FHN Financial Capital Markets ("FHNCM"), as a division of First Horizon Bank, is a Bank Dealer as defined in Section 3(a) of the Securities and Exchange Act and is regulated by The Federal Reserve and The State of Tennessee Department of Financial Institutions. US Treasuries, Municipals, and Agency securities are traded through this firm.
FHN Financial Securities Corp ("FHNSC"), a wholly owned subsidiary of First Horizon Bank, is a Broker Dealer and a member of FINRA and SIPC www.sipc.org. Securities such as corporate bonds, non-agency mortgage securities, and asset-backed securities are traded through this firm.
FHN Financial Municipal Advisors ("FHNMA"), as a division of First Horizon Bank, is a registered municipal advisor with the Securities and Exchange Commission (SEC) and the Municipal Securities Rulemaking Board (MSRB). FHNMA has a fiduciary duty to work with issuer clients to provide advice relating to the issuance of municipal securities, municipal securities products or the investment of the proceeds thereof.
FHN Financial Capital Markets, FHN Financial Portfolio Advisors and FHN Financial Municipal Advisors are divisions of First Horizon Bank (FHB). FHN Financial Securities Corp, FHN Financial Main Street Advisors, LLC, and FHN Financial Capital Assets Corporation are wholly owned subsidiaries of FHB. FHNSC is a member of FINRA and SIPC — http://www.sipc.org. Investment products are not FDIC insured, have no bank guarantee and may lose value.
FINRA Rule 2262 –FINRA Control Relationship
FHNSC is a wholly owned subsidiary of First Horizon Bank. First Horizon Corporation (NYSE:FHN) is the parent company of First Horizon Bank.
On February 28, 2022, First Horizon Corporation and TD Bank Group announced that First Horizon Corporation entered into a definitive agreement to be acquired by TD Bank Group. The acquisition is expected to be completed by late 4th quarter in 2022 or first quarter 2023 pending all required regulatory approvals.
USA Patriot Act Customer Identification Program (CIP)
To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each business entity that opens an account.
What this means to you:
When you open an account, we will ask for Federal Tax Identification Number, physical street address of your business, full legal name of your business and other information that will allow us to identify your company. We may also ask you to provide copies of certain documents that will aide in confirming this information.
Sect. 311 Notice on Special Measures against Specified Entities
Pursuant to U.S. regulations issued under section 311 of the USA PATRIOT Act, 31 USC 5318A, FHN Financial is prohibited from establishing, maintaining, administering, or managing any account for or on behalf of a foreign banking institution if such account conducts any transactions with the entities and/or jurisdictions listed here:
The regulations also require us to notify our clients and counterparties that they may not provide the aforementioned entities or any of their subsidiaries, or any designated jurisdictions with access, whether direct or indirect, to any account held at our financial institution. If FHN Financial becomes aware that the accounts held at our financial institution have been used to provide direct or indirect access or processed any transactions involving the aforementioned entities, their subsidiaries or identified jurisdictions, we will be required to take appropriate steps to prevent such access, including termination of the account held with us.
FINRA Rule 4370 - BUSINESS CONTINUITY PLAN – DISCLOSURE STATEMENT
FHNSC has developed and implemented a Business Continuity Plan ("BCP") in an effort to mitigate the effects related to unforeseen business interruptions. This BCP is designed to enable FHNSC to continue its operations in the event of an emergency or significant business disruption. FHNSC is focused on providing clients a high level of service and responsiveness regardless of the severity of the disruption. The firm is committed to ensuring that most disruptions to our ability to serve our clients would be brief and quite limited with most essential business activities resuming the same business day.
Our Business Continuity Plan
Our BCP addresses, among other things, alternate communication with employees, customers and regulators; alternate locations; books and records retention and recovery; assessments of financial, operational and critical systems.
Specifically, in the event of an emergency or significant business disruption:
(1) If telephone service were to become unavailable or a power outage should occur for any reason, calls would be re-routed and business would be diverted to other branches across the country.
(2) If a disaster renders FHNSC’s main office located at Crossover Lane unusable, the relocation plan is to move the trading, sales, and operations to a Business Recovery Site with space that approximates the square footage occupied at Crossover Lane today.
FHNSC believes that clients must have confidence in our ability to minimize any business interruption and to provide ongoing services even in the event of a disaster of any degree. Our BCP was designed with this in mind. Senior management is responsible for regularly addressing our business continuity planning needs and ensuring that key personnel are trained so that FHNSC can have a timely resumption of business in the event of a significant business disruption. The most recent exercise of FHNSC’s business continuity capabilities was successfully conducted on October 30, 2021.
FINRA Rule 2266 – SIPC Disclosure
FHNSC is a member of the Securities Investor Protection Corporation ("SIPC"). Information about SIPC, including the SIPC brochure, can be obtained by contacting SIPC directly at www.sipc.org or calling (202) 371-8300.
FINRA Rule 2267 – Investor Education and Protection Disclosure
FHNSC is a member of FINRA. The FINRA website is www.finra.orgThere is a brochure available on the FINRA website that includes information describing FINRA BrokerCheck. The FINRA Broker Check Hotline number is (800) 289-9999.
MSRB Rule G-10 – Investor Education and Protection Disclosure
FHNCM, FHNSC and FHNMA are registered with the MSRB and SEC. MSRB’s Website is www.msrb.orgThere is a brochure available on the MSRB website that describes the protections available under MSRB rules and how to file a complaint with an appropriate regulatory authority.
MSRB Rule G-42 Duties of Non-Solicitor Municipal Advisors
MSRB Rule G-42 requires that FHNMA provide you with information regarding certain legal events and disciplinary history. These matters (if any) will be on Form MA (for the FHNMA) and Form MA-I (for employees and agents of FHNMA). These forms are filed with the Securities and Exchange Commission and can be found at:
Financial Interest Disclosures
FHN Financial may act as, among other things, an agent, principal, placement agent, underwriter, dealer manager, municipal advisor, market maker, or trader. In those and other capacities, FHN Financial may provide a service or take or hold positions in, or advise other customers and counterparties concerning, make general communications concerning, or express a view with respect to, a security, contract, financial instrument or product or strategy that may be the subject of a communication from FHN Financial to you. Any such services, positions and advice may not be consistent with, or may be contrary to, your interests or positions and, in connection therewith, FHN Financial will not be acting in your interests or assessing the suitability for you of any service, security, contract or related financial instrument or product or strategy. Any such service, position or advice does not constitute investment advice (impartial or otherwise) to you, a recommendation to you of any particular security, investment product or strategy, or advice to you to take or not take any course of action. In addition, acting in one or more of the capacities noted above may give FHN Financial access to information relating to markets, investments, services and products. As a result, FHN Financial may be in possession of information, which, if known to you, might cause you to seek to dispose of, retain or increase your position in one or more securities, contracts or other financial instruments or products or investment strategies or engage or terminate certain services. FHN Financial is and will be under no duty to make any such information available to you, except to the extent, we have expressly agreed in writing or as may be required under applicable law. Finally, in connection with any given transaction or service, FHN Financial may provide compensation or commissions to its employees, agents, affiliates or third parties that may create an incentive for FHN Financial to provide or otherwise highlight certain trade or service ideas, rather than others available to other clients of FHN Financial or to you in the marketplace.
Following below are additional disclosures regarding the financial interests of FHN Financial that may be relevant to you. These disclosures supplement—and are not exclusive or otherwise in lieu of—any other disclosures provided or made available to you.
FHN Financial, as agent, underwriter, dealer manager or principal, may enter into communications with you following which you may purchase, sell, contract for and/or tender securities and/or products issued or provided by third party entities and providers or FHN Financial’s affiliates (collectively, the "Entities"). FHN Financial may also offer other financial services to, or transact with these Entities. In connection with these activities, FHN Financial has and may negotiate commissions, discounts, fees, and other compensation arrangements with these Entities. In addition to these arrangements, these Entities may pay additional compensation to FHN Financial for market-related data, financial analysis, valuations and opinions. These Entities may also agree to reimburse and eventually reimburse FHN Financial for marketing and transaction-related expenses, as well as indemnification and contribution expenses. These fee and reimbursement arrangements may create an incentive for FHN Financial to sell or recommend certain securities and products rather than others available to you in the marketplace.
Loans and Syndicates
FHN Financial may originate and arrange, manage and participate in syndicates that lend to corporate entities for various purposes, including working capital facilities, mergers and acquisitions, and debtor-in-possession financing. FHN Financial may act as administrative agent and/or collateral agent for a loan, including collecting payments, distributing funds to lenders, processing assignments of loans, holding the liens on collateral and exercising remedies on behalf of the lenders. In these roles, the credit documents may grant FHN Financial discretion, including, for example, in permitting assignments or exercising rights and remedies of the lenders related to collateral. Lenders may have limited rights to override FHN Financial’s exercise of such discretion. FHN Financial receives compensation for acting in its various roles, including indemnification from lenders and fees for processing assignments. Lenders typically irrevocably appoint FHN Financial to serve as an agent and/or collateral agent and have no ability to modify FHN Financial’s compensation for these roles. FHN Financial may make a private, secondary market in loans, including trading in whole loans, portions of loans or participation interests. FHN Financial may receive compensation or retain fees in connection with such trading, as either agent or as principal. FHN Financial or its affiliates may sell credit protection to lenders in connection with loans or have significant financial relationships with other financial firms providing such credit protection. FHN Financial may have significant commercial, investment or other financial relationships with an obligor or its affiliates that may affect its decision-making as a lender, agent or otherwise in connection with all such activities.
Repurchases and Reverse Repurchases
FHN Financial may participate in the repurchase and reverse repurchase (collectively, "Repo") market through a wide range of financial transactions. FHN Financial sources collateral from third parties in order to meet its collateral posting obligations across FHN Financial (e.g., through OTC derivative transactions). The Repo desk finances FHN Financial by borrowing collateral to cover short positions, as well as sending out long positions FHN Financial has acquired. FHN Financial may also act as market maker and primary dealer with respect to securities subject to Repo transactions. In all cases, FHN Financial has a financial interest when it buys or sells securities, whether from/to a third party or an affiliate, including when such third party is you. When FHN Financial sells securities to you in a
Repo transaction, although FHN Financial will pay you an agreed rate on your cash collateral, FHN Financial will use your cash collateral for various purposes and may earn a return on that cash or receive compensation from a third party entity or FHN Financial affiliate. In addition, when you sell securities to FHN Financial in a Repo transaction, you will pay FHN Financial a rate on the cash FHN Financial posts as collateral and FHN Financial in turn may use the purchased securities to facilitate other trading activity within FHN Financial. This trading activity may generate additional compensation for FHN Financial.
FHN Financial may execute customer transactions in fixed income securities (e.g., corporate bonds) as agent, dealer, and riskless principal and customarily assesses a mark-up/mark-down on each transaction. The mark-up/markdown amount charged on a transaction varies and typically relates to the size of the transaction and the type of security transacted. These arrangements may create an incentive for FHN Financial to sell or recommend certain fixed income securities rather than others available to you in the marketplace.
Notice to Canadian Permitted Clients
FHN Financial Securities Corp customers in Canada: Please be advised that FHNSC relies on the International Dealer Exemption in Canada pursuant to NI 31-103. FHNSC considers you a "permitted Client" under National Instrument 31-103. In accordance with the regulation, FHNSC makes the following representations:
1. FHNSC is not registered in Canada;
2. FHNSC’s jurisdiction of residence is the state of Tennessee, United States;
3. The name and address of the agent for service of process of FHNSC in each Canadian Province can be found in Schedule A;
4. There may be difficulty enforcing legal rights against FHNSC because it is a resident outside Canada and all or substantially all of its assets may be situated outside of Canada;
5. If FHNSC is trading with you in reliance upon the international dealer exemption from the dealer registration requirement under NI 31-103, FHNSC is only permitted to trade "foreign securities" with "permitted clients" resident in Canada. A foreign security is a security issued by an issuer incorporated, formed or created under the laws of a foreign (i.e., non-Canadian) jurisdiction or a security issued by a government of a foreign jurisdiction. This serves to put you on notice that you should only place orders with FHNSC for foreign securities in accordance with NI 31-103.
Joli-Coeur Lacasse Sencrl
1134 Grande-Allee Ouest, Suite 600, Quebec Qc, G1S1E5
J.Patrick Bond, Q.C.
2600, 10180-101 Street, Edmonton, Alberta T5J 3Y2
CT Corporation System (Canada)
1500 2 Queen Street East, Toronto, Ontario M5C3G5
Victoria Corporate Records LTD
4529 Melrose Place
Port Alberni, BC V9Y1K7
Municipal Advisor Rule SEC 15Ba1
As a result of the SEC’s Municipal Advisor Rule (effective July 1, 2014), if a firm acts as a municipal advisor to a municipal entity or obligated person with respect to certain investment advice described below, it must be registered as a municipal advisor. A municipal advisor owes a fiduciary duty to the municipal entity to which investment advice is given and must not take any action inconsistent with its fiduciary duty to the municipal entity. Accordingly, firms and their affiliates may be prohibited from effecting certain principal transactions for a municipal entity and obligated person if they serve as their municipal advisor. It is our intention not to act as a municipal advisor, but to conduct arm’s length commercial transactions with you, except for any advisory transactions conducted through FHNMA.
The SEC Rule defines municipal advisory activity to include providing advice on the following activities:
§ Investment of proceeds of municipal securities (commonly referred to as "bond proceeds"); and
§ Municipal escrow investments
FHNCM, a bank dealer, and FHNSC, a broker dealer, are not registered as Municipal Advisors. For the purposes of Section 15B of the Securities Exchange Act of 1934 (Rule 15Ba1 et seq.) (the "Municipal Advisor Rule") relating to the registration of municipal advisors, unless notified to the contrary by contacting us at FHNcert@FHNfinancial.com or by contacting your registered representative, FHNCM and FHNSC will assume that none of the funds you seek to invest through the account(s) you have FHNCM or FHNSC constitute (i) proceeds of municipal securities or (ii) Municipal escrow investments.