Products & Services
Brokerage Service
When you establish a brokerage account with Kayan Securities, Inc., you have the ability to buy, sell
and hold investments within your account. The primary service we provide is our trading capability.
We execute purchases and sales on your behalf, and as directed by you. In a brokerage services
relationship, we execute your order in a agency basis, i.e, no principal trade.
We provide brokerage services through either a cash brokerage account or margin brokerage
account, based on your eligibility and selection. In a cash brokerage account, you must pay for your
purchases in full at the time of purchase. In a margin brokerage account, you must eventually pay
for your purchases in full, but you may borrow part of the purchase price from our clearing firm,
Wedbush Securities, Inc. This is generally referred to as a “margin loan.” The portion of the purchase
price that is loaned to you is secured by securities in your account, also referred to as “collateral.”
You will incur interest costs as a result of your margin activity. While many securities are eligible to
be used as collateral for a margin loan, some assets are not available for margin collateral purposes.
Given that a margin-enabled brokerage account has specific eligibility requirements, unique costs,
and governing regulatory requirements, our default brokerage option is our cash brokerage account.
You must execute a separate Margin Agreement together with Margin Disclosure Agreement before
engaging in margin brokerage activity. This statement contains important information you should
understand and consider before establishing a margin brokerage relationship with us.
We offer many different brokerage account types including Delivery Versus Payment / Receive
Versus Payment (DVP/RVP) accounts, individual and joint accounts, custodial accounts, estate and
trust accounts, partnership accounts, individual retirement accounts and other types of retirement
accounts as outlined in our account agreement(s).
Within your brokerage account, we may also provide other incidental services such as research
reports by your request, and recommendations to buy, sell, or hold assets. You may accept or
reject any recommendation. It is also your responsibility to monitor the investments in your
brokerage account, and we encourage you to do so regularly.
Brokerage Service Models and Products
Kayan Securities, Inc. is an introducing, full-service brokerage firm, clearing through Wedbush. Our
trading desks specialize in trading various securities including equities, options, exchange traded
funds, corporate bonds, and U.S. government securities. Your account(s) will be assigned to a
registered representative(s) who receive and route your orders to Wedbush trading system.
Brokerage Fees and Our Compensation
You will pay transaction-based fees for trades you decide to enter into, such as buying and selling
stocks, bonds, Exchange Traded Products (ETPs), mutual funds, options, exercising options and other
investment purchases and sale. These transaction-based fees are generally referred to as a
“commission,” “sales load,” or a “sales charge.” Transaction-based fees are based on several factors, including, but not limited to:
- Underlying product selection
- Your RR’s service level and account type
- Size of your transaction and/or overall value of your account
- Frequency of your trade activity. These fees are charged to your account at the time of the transaction. Transaction-based fees and costs may present a conflict of interest between you and the registered representative as the registered representative is compensated by such fees and costs which also lower your return in investment. Please review your trade confirmations and statements to ensure that all trading is consistent with your investment objectives.
You will pay fees for various operational services provided to you through your brokerage account.
These fees are set at least annually and communicated to you through information included in your
account statement and other notifications.
We receive direct compensation in connection with your accounts. Direct compensation is primarily
in the form of transaction-based commissions charged to the affected account based on the number
of shares executed in the account. While the commission rate may vary depending on several
factors, such as quantity, liquidity, and price, the information below describe the average
compensation that we receive in connection with various investments that may be available to you.
- Equities, Rights & Warrants, Units (commission ranging from $0.99 to 5% of transaction amounts)
- Fixed Income (commission up to 5.00% of principal amount)
- Options (commission of $1 per contract)
- Mutual Funds (refer to the fund prospectus or offering document for details) o Annual 12b-1 shareholder service fees, also known as trails, are paid to us by the fund out of the fund assets according to the distribution and servicing arrangement to cover distribution expenses and sometimes shareholder service expenses that we may provide on the fund’s behalf. These fees range from 0.00% to 1.00%. o Front-end sales charge fees or Contingent deferred sales charges (CDSC).
- Other fees or no fee: contact us for specific amounts
- Account fees: No annual inactivity fee and no trade confirmation fee
- Transfer Money or Assets: There are fees for returned checks, outgoing wire transfer, outgoing asset transfer and overnight check requests. But no fees for regular check requests and stop payments
- There is expensive fee for physical stock certificate issue
- There is cash management fee like check writing
- There is mailing fee
- There is fee for additional protection purchase in addition to SIPC
- There is SEC fee based on Sec 31 of Securities Exchange Act of 1934. Currently, $22.10 per million dollars of securities sold
Conflicts of Interest
Conflicts of interest exist when we provide brokerage services to you. A conflict of interest is a
situation in which we engage in a transaction or activity where our interest is materially adverse to
your interest.
Transaction-based conflicts In your brokerage account: You pay certain fees (commissions and sales
charges) in connection with the buying and selling of each investment product, including mutual
funds, exchange traded funds, equity securities, and bonds. Where these fees apply, the more
transactions you enter into, the more compensation that we and your financial RR receive. This
compensation creates an incentive for us to recommend that you buy and sell, rather than hold,
these investments. We also have an incentive to recommend that you purchase investment
products that carry higher fees, instead of products that carry lower fees or no fees at all.
Trail Compensation: Ongoing compensation (commonly known as trails, service fees or Rule 12b-1
fees in the case of mutual funds) is typically paid from the assets of the investment product under a
distribution or servicing arrangement and is calculated as an annual percentage of invested assets.
The amount of this compensation varies from product to product. We have an incentive to
recommend that you purchase and hold interests in products that pay us higher trails.
Other compensation: There is no product-related compensation to your RR. There is no proprietary
products, no revenue-sharing. no principal trading at Kayan. There is no hidden fee or cost. All fees
ace disclosed on the trade confirmation ticket or notified in writing separately to you.
Other incentives to RRs: For most of RRs, they receive a fixed rate of commission they generated.
But for some RRs, there is compensation threshold. If the commission they generate exceeds a
certain level, compensation rate is increased. Kayan monitors RR’s activities when the commission
generated is near threshold point.