Vested Securities Reg BI FAQs - FINAL - 05 APR 2022

Overview:


These disclosure FAQs expand upon the topics addressed in Vested Securities, LLC’s (“Vested Securities”) Form CRS, a copy of which is available online at Vested Form CRS. Vested Securities is registered as a broker-dealer with the U.S. Securities and Exchange Commission (“SEC”) and is a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”). Vested Securities is a wholly owned subsidiary of Vested, Inc. (“Parent”), an exempt reporting adviser (“ERA”). Parent operates and manages the Vested.co platform (the “Platform”). Brokerage and investment advisory services and fees differ, and it is important for you to understand these differences. Free and simple tools are available to research firms and financial professionals at: Investor.gov/CRS, which also provides educational materials about broker-dealers, investment advisers, and investing.


Vested Securities operates as a private placement broker-dealer. Specifically, Vested Securities brings together buyers and sellers of private Forward Contracts (“Forward Contracts”). Typically, these Forward Contracts are between (1) current and former employees or other shareholders (collectively, “Shareholders”) of equity in startup companies (“Portfolio Companies”) and (2) institutional investors that seek to acquire exposure to Portfolio Company stock (“Investors”).


The Platform contains Shareholder educational materials. The Platform allows Shareholders to provide certain information and to request Vested Securities’ personnel to contact them for additional information. Vested Securities personnel may also prospect certain Shareholders.


Capacity:


In what capacity does Vested Securities operate when facilitating execution to Shareholders?


Vested Securities operates solely on an agency basis as a private placement broker-dealer and brokers Forward Contracts between Shareholders and Investors.


In what capacity does Vested Securities operate when facilitating execution to Investors?


Vested Securities operates solely on an agency basis as a private placement broker-dealer and brokers Forward Contracts between Shareholders and Investors.


Does Vested Securities clear or hold customer securities?


Vested Securities does not perform any type of clearing functions for itself or others and does not handle or hold customer funds or securities.


Does Vested Securities provide recommendations to customers?


With respect to Shareholders, Vested Securities may recommend that a Shareholder enter into a Forward Contract based upon the Shareholder’s investment profile and what it believes is in the Shareholder’s best interest. Vested Securities does not have discretion over a Shareholder’s account and therefore the decision to enter into a Forward Contract is up to a Shareholder. Vested Securities does not trade principally for its own account, but it may facilitate Forward Contracts between Shareholders and Investors for which the investment adviser may be an affiliate of Vested Securities.

Does Vested Securities actively monitor its customers’ accounts?


Vested Securities may periodically monitor a Shareholder’s account in connection with a Forward Contract. This monitoring is not done on a regular basis and therefore the absence of further information from Vested Securities should not be relied upon as an implicit recommendation to hold a position.


How will Vested Securities choose investments to recommend to its customers?


Vested Securities bases all investment recommendations on each customer’s investment profile. It is important to note that Vested Securities offers a narrow selection of securities consisting solely of Forward Contracts. All recommendations provided as a broker-dealer shall be in the best interests of Vested Securities’ customers.


Vested Securities personnel may solicit potential Shareholders. When reaching out to these prospective customers, Vested Securities will provide appropriate disclosure, such as Form CRS and these FAQs.


What is Vested Securities’ relevant experience, including your registrations, education, and other qualifications? What do these qualifications mean?


Vested Securities is an SEC-registered broker-dealer and FINRA member. As such, Vested Securities is subject to review and examination by these various regulators and subject to their laws, rules, regulations, and bylaws, as applicable. Additionally, all Vested Securities employees who solicit, propose, and/or consummate transactions with customers are registered representatives with FINRA and certain states and jurisdictions, and must meet certain exam qualification and continuing education requirements.


Fees:


What type of fees and costs are associated with Vested Securities?


Vested Securities typically charges Shareholders a brokerage commission that is a percentage of the notional value of the Forward Contract. The brokerage commission will be prominently displayed to a Shareholder prior to entering into a Forward Contract.


How might these fees and costs affect a Shareholder’s return on a Forward Contract? For example, if a Forward Contract has a notional value of $100,000, how much will go to fees and costs, and how much will be received by the Shareholder?


Any fee incurred by the Shareholder will reduce the amount that a Shareholder receives in connection with a Forward Contract. Shareholders will pay the fee whether they make or lose money on a Forward Contract. For example, if a Shareholder enters into a Forward Contract with a value of $100,000, Vested Securities will typically charge a $10,000 brokerage commission.


As a Shareholder, please make sure you understand what fee you are paying.

Affiliates


What affiliates of Vested Securities provide financial services?


Vested Securities is wholly owned by its Parent. For further information please contact us at securities@vested.co. Alternatively, additional information regarding certain of the below affiliates that are investment advisers is available through www.Adviserinfo.sec.gov.


Vested, Inc. is a high-growth technology company operating in the financial space that helps current and former employees of startup companies get the most out of their equity compensation by providing tools to these employees to help them manage and evaluate their equity.


Conflicts of Interest:


Vested Securities, acting in an agency broker-dealer capacity, is committed to ensuring that both Vested Securities and its financial professionals always act in the best interest of its retail customers and does not place its financial or other interests ahead of its customers when making a recommendation. Conflicts are caused by a variety of arrangements, including but not limited to when Vested Securities’s affiliated entities (“Vested Affiliates”) play a role in a transaction.


What conflicts of interest exist for Vested Securities and Vested Affiliates?


Vested Securities brokers Forward Contracts between Shareholders and Investors that may be advised by Vested, Inc. Vested Affiliates may also receive fees from each of the relevant Investors that they advise. In this capacity, Vested Securities may receive an economic benefit from such fees. This presents a conflict of interest for Vested Securities with respect to such activities.


In addition, since a portion of the potential profits derived from Vested Affiliates will indirectly benefit Vested Securities, there is an incentive to broker Forward Contracts between Shareholders and Investors and to promote Forward Contract transactions to Shareholders with greater frequency and for larger amounts than otherwise may be advisable.


How does Vested Securities earn fees?


Vested Securities earns brokerage commissions from Shareholders based on the size of a securities transaction brokered on behalf of a Shareholder. Therefore, Vested Securities is incented to encourage customers to transact at the highest frequency and largest size.


How might your conflicts of interest affect me, and how will you address them?


Vested Securities mitigates all of the foregoing conflicts of interest by disclosing all compensation received by Vested Securities to Shareholders as well as the clients and customers of Vested Affiliates. Further, Vested Securities is subject to extensive policies and procedures, as part of, and in addition to, applicable FINRA and SEC regulations and oversight.

Is Vested Securities subject to Best Execution Obligations?


As a broker-dealer, Vested Securities is obligated to meet best execution obligations. That being said, Forward Contracts are only executed following negotiation between a Shareholder and an Investor and all Forward Contracts are brokered by Vested Securities on a non-discretionary basis.


How do your financial professionals make money?


Vested Securities’ financial professionals receive a salary and have the possibility of earning a discretionary bonus based upon individual job performance and our overall performance. Vested Securities’ financial professionals, while not directly compensated based upon the performance of Vested Affiliates, do indirectly benefit from the services and revenues generated from such affiliate activity. This creates a potential conflict of interest.


Additional Information:


If you would like the most current information about Vested Securities or to request a copy of additional disclosures please see our website or contact us at securities@vested.co.


For additional information about securities investments generally, you may visit the SEC’s website at Investor.gov.


The equity tools on this website are for illustrative purposes only and are not necessarily indicative of future results. No representation is made that results that are similar to those shown can be achieved. Any screenshots or images of these tools contain hypothetical outputs and do not reflect any specific circumstances or anticipated results. See additional disclosures below for more information.

Check the background of Vested Securities, LLC on FINRA's BrokerCheck and see the firm's Customer Relationship Summary here.

By using this website, you understand the information being presented is provided for informational and educational purposes only and agree to our Terms of Use and Privacy Policy. Vested, Inc. (together with its affiliates, “Vested”) relies on information from various sources believed to be reliable, including users and third parties, but cannot guarantee the accuracy and completeness of that information.

Vested, Inc. is a technology company as well as an adviser regulated by the U.S. Securities and Exchange Commission as an exempt reporting adviser. Vested, Inc. also provides free tools to help startup employees understand and make the most of their equity compensation. This includes the Equity Dashboard, Outcome Simulator, Fairness Calculator and AMT Calculator. All company data, including but not limited to valuation, projections and common share price, are estimates derived using public data sets, without any endorsement or influence from the company, and should be used only for informational and educational purposes. These data should not be used as investment advice. The Equity Dashboard allows you to enter your option grant and monitor your equity. The Outcome Simulator allows you to create hypothetical exit scenarios with your own inputs such as exit date and valuation. The Fairness Calculator helps you to see how your option grant compares to those received by other startup employees with similar roles at similar companies. The AMT Calculator helps you understand the possible impact of exercising options on possible Alternative Minimum Tax scenarios. All these tools are for illustrative purposes only and do not constitute tax, investment, financial or any other actionable advice.

While Vested, Inc. is not a broker-dealer, its affiliated subsidiary, Vested Securities, LLC (“VSL”), is a registered broker-dealer and member FINRA/SIPC. Prepaid Forward Contracts (“PFCs”), when brokered, are done so by VSL between share- or option-holders and funds. VSL does not have a direct relationship with investors in the funds.

Nothing on this website should be construed as an offer, solicitation of an offer, or recommendation to buy, sell or hold any security. All investments involve risk, and the past performance of a security or financial product does not guarantee future results or returns. PFCs are highly speculative and are less liquid than publicly traded securities. You should consider these risks and your investment objectives carefully before investing or participating in any securities transaction. Vested does not provide legal, tax or financial planning advice.

Company logos are provided by Clearbit. All company names, logos and brands that appear on this website are property of their respective owners. All company, product and service names and logos used in this website are for identification and informational purposes only. Use of these names, logos and brands does not imply endorsement.
Form CRS Reg BI FAQs - CIP Public Notice -BCP Public Disclosure Statement