Regulation Best Interest Disclosure Obligation
Member of FINRA
Percent Securities, LLC
145 East 57th Street,
New York, NY 10022
March 2024
Regulation Best Interest (Reg BI) disclosures are designed to give the investor a better understanding of how Percent Securities LLC (referred to as “the firm” or “we” or “us”) offers private securities to including:
- The type of products and services we might offer you
- The fees or expenses that might be associated with those offers
- Material facts as to our client relationships and conflicts we may have
Capacity
Percent Securities LLC is registered as a broker-dealer with the Securities and Exchange Commission(“SEC”), and a member of FINRA. The firm offers brokerage services through Percent Technologies’ online platform (“Platform”). The firm brokers private debt placements to accredited investors. We act as placement agent for companies, issuers and borrowers seeking to raise private debt capital from investors. Securities transactions on the Platform are self-directed. However, we also make certain offerings available to investors off the platform as well.
Fees and Costs
The firm does not charge investors any fees directly, however, it does charge the companies, issuers or borrowers raising capital a placement agent fee that varies on each transaction. This placement agent fee is disclosed in each transaction’s respective private placement memorandum and is an indirect cost to investors as many companies, issuers and borrowers consider their all-in cost of capital when making decisions on what level of return they want to make available to investors.
Type and Scope of Services
Private securities are illiquid. Understanding your current financial position helps us to evaluate whether buying a private placement makes sense for an investor’s portfolio. Percent Securities, LLC does not provide account monitoring services.
We limit our securities offerings to only approved products. We offer the following services:
- Serving as placement agent on behalf of issuers in private securities to accredited investors.
The offering may require a minimum investment amount to participate in the offering. Investment opportunity minimums are disclosed in the offering materials.
Other Material Facts
The offerings agented by Percent Securities LLC are made generally to give investors exposure to private funds. Investments in private funds:
- Are subject to the complete loss of your investment;
- Can be highly illiquid because no trading market exists;
- Are subject to restrictions on resale, transfer, withdrawal or redemption of interests; and
- Can be hard to value.
The funds are offered through a confidential private placement memorandum (“PPM”). The PPM provides important detailed information regarding risks and other matters and must be read carefully before a decision is made as to whether to invest.
Conflicts of Interest
Percent Securities, LLC attempts to prevent and limit our conflicts of interest; however, conflicts of interest may exist as a result of the nature of the business that we do.
- We act as placement agent for unregistered securities and are paid a commission, based on the successful placement of the securities, which incentivizes us to offer these securities.
- Our employees earn a salary as well as a discretionary bonus based on their individual job performance and the performance of Percent Securities, LLC and its affiliates. Employees may have an incentive to generate business to enhance company and individual performance.
- Potential conflicts of interest may arise in the process of allocating securities to clients in cases where there is limited supply incentivizing us to favor one client over another.
- We receive transaction fees typically from the manager, who may be our affiliate, and receive an indirect benefit from the management fees it generates.
Our policies and procedures are designed to identify and preclude us from engaging in transactions borne from inappropriate incentives. We have adopted policies and procedures relating to, among other things, prohibited acts, insider trading, anti-money laundering, gifts and entertainment, outside business activities, and client communications to identify and mitigate conflicts of interests with investors.