Hughes & Company's Disclosures:
Updated on November 16th, 2023
Registration Confirmation & Disclosure:
Hughes & Company is registered with the CFTC as an Independent Introducing Broker and is a member of the NFA, regulated by both the NFA and CFTC. Its current NFA Registration Status, and that of its individuals, is listed here.
Before working with any persons or companies involved in the futures industry, it is best practice to consult this link which assists with ensuring the persons or companies you may be working with are properly registered:
https://www.cftc.gov/check
Futures Risk Disclosure:
The risk of loss in trading commodity futures contracts and options on futures, whether on one’s own, or through your account managed by a third party, can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. You may sustain a total loss of the funds that you deposit with your broker to establish or maintain a position in the commodity futures market, and you may incur losses beyond these amounts. A full list of disclosures regarding the risks involved is outlined in your Futures and Exchange-Traded Options Account Application (Account Agreement with FCM) which is required to be fully reviewed and completed in order to open an account and is located below. We recommend investors also visit the NFA website at the following address before opening an account:
https://www.nfa.futures.org/investors/investor-best-practices.html
Managed Futures Disclosure:
Managed Futures may not be suitable for all investors. There is no guarantee that the selection of any advisor(s) will result in profitable performance. Any tear sheets on Managed Futures Programs are provided to us directly by the Advisor(s). We do not guarantee that such information is accurate. You should not rely on any of the information as a substitute for the exercise of your own skill and judgment in making such a decision on the appropriateness of such investments. CTA Disclosure documents contain a complete description of the principal risk factors, any conflicts of interest, and each fee to be charged to your account by the CTA. (Except those programs which are offered exclusively to qualified eligible persons as defined by CFTC regulation 4.7) Due diligence must be performed, then Disclosure documents and all other applicable documents must be reviewed & completed before opening an account managed by a CTA. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results.
Futures Commission Merchant Risk Disclosure:
Hughes & Company does not hold customer funds but acts as an introducing broker to Futures Commission Merchants (FCMs) which hold customer funds. As an independent introducing broker, Hughes & Company can maintain separate clearing agreements with multiple FCMs. It is important to work with well capitalized FCMs. Funds deposited at FCMs are segregated from the funds used in general purposes of the FCM’s business, though there is the possibility an FCM could sustain losses due to business conditions, or due to other clients, which could adversely affect your account. FCM financial information, which provides a window into the financial well-being of FCMs, is able to be accessed here:
https://www.cftc.gov/MarketReports/financialfcmdata/index.htm
Hughes & Company currently opens accounts with and clears business through StoneX Financial Inc., as well as Cunningham Commodities LLC though potentially could add additional FCM relationships in the future.
StoneX Additional Information & Disclosures: https://www.stonex.com/FCStoneDisclosure/
Cunningham Additional Information & Disclosures: https://www.cunninghamllc.com/firm-financial-information.html
Futures and Exchange-Traded Options Account Documentation (FCM Account Agreements):
These contain a full list of disclosures and must be fully reviewed and completed in order to open an account at the FCM. The latest are here:
StoneX (Entities): https://www.hughesandco.ltd/pdf/StoneX_FullApp_Entities.pdf/
StoneX (Individuals): https://www.hughesandco.ltd/pdf/StoneX_FullApp_Individuals.pdf/
Cunningham (Entities): https://www.hughesandco.ltd/pdf/Cunningham_FullApp_Entities.pdf/
Trade Platform Disclosure:
Trade Platforms, for example those outlined on the Hughes & Company website (www.hughesandco.ltd), are not affiliated with Hughes & Company and could experience technical difficulties beyond our control which could adversely affect your account. Traders should have additional safeguards in place to mitigate this risk, which Hughes & Company can assist with implementing. Hughes & Company is not liable for the outage of any particular Trading Platform.
Margin Calls, Position Closure, & Deficit Disclosure:
The ability to withstand losses and to adhere to a particular trading program or to maintain your own positions, in spite of trading losses, are material points which can adversely affect your performance. Should a margin call be generated in your account by your trading or your advisor’s trading, it is expected that per your Account Agreement with FCM, this would be satisfied by depositing additional funds by Wire or ACH to your clearing FCM. Alternatively, you or the Advisor are able to adjust positions to reduce your initial margin requirement to satisfactory levels to meet the margin call.
Should insufficient action be taken by you, or your Advisor, to satisfy a margin call through additional funding or position closure, Hughes & Company reserves the right to close positions until such margin call is satisfied, which may severely affect the Net Liquidation Value of your account. There is no guarantee that even with action undertaken by you, your Advisor, Hughes & Company, or the FCM, that you would be able to avoid an account deficit/debit in times of severe market turbulence or volatility. Sufficient margin excess is recommended at all times.
Should your account experience a deficit/debit balance for whatever reason, per your Account Agreement with FCM you would be required to deposit additional funds by Wire or ACH to your clearing FCM.
Fees, Conflicts of Interest, & Revenue Sharing Disclosure:
Your account(s) at FCM introduced by Hughes & Company are charged a per-contract commission fee. This commission fee may vary from client to client based on the account size, volume, margin usage, and other characteristics of the account. If your account is managed by an Advisor, it may be in line with other accounts of the Advisor, though there is no guarantee that the commissions set for your account will be representative of the weighted average commission for all accounts of said Advisor. Your commission rate can be confirmed at any-time by looking at your most recent statement or by contacting Hughes & Company.
Hughes & Company receives a portion of the commission fees generated in your account, as well as a portion of interest that the FCMs may generate internally. Hughes & Company may establish different IIB Agreements with FCMs, which include commission, clearing, execution costs, and interest sharing with the FCMs. Additionally, Hughes & Company may not maintain, or obtain, an IIB agreement with an FCM of your choice. Therefore, we could have an incentive to recommend one particular FCM over another.
Hughes & Company may share a portion of the Commission and/or Interest Revenue it receives from an FCM with a Commodity Trading Advisor or Commodity Pool Operator, should we have a fee sharing arrangement in place with that particular CTA or CPO. Should this occur, the CTA and/or CPO receiving such revenue-share would need to disclose such agreement in their respective disclosure documents. Additionally, a conflict of interest could occur as a result of this arrangement as the CTA/CPO could trade more frequently in the account with no apparent purpose to increase trade-related revenue. This practice is known as “churning” the account and is not tolerated.
Hughes & Company may also receive a portion of Management and/or incentive fees generated by third party Commodity Trading Advisors in the trading of your account should we have a fee sharing arrangement in place with that particular CTA and introduce you to that CTA. Between the fee sharing with both the FCM as well as potentially the CTA, we could have an incentive to recommend a particular CTA based upon its trading frequency as well as the fee sharing arrangement. However, it is our practice to be agnostic in these regards and any recommendations reflect our good faith judgment at a specific time and any recommendation is subject to change without notice.
Proprietary Trading & Investing Disclosure:
Hughes & Company and its principals and associated persons may trade proprietary accounts on their own behalf. These accounts may take positions that are opposite from you or may compete with you for positions unknowingly, though would be unrelated to and independent of your trading. Hughes & Company is not registered as a Commodity Trading Advisor and does not manage customer accounts. Hughes & Company may also participate in CTA programs itself either directly as an SMA of the CTA, or it can invest via a Fund Vehicle managed by a CPO.
Affiliations Disclosure:
Hughes & Company and its principals are not affiliated with any Futures Commission Merchants.
Hughes & Company and its principals are not affiliated with any Commodity Trading Advisors.
Hughes & Company and its principals are affiliated with one Commodity Pool Operator, The Futures Crowd Inc., which is CFTC Registered and a member of the NFA.
Business Continuity Planning & Disaster Recovery Disclosure:
Hughes & Company has developed a Business Continuity & Disaster Recovery Plan detailing how we will respond to events that significantly disrupt our business, such as a natural disaster or disruption of an integral third party. Should this plan need to be implemented, customers will be notified accordingly. The contact information of our firm would not be expected to change, as is independent of our physical location.
Communications Disclosure:
The ability to communicate with our customers is of the upmost importance. As the introducing broker to your account, Hughes & Company is available for all account inquiries as first point of contact for your account with FCM. Upon completion of an account application with an FCM, with Hughes & Company being the introducing broker, you agree to being contacted for business purposes via the contact information provided by you within the FCM Application. This includes but is not limited to, mailings, telephone calls, and SMS/MMS (text messages). Should your account be managed by an Advisor, then contact will be made with the appropriate advisor first for trade related items, which may resolve any inquiry.
Hughes & Company as well as the FCMs follow all relevant Industry regulations and routinely take industry examinations including AML & Anti-Fraud Provisions. We may be required to contact customers from time-to-time. For example – when there are initial withdrawals requested to an account, phone confirmation will be made with customer, at phone # on file, prior to initiating any new outgoing transfer. This call will occur from our registered main line for Hughes & Company, +1 954 500 0500.
Be cautious of any attempts of fraudsters pretending to be our firm or your FCM. Please call us directly to verify the transaction instructions to your account held at the FCM before initiating any transfers. Telephone Calls, SMS/MMS (text messages), and Emails with Customers are recorded & preserved according to regulatory requirements.
Informational Update Disclosure:
As part of the ongoing responsibilities in maintaining your account, you are required to provide notification to us of any changes to your information. This includes, for example, any changes to your financial or contact information, entity ownership information (if applicable), or any changes to your tax status information as initially documented on W-9, W-8BEN, or W-8BEN-E forms. We will reach out annually to confirm if any such information has changed and will work with you to have this information updated in the most efficient manner possible where needed.
Regulatory, Legal, Tax, & Accounting Disclosure:
Hughes & Company LLC does not provide regulatory, legal, tax, or accounting advice. Any guidance provided is for informational purposes only and is not intended to provide, and should not be relied on for, regulatory, legal, tax, or accounting advice. You should consult your own regulatory, legal, tax, or accounting advisor(s) to obtain independent professional advice regarding your unique situation and any requirement(s).
Acceptance:
This information is provided to ensure customer awareness at time of your introduced account opening at FCM and will be updated as needed. This Disclosure Document & Privacy Policy will be delivered to current customers upon any such updates and at minimum Annually as part of our updated Policies & Procedures as your Introducing Broker. For any inquiries on the above, or to review and/or update your information on file, you can contact us at +1 954 500 0500 or info@hughesandco.ltd
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