Disclosures

Information for the Public From Kleon Financial

USA PATRIOT ACT

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 person or entity that opens an account with KLEON. What this means to you is when you open an account with us, you will be asked for your name, address, tax ID #, beneficial ownership and other information which identifies you. There are two categories of beneficial owners for legal entities:

 Direct or Indirect owners with a 25% or more equity interest in the legal
entity.
 Any individual with significant responsibility to control, manage or direct
the legal entity customer (e.g., a Chief Executive Officer, Vice President, Treasurer, etc.)
We are required to notify you that Kleon Financial, LLC, may not be used to provide access to our financial institutions by any party prohibited by the U.S.

Sanctions list, which can be found at: https://sanctionssearch.ofac.treas.gov/.

Additionally, Section 311 of the USA PATRIOT Act prohibits KLEON from opening or maintaining a correspondent account for, or on behalf of the following entities that have been specifically designated by the Financial Crimes Enforcement Network (“FinCEN”) as primary money laundering
concern and any existing correspondent accounts maintained by or on
behalf of these entities must be terminated immediately.
If we become aware that any of these entities are indirectly using the correspondent account you maintain with our financial institution, we will be
required to take appropriate steps to prevent such access including terminating your relationship with KLEON. The entities are as follows:
 Burma
 Democratic People’s Republic of Korea
 Islamic Republic of Iran
 ABLV Bank, AS
 Bank of Dandong
 Commercial Bank of Syria (Syrian Lebanese Commercial Bank)
 FBME Bank Ltd.
 Halawi Exchange Co.
 Kassem Rmeiti and Co. for Exchange

PHONE LINES

As is industry standard practice, KLEON records its phone lines for quality control purposes. If you choose to communicate with KLEON via telephone, you are consenting to the recording of those conversations.

KLEON may be required to turn these recordings over to certain regulatory and/or governmental bodies in response to regulatory inquiries or subpoenas.

RATES

The rates for KLEON’s execution fees are generally documented in an Execution Agreement as an addendum or in an email to the Customer. Rates are subject to change on an individual transaction basis. Rates may vary based on products traded, customer, volume, or other factors within KLEON’s sole discretion.

Those negotiated changes may occasionally be the subject of verbal agreements between KLEON and Customer. All verbally negotiated rate changes must be made on a recorded line to be deemed effective.

Notwithstanding the foregoing, the clearing rates, execution rates, and fees shown on the Customer’s trade recaps, daily statements, invoices and other billing information shall govern. It is imperative that Customers review trade recaps, daily statements, invoices and other billing information and notify their KLEON Broker and/or KLEON promptly of any discrepancies. If you wish to receive trade recaps via email daily, please contact your KLEON Broker to do so.

NOT HELD ORDERS ENTERED WITH FLOOR BROKERS

This Customer Disclosure Document will confirm our understanding of the manner in which you want us to handle orders. Absent specific instructions to the contrary, we understand that when you place an order with us, you are directing that we handle your order on a “not held” basis, which means you are giving us discretion to exercise our brokerage judgment as to time and price, and we will work that order accordingly.

A “not held” order is an order marked “not held”, “take time”or which bears any qualifying notation giving discretion as to the time and/or price at which the order is to be executed. “Held” orders do not permit us to exercise discretion in handling your order. Depending on whether your order is a market order or a limit order, “held” orders obligate us to execute your market order immediately at the then prevailing market price; or to execute your limit order at your limit price (or better), which may not necessarily be the best price that can ultimately be obtained. An order entrusted to our Floor Broker will be considered a Not Held Order, unless otherwise specified as “Held” by you as the Customer prior to the entry of each order on a recorded line, via email or where the order is an order received by the

NYSE electronically and subsequently routed to a Floor Broker pursuant to your instructions. This may under certain circumstances also result in your order not being executed at all.

BEST EXECUTION POLICY

It is a fundamental principle of our business that we will take reasonable steps to obtain, when executing orders, the best possible result for our clients considering:

Price
Costs
Speed
Likelihood of execution and settlement
Size
Nature or any other consideration relevant to the execution of the order

We will also consider when executing orders and when choosing venues, the explicit external cost of a transaction which includes:

Commissions passed on by intermediaries
Fees
Taxes
Exchange fees
Clearing and settlement cost

When providing brokerage services to Customers in relation to financial instruments, we will take sufficient steps to achieve the best overall trading result. This means that we will aim to provide best execution subject to and considering the nature of your order, the prices available in the market, the nature of the market in question and a reasonable assessment of the sometimes overlapping and conflicting execution factors. This may conclude in some cases that price may be less important than sizein illiquid situations. We will as a matter, of course, check and monitor the fairness of prices proposed as well as gather the market data used in the process of estimation of prices.

SEC RULE 606 DISCLOSURE OF ORDER ROUTING INFORMATION

The U.S. Securities and Exchange Commission’s (SEC) client disclosure rule, SEC Rule 606, requires a broker‐dealer that routes orders on behalf of customers to prepare quarterly reports that disclose the identity of the venues to which it routed orders for execution and to provide retail customers in particular with certain enhanced disclosures regarding a broker-dealer’s order routing practices. Broker‐dealers are required to disclose, on customer’s request, where they routed a customer’s individual orders for execution.

We shall, on request of a Customer, disclose to you for:

 Orders in NMS stocks that are submitted on a held basis;

 Orders in NMS stocks that are submitted on a not held basis where KLEON is not required to provide the customer a report under subsection (3) of Reg NMS Rule 606; and

In November 2018, the SEC adopted amendments to Rule 606 of Regulation NMS to require broker-dealers to provide enhanced disclosure of information regarding the handling of their customers’ orders. Specifically, the SEC adopted new Rule 606(b)(3) to require a broker-dealer, upon request of a customer that places not held orders, to provide specific disclosures, for the prior six months, regarding routing and execution of such orders. These new disclosure requirements are subject to two de minimis exceptions – one pursuant to new Rule 606(b)(4) that applies based on the broker-dealer’s NMS stock order flow and another pursuant to new Rule 606(b)(5) that applies based on the customer’s NMS stock order flow.

KLEON has the obligation, and makes every effort, to execute its Customers’ orders at the most favorable terms possible under the facts and circumstances surrounding each Customer order. In addition, KLEON will seek to provide price improvement on its Customers’ orders whenever such opportunities are reasonably available.

Written copies of the Firm’s order routing reports are available free of charge upon request. Please direct written report requests to compliance@kleonfinancial.com

KLEON prepares reports with respect to its Rule 606 reporting. (MPID: KLFX). To review KLEON’s Order Routing Information, compiled by quarter, please go to the following site www.kleonfinancial.com. Supporting Documentation will be made available upon request.

SEC RULE 607 PAYMENT FOR ORDER FLOW DISCLOSURE

KLEON does not receive payment for order flow to direct securities orders to a particular venue, absent specific instructions from the Customer regarding where to route an order. KLEON will use its brokerage judgment to include price, the opportunity for price improvement, available liquidity, and the speed of execution to determine where to route a particular order.

While KLEON does not receive payment for order flow, certain market centers provide rebates or other payments for providing liquidity and charge fees for taking liquidity. Therefore, for any given order or any given time period, KLEON may be either charged fees or receive rebates from a particular execution venue for orders executed there.

FINRA RULE 2267

FINRA Rule 2267 requires that members firms provide customers with the FINRA BrokerCheck Hotline Number (800) 289‐9999, and FINRA web site: https://www.finra.org/ and notify each customer that a brochure describing BrokerCheck is available from FINRA by contacting FINRA.

COMPLAINTS

If you have a complaint regarding the services we provided, please direct it to: Kleon Financial, LLC

Attention: Compliance Department

compliance@kleonfinancial.com

AVERAGE PRICE CONFIRMATIONS

KLEON may execute your order in multiple transactions or aggregate your order with other customer orders and execute them as a block or in multiple
smaller transactions. In these instances, our policy is to provide Customers
with an “average price confirmation” which summarizes the aggregate
amount of securities purchased or sold and the average price of the
executions. We are happy to provide additional information on average price transactions to you upon request.

SEC RULE 13H‐1 LARGE TRADER IDENTIFICATION NUMBER

SEC Rule 13h‐1 requires entities deemed large traders as prescribed by the rule, to submit a filing with the SEC to obtain a Large Trader Identification Number (LTID) and promptly disclose its LTID to registered broker-dealers effecting transactions on its behalf.

If you are a Large Trader, KLEON requests that you provide us with your LTID via email to compliance@kleonfinancial.com. A large trader is defined as any person or entity who exercises directly or indirectly investment discretion over transactions in listed equity and options securities which in aggregate, equal or exceed 2 million shares or $20 million dollars during any calendar day or 20 million shares or $200 million during any calendar month. KLEON reminds Customers that it is the Customer’s responsibility to register with the SEC if Customer qualifies as a large trader and to provide that id (LTID) to KLEON. See https://www.sec.gov/divisions/marketreg/large-trader-faqs.htm for answers to Frequently Asked Questions concerning Large Trader Reporting.

CLIENT REPRESENTATION

In placing orders with KLEON, you are agreeing not to engage in an activity that circumvents laws, rules or regulations including those established by the SEC,, FINRA, NYSE or U.S. Securities Exchanges (e.g. NYSE, NYSE American, NYSE Arca, ). Examples of prohibited conduct that is in contravention of U.S. regulations include, for example, but are not limited to, frontrunning, splitting up orders, bunching, layering or cancelling orders or entering orders, in any manner that gives such orders an unfair participation rights, priority, tape revenue, rebates or serves to manipulate the market.

You agree not to place orders that violate any rules governing the minimum or maximum size order limits established by KLEON, the SEC or the Exchanges where KLEON operates its trade execution business.

KLEON requires that you furnish complete and accurate order information at all times, including but not limited to, proper account origin code, long or short on sell orders, clearing firm, or any restriction on the account by its clearing member or by regulation.

Customer is responsible for making an affirmative determination that a security can be borrowed prior to placing a short sale order with KLEON. KLEON shall in its sole discretion have the right to refuse to execute any short sale order if it does not receive a confirmation from Customer that this procedure has been followed.

NYSE RULE 108

Please be advised that it is Kleon’s policy to permit the Designated Market Maker (DMM) to trade on parity with an order for some or all of the executions associated with filling that order, just as long as the execution of the trade is consistent with the firm’s best execution obligations. In the event that you or your firm objects to this affirmative policy, please do so in writing so that the firm may proceed accordingly.

PRIVACY PLEDGE/DISCLOSURE STATEMENT TO CONSUMERS

We are required by the SEC and the FINRA to provide customers with our Privacy Policy annually.

KLEON does not sell customer information or customer lists to outside marketers.

Information We Collect:

The information we collect is limited to that which enables us to comply with laws and regulations.

We collect information from the following sources:

 Information we may receive from you on applications or other forms, such as your assets, income, and other debt.

 Information we may obtain about your transactions and experiences with our affiliates, others, or us such as your account balance, payment history, parties to transactions.

 Information we may receive from a consumer report, such as information regarding your creditworthiness or credit history.

 Information we may receive through our online services, such as information relating to web site navigation and customer contact.

 Information we have obtained at your request, such as aggregated information from multiple financial service providers.

BUSINESS CONTINUITY AND CONTINGENCY PLANNING

Pursuant to FINRA and NYSE rules, KLEON has created a Business Continuity and Contingency Plan (BCP) to address and guide our response and recovery from a Significant Business Disruption (SBD). Copies of this Summary Disclosure Statement shall be provided to clients at the time they open their accounts. The BCP is subject to modification, and an updated summary will be distributed to our clients when modified. Alternatively, clients may obtain a summary of the BCP via mail, by requesting a copy.

KLEON’s policy is to respond to a SBD by safeguarding employees’ lives and Firm property, making a financial and operational assessment, quickly recovering and resuming operations, protecting all of the Firm’s books and records, and allowing our customers to transact business. In the event that we determine we are unable to continue our business, we will assure customers prompt access to their funds and securities. In the event of an SBD, our staff will operate remotely from their homes.

Significant Business Disruptions (SBDs):

Our plan anticipates two kinds of SBDs, internal and external. Internal SBDs affect only our Firm’s ability to communicate and do business, such as a fire in our building. External SBDs prevent the operation of the securities markets or a number of firms, such as a terrorist attack, a city flood, or a wide‐scale, regional disruption. Our response to an external SBD relies more heavily on other organizations and systems.

Customers’ Access to Funds and Securities:

KLEON does not maintain custody of customers’ funds or securities, which are maintained by the clearing members. Customers will need to contact the clearing member with customer orders or instructions.

Alternate Communications Between the Customers and the Member:

We communicate with our Customers using the telephone, e‐mail, fax, U.S. mail, and in person visits at our Firm or at the other’s location. In the event of an SBD, we will assess which means of communication are still available to us, and use the means closest in speed and form (written or oral) to the means that we have used in the past to communicate with the other party.

Please call us if you have any questions.

Neil Catania (212) 306-1010

Michael Smyth (212) 306-1010

SIPC

Kleon Financial, LLC is a member of the Securities Investor ProtectionsCorporation (SIPC). You may obtain information about SIPC, including the SIPC brochure by contacting SIPC at https://www.sipc.org/ or (202) 371‐8300.

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