokerage services, provided by the Firm’s registered representatives in their capacity as associated persons of ICMI (“ICMI Brokers”), include buying and selling fixed income securities (including interests in privately offered pooled investment vehicles excluded from the definition of an investment company under the Investment Company Act (“Private Funds”) for retail customers on a customer-directed basis, making no recommendations with respect to asset allocation and proprietary strategies of those customers. For most retail advisory customers of ICMI and for employees of ICMI and its affiliates, ICMI generally acts as broker in connection with the purchase and sale of securities, and introduces those customers’ transactions and accounts to its clearing broker for clearance and settlement.
As a general matter ICMI and ICMI Brokers will not make recommendations with respect to any specific securities. ICMI and ICMI Brokers also generally act as broker on a non-discretionary basis in connection with the purchase and sale of securities for its customers who are retail clients of ICMI.
Overview of this Reg BI Statement
This Reg BI Statement provides information regarding the material facts relating to the scope and terms of our relationship with you, including the capacity in which we and ICMI Brokers act; the material fees and costs that apply to your transactions, holdings, and accounts and the type and scope of services we provide.
For additional information regarding ICMI and its brokerage services, or your brokerage account (“Brokerage Account”), please see the Form CRS for ICMI at https://www.intercoastalcap.com/form_CRS/. You can also request this information from your ICMI Broker.
For additional free information regarding ICMI and ICMI Brokers, including disciplinary events, please visit https://brokercheck.finra.org/.
Material Facts About Our Relationship With You – Capacity
ICMI does not make any recommendations regarding your Brokerage Account in any capacity including a broker-dealer capacity. ICMI acts on a non-discretionary basis meaning ICMI has no discretionary authority over your Brokerage Account and can only purchase or sell securities or execute investment strategies that you authorize. This means that you, the customer, make the ultimate decision regarding the purchase or sale of securities or other investments or the allocation of assets. Accordingly, you, the customer, must approve each transaction prior to execution.
Material Facts About ICMI’s Relationship With You
Material Fees and Costs
The following describes the material fees and costs that apply to accounts held with ICMI for you:
ICMI brokerage accounts: Retail customers generally enter into account agreements whereby brokerage services are provided by ICMI. Generally, ICMI buys and sell securities on a principal basis which is subject to a markup and/or markdown of the execution price. This markup and/or markdown is the transaction cost of executing trades with ICMI on a proprietary basis with its’ own accounts and how ICMI generates revenue. ICMI does not execute on an agency basis nor charge commissions on trades for retail customers. Accounts may also be subject to separate transaction and processing related clearing costs in addition to the markup and/or markdown charges. Markups and/or markdowns paid to ICMI are charged on a per transaction basis
In addition, if the customer enrolls in additional services, retail customers of ICMI will be subject to other fees and expenses (e.g., fees related to reorganization issues, wire/ACH’s, retirement fund administration, etc.) that are not retained by ICMI. For additional information regarding those fees and expenses, please see your transaction confirmations, account statements and the Form CRS for ICMI at https://www.intercoastalcap.com/form_CRS/, or contact your ICMI Broker.
Purchases and sales of securities pursuant to customer-directed transactions are not subject to Reg BI but are subject to various transaction costs (markup and/or markdown) that are negotiated with customers.
Type and Scope of Services
Generally ICMI brokerage accounts are only available to employees, instituions and to retail customers of ICMI on an accommodation basis.
ICMI does not make any recommendations in connection with its brokerage accounts in any capacity. ICMI transacts all brokerage accounts on a non-discretionary basis.
ICMI does not provide any on-going or periodic review, follow-up or monitoring. In connection with its’ brokerage accounts ICMI will confirm the retail customer’s investment objectives initially and on at least an annual basis, but does not provide any ongoing monitoring of a retail customer’s accounts or investments.
ICMI does not act in the capacity of an investment adviser nor is ICMI a registered investment advisor.
Retail customers can engage in self-directed transactions in. Your purchases and sales of securities in ICMI brokerage accounts are not subject to Reg BI and will perform consistent with your own expectations and not that of ICMI.
ICMI does not act with discretion over customers’ accounts assets; the retail customer makes the decision regarding any purchase or sale of securities or any asset allocation. For additional information on the type and scope of brokerage services provided by ICMI to you, please see your brokerage agreement with ICMI.
ICMI makes no recommendations regarding securities or investment strategies involving securities for retail customers and transacts for its’ own accounts on a proprietary basis.
ICMI does not recommend any products or services. ICMI does allow holding of Private Funds in retail customer accounts who are eligible to invest by meeting certain financial sophistication requirements, including status as accredited investors and qualified purchasers under applicable securities laws. ICMI will perform due diligence to the extent of obtaining the necessary customer and issuer information for record keeping for compliance. ICMI does not recommend nor offer approval of such investments nor should ICMI holding such investments in retail brokerage accounts be interpreted as approval or recommendation of such investments.
General Basis for Recommendations
ICMI does not recommend any products or services. ICMI acts in a non-discretionary basis on all brokerage accounts and transactions. ICMI does seek to help customers achieve their unique investment objectives by offering brokerage account services to its’ retail clients. Specifically, ICMI is an institutional proprietary fixed income broker dealer offering access to fixed income securities via its’ own trading accounts and relationships. ICMI and ICMI Brokers obtain each retail customer’s “Investment Profile” (e.g., as applicable, the retail customer’s age, other investments, financial situation and needs, tax status, short- and long-term investment objectives, investment experience, investment time horizon, liquidity needs, risk tolerance and any other information the retail customer discloses to ICMI or ICMI Brokers) in order to better understand client investment objectives. ICMI and ICMI Brokers work with each retail customer to ensure their own investment choices align with their needs and financial goals.
Material Risks Associated with Brokerage Recommendations
ICMI does not recommend any products or services. ICMI acts in a non-discretionary basis on all brokerage accounts and transactions. Investments in securities and other financial instruments involve risk, and retail customers can lose some or all of their money. All investments and investment strategies involving securities involve risk of loss, including the potential loss of a retail customer’s entire investment, which the retail customer should be prepared to bear. There is no guarantee that any retail customer will meet the customer’s investment goals, or that any security transacted in ICMI’s brokerage accounts will perform as anticipated.
The investment performance and the success of any particular investment or investment strategy can never be predicted or guaranteed, and the value of a customer’s investments will fluctuate due to market conditions and other factors. Investments are subject to various market, liquidity, currency, economic, political and other risks. Past performance of any security or investment strategy is not indicative of future performance.
Retail customers that open an ICMI brokerage account should review ICMI’s Form CRS for ICMI at https://www.intercoastalcap.com/form_CRS/, or contact your ICMI Broker.
Retail customers should consult the offering documents for any security that they choose to transact and invest in including Private Funds, for a discussion of risks associated with the particular security.
In addition to the investment-specific risks associated with investments and investment strategies involving securities, there are other potential risks associated with any relationship with financial intermediaries, such as ICMI. For example, as the use of technology increases, ICMI or affiliate may be more susceptible to operational or information security-related risks. A breach in cyber security refers to both intentional and unintentional events that may cause ICMI or affiliate to lose proprietary information or operational capacity or suffer data corruption. Cyber security breaches of ICMI’s or third-party service providers or issuers in which customers and clients invest may also subject ICMI to many of the same risks associated with direct cyber security breaches. Cyber security breaches can cause disruptions and affect business operations, potentially resulting in financial losses, impediments to trading, the inability to transact business, destruction to equipment and systems, violations of applicable privacy and other laws, regulatory fines, penalties, reputational damage, reimbursement or other compensation costs or additional compliance costs.
Standard of Conduct under Regulation Best Interest
Reg BI requires that ICMI and ICMI Brokers to act in the best interest of the retail customer at the time a recommendation of a security or an investment strategy involving a security is made, without placing the financial or other interest of ICMI or the ICMI Broker ahead of the interest of the retail customer. ICMI does not make recommendations of any product or service. ICMI acts in a non-discretionary basis on all brokerage accounts and transactions. Thusly since ICMI does not make recommendations purchases and sales of securities pursuant to customer-directed transactions are not subject to Reg BI.
Material Facts Regarding Conflicts of Interest
Reg BI defines a conflict of interest associated with a recommendation as “an interest that might incline a broker, dealer, or a natural person who is an associated person of a broker or dealer—consciously or unconsciously—to make a recommendation that is not disinterested.” ICMI does not make recommendations of any product or service. ICMI acts in a non-discretionary basis on all brokerage accounts and transactions. Thusly since ICMI does not make recommendations purchases and sales of securities pursuant to customer-directed transactions are not subject to Reg BI.
When ICMI or an ICMI Broker provide securities transaction services to retail brokerage accounts the way ICMI and ICMI Brokers make money and otherwise conduct business may create conflicts with your interests. Where possible, ICMI takes steps to mitigate or eliminate material conflicts of interest associated with transaction services regarding securities and investment strategies involving securities. For a discussion of conflicts of interest associated with transaction services in retail brokerage accounts held with ICMI and ICMI Brokers, please contact your ICMI broker.
You can find additional information about the services we provide, fees you pay, and conflicts of interest in ICMI‘s Customer Information Brochures and New Account Agreements. Your ICMI broker can provide you a copy. You may also call 561-939-8282 to request up-to-date information and request a copy of ICMI’s relationship summary.