Transactions in Over-the-Counter (OTC) Equity Securities

Trading in OTC equity securities carries a high degree of risk and may not be appropriate for all investors. In particular, in addition to other augmented trading risks, OTC equity securities may be "thinly traded" or more illiquid than exchange-listed securities, which tends to increase price volatility and impair your ability to buy or sell within a reasonable period of time without adversely impacting execution price(s). As a self-directed investor, you assume full responsibility for each and every transaction in or for your account and for your own investment strategies and decisions, including with respect to any transactions in OTC equity securities.

To the extent that you participate in any OTC equity security transaction, you acknowledge that you understand that OTC equity securities may be subject to different trading rules and trade on systems and venues different than exchange-listed securities. You may encounter significant delays in executions, reports of executions, and updating of quotations in OTC equity securities. Although market data relating to OTC equity securities may update, displayed pricing information and other OTC equity securities market data may not be current at any given point in time.

E*TRADE, at its sole discretion, may restrict your ability to enter market orders and other order types in certain instances and require you to place limit orders to trade OTC equity securities. Please note that short selling of OTC equity securities is not permitted on E*TRADE. Some order types when used for OTC equity securities may trigger, route, or execute in a manner different than exchange-listed securities. Additional information regarding order type availability and functionality for OTC equity security orders can be found at E*TRADE reserves the right to charge commissions or reject any order in any security including but not limited to OTC equity securities.

Under certain circumstances, OTC equity securities may not be registered with the Securities and Exchange Commission (SEC) and therefore may not be subject to the same reporting, disclosure, and regulatory oversight requirements that apply to SEC-registered securities. Investors are strongly advised to proceed with caution and thoroughly research companies before transacting in OTC equity securities. In some cases, issuers of OTC equity securities may have no obligation to provide information to investors and, in many cases, reliable information regarding issuers of OTC equity securities, their prospects, or the risks associated with the business of such issuers may not be available. As a result, it may be difficult to properly value investments in OTC equity securities. You should exercise additional care and perform thorough diligence before making any investment decision regarding an OTC equity security.

Issuers of OTC equity securities that fail to make current financial and other information publicly available, are insolvent, are under regulatory investigation or suspension, or are otherwise not in compliance with public company reporting requirements may become restricted to the “Expert Market.” In the event an OTC equity security that you own or may own in the future is classified as an “Expert Market” security, you may be prevented from selling that OTC equity security and the value of your OTC equity security may be significantly negatively affected or eliminated entirely. Specifically, opening transactions in “Expert Market” securities are not permitted and closing transactions in “Expert Market” securities will only be permitted under limited circumstances, subject to certain qualifications and restrictions.