Transaction-Specific Pre-trade Disclosure

Dodd-Frank Overview

• Transaction Risk Information, Disclosures and Documents
• Transaction-Specific Pre-trade Disclosure
• Conflicts of Interest
• Daily Marks
• Transaction Reporting
• Future Regulatory Developments
• ISDA Protocols
• Recording of Telephone Lines

Product Disclosures & METs

• Commodity Derivatives Transactions
• Equity Derivative Transactions
• Foreign Exchange Transactions
• Interest Rate Transactions
• Credit Derivative Transactions

Additional Notifications and Disclosures

• Important Information Regarding Marks for Swaps and Security-Based Swaps
• Segregation of Independent Amount
• Address for Complaints
• Certain SBS Transactions with Jefferies International Limited (ANE SBS Transactions)
• Certain SBS Transactions with Jefferies GmbH (ANE SBS Transactions)

1. Material Information.  Jefferies will disclose to you the material terms of each specific proposed swap or SBS and will, if Jefferies deems it to be necessary or appropriate, supplement the general risk disclosures that have been provided to you with additional specific disclosures concerning the material risks and characteristics of the proposed swap or SBS.  Any disclosures of such material terms and additional risk information that are made orally by Jefferies will be confirmed in writing.  We will provide you upon request with a draft of all relevant documentation for a proposed swap or SBS.  In the event of inconsistency between any general and specific disclosures or information provided about a proposed swap or SBS, please rely on the specific disclosures.  If there is any material information that you do not understand, please ask your Jefferies representative for further information or clarification. Please click on the Product Disclosures & METs link on the left to find the general risk disclosures and the relevant transaction-specific disclosures that are applicable to the products that you trade with us. 

2. Scenario Analysis.  Upon request, Jefferies will provide you with a scenario analysis with respect to any proposed swap or SBS with us.  Such a scenario analysis will illustrate how a proposed swap or SBS may perform from your perspective under different assumed factual scenarios that are identified in the analysis.  If you so elect, we will consult with you concerning the design of the scenario analysis, but if you do not affirmatively make such an election, you will receive a form of scenario analysis solely designed by Jefferies.  

Since a scenario analysis does not present all possible outcomes for a proposed swap or SBS, it cannot be relied upon as an indicator of the actual results you will obtain if you enter into the proposed swap or SBS with us.  The information in the scenario analysis also cannot be relied upon as an indicator of the unwind price, if any, which you might have to pay or might receive for terminating the proposed swap or SBS prior to its stated termination date under the same assumptions.  However, unless the terms of a proposed swap or SBS give you a contractual early termination right, you cannot terminate a swap or SBS prior to maturity without the consent of Jefferies and the price quoted for such consent could cause a significant loss under the swap or SBS from your perspective.

3. Pre-trade Mid-Market Marks. As required by CFTC rule 23.431(a)(3)(i), we will provide you with a mid-market mark for each proposed swap at or about the time we provide you with an executable price (although for certain equity derivatives clients we may meet this obligation via a pricing schedule provided in advance, as discussed more fully under Additional Information For Equity Derivative Transactions).  For a full understanding of our pre-trade mid-market marks, please click on the Important Information Regarding Marks for Swaps and Security-Based Swaps under the Additional Notifications and Disclosures on the left.  Each pre-trade mid-market mark will, as required by the rule, exclude amounts for profit, credit reserves, hedging, funding and liquidity reserves and other costs, reserves and adjustments so it is highly unlikely to be the same as the executable price that will be quoted by Jefferies to enter into the proposed swap.

4. Clearing.  You are hereby notified that, if you execute a swap with Jefferies that is intended to be cleared, upon acceptance of the swap for clearing by a “derivatives clearing organization,” as such term is defined in Section 1a(15) of the Commodity Exchange Act and CFTC rules (“DCO”): 

a. The original swap between Jefferies and you is extinguished;
b. The original swap between Jefferies and you is replaced by equal and opposite swaps with the DCO (so that, from your perspective, you will have an identical swap with the DCO and no swap with Jefferies); and
c. All terms of the swap shall conform to the product specifications of the cleared swap established under the DCO’s rules.

If you execute an SBS with Jefferies that is intended to be cleared, upon acceptance of the SBS by a “clearing agency,” as such term is defined in Section 3(a)(23) of the Securities Exchange Act:

a. The original SBS between Jefferies and you is extinguished;
b. The original SBS between Jefferies and you is replaced by equal and opposite swaps with the clearing agency (so that, from your perspective, you will have an identical swap with the clearing agency and no swap with Jefferies); and
c. All terms of the SBS shall conform to the product specifications of the cleared SBS established under the clearing agency’s rules.

5. Clearing Notification.  Pursuant to CFTC rule 23.432, you are hereby further notified that if you are an end-user and have entered into a swap with Jefferies, then:

a. For swaps required to be cleared, an end-user has the sole right to select the DCO at which the swap will be cleared; and
b. For swaps not required to be cleared, an end-user may elect to require clearing of the swap and has the sole right to select the DCO at which the swap will be cleared (although Jefferies has the right to decline to execute the swap on the terms proposed by the end-user).

With respect to any SBS subject to the mandatory clearing requirement under Section 3Ca of the Securities Exchange Act of 1934, you will be provided with a list of names of clearing agencies at which Jefferies is authorized or permitted to clear the SBS. From that list, subject to the terms of any agreement between you and Jefferies and to applicable laws, you have the sole right to select the clearing agency to clear such SBS.

With respect to any security-based swap not subject to the mandatory clearing but eligible for clearing, you will be provided with a list of names of clearing agencies at which Jefferies is authorized or permitted to clear SBS. From that list, subject to the terms of any agreement between you and Jefferies and to applicable laws, you have the sole right to select the clearing agency to clear any such SBS.

For a general list of clearing agencies that clear security-based swaps and which security-based swaps each clearing agency clears, please refer to the following list published by ISDA here:

https://www.isda.org/2021/05/03/current-security-based-swap-clearing

Please note that not every securities-based swaps dealer will be authorized or permitted to clear at each such clearing agency. Jefferies is authorized or permitted to clear SBS at the following CCP (indirectly through its relationships with futures commission merchants): ICE Clear Credit