Nord Kaneshie Forex Ufficio Limitata Governo

Atlantico e Pacifico Forex Bureau limitata Atlantico e Pacifico Forex Limited è stata costituita nel 1992, iniziava la sua attività come un commerciante di cambio nel 1993. La società è interamente di proprietà del gruppo 1 ° africano Limited. Sotto la gestione strategica del suo direttore generale, l'On. Gifty Affenyi-Dadzie (MRS), il team di gestione dedicato ha attraverso l'innovazione e la trasparenza, trasformato l'azienda nel suo stato attuale come allora leader forex ufficio nella metropoli di Tema e ha assicurato una crescita costante della redditività della società. HON gifty AFFENYI - Dadzie (MRS): La visione della società è quello di espandere il suo funzionamento attraverso l'apertura di più rami all'interno di Accra e Tema comuni e ad adoperarsi per raggiungere l'eccellenza attraverso il servizio innovativo e dedicato ai suoi clienti valutati. Colazione con GC100 CEO Ghana Investment Promotion Center (Ufficio del Presidente) Servizi pubblici ministeri Commissione Building, Accra, Ghana infogipcghana 233 302 665 125-9 Copyright 2017 169 Ghana Investment Promotion Centre (GIPC). Tutti i diritti Reserved. Investor Pubblicazioni Guida al broker-dealer Divisione Registrazione di Trading e Mercati 1 US Securities and Exchange Commission aprile 2008 Sommario Introduzione che è tenuto a Registrati Chi è un quotBrokerquot Chi è un quotDealerquot Cosa fare se si pensa che si può essere un broker o di un broker dealer e concessionari, in generale devono registrarsi presso la SEC quotAssociated Personsquot di un broker-dealer Intrastato broker-dealer broker-dealer che limitano la loro attività per Escluso ed esenti Securities broker-Dealers necessario registrarsi prima vendita non registrati Titoli - Compreso privato posizionamenti (o offerte regolamento D) Issuer39s esenzione Esteri broker-dealer condizioni di esenzione quanto riguarda Broker e Rivenditori di governo e comunali titoli, inclusi gli accordi di riacquisto Regole speciali che si applicano alle banche e altre istituzioni finanziarie Insurance Agency Networking Real Estate Securities and Real Estate Broker-BrokersAgents I rapporti del rivenditore con Affinity Gruppi come registrarsi come Requisiti broker-dealer Modulo BD SRO appartenenza SIPC appartenenza Stato associato Persone Successore broker-dealer convalida il ritiro dalla registrazione cancellazione della registrazione di sicurezza regolamento Futures comportamento di broker-dealer per la lotta antifrode Disposizioni dovere di fair requisiti di idoneità Trattare dovere di Best Divulgazione Regola Conferma Esecuzione clienti di condizioni di credito Limitazioni delle vendite allo (regolamento SHO) Trading Durante un Offering (regolamento M) Restrizioni Restrizioni insider trading su titoli operazioni di private analisti e regolamento AC Trading dei membri di scambi, Broker e Rivenditori Estensione Credit sulle nuove emissioni regolamento NMS Ordine obblighi di esecuzione del regolamento ATS: broker-dealer Trading Systems Penny Regole archivio Privacy dei consumatori informazioni finanziarie (regolamento SP) Consulente per gli investimenti registrazione arbitrato responsabilità finanziaria dei broker-dealer netto Capitale Regola L'utilizzo di saldi clienti Protezione cliente ha richiesto libri , verbali e le relazioni Criteri di valutazione dei rischi Altri requisiti Esami e requisito ispezioni smarriti o rubati Titoli Programma impronte digitali L'uso dei mezzi elettronici per il riciclaggio di broker-dealer firme elettroniche Anti-Money Program Office of Foreign Assets Control business Continuity Plans Dove per ulteriori informazioni I. INTRODUZIONE del Securities Exchange Act del 1934 (quotExchange Actquot o quotActquot) governa il modo in cui i mercati dei titoli nation39s e dei suoi intermediari e rivenditori operano. Abbiamo preparato questa guida per riassumere alcune delle disposizioni rilevanti della legge e le sue regole. Troverete informazioni su se è necessario registrarsi come un broker-dealer e come è possibile registrarsi, così come le norme di comportamento e la responsabilità finanziaria regole che broker-dealer deve seguire. ATTENZIONE mdash assicurarsi di seguire tutte le leggi e REGOLE Sebbene questa guida mette in evidenza alcune disposizioni della legge e le nostre regole, non è completo. Mediatori e agenti, e le loro persone associate, devono essere conformi a tutti i requisiti applicabili, compresi quelli del US Securities and Exchange Commission (quotSECquot o quotCommissionquot), così come le esigenze di tutte le organizzazioni di autoregolamentazione alle quali appartengono i mediatori e agenti, e non solo quelli riassunti qui. Il personale SEC è pronta a rispondere alle vostre domande e vi aiutano a rispettare le nostre regole. Dopo aver letto questa guida, se avete domande, non esitate a contattare l'Ufficio di interpretazione e orientamento al numero (202) 551-5777 (e-mail tradingandmarketssec. gov) o l'ufficio regionale della SEC nella vostra zona. Troverete un elenco di numeri di telefono utili, alla fine di questa guida, o sul sito web SEC39s a sec. govcontact. shtml. Si potrebbe desiderare di consultare un avvocato privato che abbia familiarità con le leggi federali sui titoli, per assicurare che si attenga a tutte le leggi e regolamenti. Il personale SEC non può agire come un avvocato individual39s o broker-dealer39s. Mentre il personale tenta di fornire una guida per telefono a persone che stanno facendo indagini, la guida è informale e non vincolante. orientamento formale può essere ricercata attraverso un'indagine scritta che è coerente con le linee guida SEC39s per le richieste di non intervento, interpretative, e exemptive. II. Che ha l'obbligo ISCRIVERSI La maggior parte quotbrokersquot e quotdealersquot deve registrarsi presso la SEC e partecipare a una quotself-normativo organizzazione, quot o SRO. Questa sezione illustra i fattori che determinano se una persona è un intermediario o il commerciante. Esso descrive anche i tipi di broker e rivenditori che non devono registrarsi presso la SEC. Gli organismi di autodisciplina sono descritti nella Parte III, qui di seguito. Una nota sulle banche: The Exchange Act contiene anche disposizioni speciali relative a intermediazione e che trattano attività delle banche. Si prega di vedere le sezioni 3 (a) (4) (B) e 3 (a) (5) (C) e relative disposizioni, e consultarsi con un avvocato. Aspetti dell'attività commerciante banca sono discussi in una pubblicazione edita dalla divisione SEC39s di Trading e Mercati, intitolato quotStaff Guida Compliance per banche su Dealer eccezioni previste dalla legge e regole, quot, che è disponibile sul sito web SEC39s a: sec. govdivisionsmarketregbankdealerguide. htm. Banca attività di intermediazione è rivolta nel regolamento R, adottato congiuntamente dalla Commissione e il Consiglio dei governatori della Federal Reserve System. Vedere Exchange Act stampa n ° 56501 (24 settembre 2007) sec. govrulesfinal200734-56501.pdf. A. Chi è una sezione quotBrokerquot 3 (a) (4) (A) della legge definisce generalmente una quotbrokerquot ampiamente come qualsiasi persona impegnata in attività di effettuare transazioni in titoli per conto di altri. A volte si può facilmente determinare se qualcuno è un broker. Per esempio, una persona che esegue le operazioni per gli altri in una borsa valori è chiaramente un broker. Tuttavia, altre situazioni sono meno chiare. Ad esempio, ciascuna delle seguenti individui e le imprese potrebbe essere necessario registrarsi come un mediatore, a seconda di una serie di fattori: quotfinders, broker quot quotbusiness, quot e di altri individui o enti che svolgono le seguenti attività: ricerca di investitori o clienti per, fare i rinvii a, o commissioni di scissione con broker-dealer registrati, società di investimento (o fondi comuni di investimento, tra cui hedge fund) o di altri intermediari mobiliari trovare clienti di investment banking per registrati broker-dealer ricerca di investitori per quotissuersquot (enti incaricati del rilascio di titoli), anche in un capacità quotconsultantquot Impegnarsi in, o la ricerca di investitori per il capitale di rischio o finanziamenti quotangelquot, tra cui collocamenti privati ​​trovare acquirenti e venditori di imprese (vale a dire le attività relative alle fusioni e acquisizioni in cui i titoli sono coinvolti) i consulenti di investimento e consulenti finanziari esteri broker-dealer che non possono contare on Rule 15a-6 ai sensi della legge le persone che operano o controllo elettronico o altre piattaforme per il commercio di valori mobiliari persone che commercializzano interessi di investimento immobiliare, come ad esempio gli interessi di locazione-in-comune, che sono persone titoli che fungono da quotplacement (discusso sotto) agentsquot per collocamenti privati ​​di persone titoli che le operazioni di mercato o di effetto in prodotti assicurativi che sono titoli, come rendite variabili, o di altri prodotti di investimento che sono persone di titoli che le operazioni in titoli ad effetto per conto di terzi a pagamento, anche quando quelle altre persone sono amici o familiari le persone che forniscono servizi di supporto alle registrati broker-dealer e le persone che agiscono come contraenti quotindependent, quot ma non sono quotassociated personsquot di un broker-dealer (per informazioni sulle persone quotassociated, quot vedi sotto). Al fine di determinare se qualcuno di questi individui (o qualsiasi altra persona o azienda) è un broker, guardiamo le attività che la persona o azienda esegue effettivamente. Si possono trovare analisi delle varie attività nelle decisioni dei tribunali federali e la nostra non-azione e lettere interpretative. Ecco alcune delle domande che si dovrebbe chiedere per determinare se si sta agendo come un mediatore: Ti partecipare a parti importanti di una transazione di titoli, tra cui sollecitazione, la negoziazione, o l'esecuzione della transazione Il vostro compenso per la partecipazione al dell'operazione dipendono sopra, o è correlato a, il risultato o la dimensione della transazione o accordo si riceve commissioni finali, come ad esempio 12b-1 tasse si riceve qualsiasi altro compenso transazioni correlate sono altrimenti impegnati in attività di effettuare o agevolare titoli transazioni si fa a gestire i titoli o fondi di altri in relazione a transazioni in titoli una risposta quotyesquot a nessuna di queste domande significa che potrebbe essere necessario registrarsi come un mediatore. B. Chi è un quotDealerquot A differenza di un broker, che agisce in qualità di agente, un commerciante agisce in qualità di mandante. Sezione 3 (a) (5) (A) della legge definisce generalmente una quotdealerquot come: qualsiasi persona impegnata in attività di acquisto e vendita di titoli per conto proprio, attraverso un intermediario o altro. La definizione di quotdealerquot non include un quottrader, quot che è, una persona che compra e vende titoli per la sua conto proprio, sia individualmente che a titolo fiduciario, ma non come parte di una attività regolare. Gli individui che comprano e vendono titoli per se stessi in generale sono considerati commercianti e non commercianti. A volte si può facilmente dire se qualcuno è un commerciante. Ad esempio, una società che pubblicizza pubblicamente che fa un mercato dei titoli è ovviamente un rivenditore. Altre situazioni possono essere meno chiaro. Ad esempio, ciascuna delle seguenti individui e le imprese potrebbe essere necessario registrarsi come commerciante, a seconda di una serie di fattori: una persona che si propone come disposta a comprare e vendere un determinato titolo su base continua di una persona che gestisce un libro abbinato di pronti contro termine o di una persona che emette o proviene titoli che anche lui compra e vende. Ecco alcune delle domande che si dovrebbe chiedere per determinare se si sta agendo come un rivenditore: Ti pubblicizzare o comunque far sapere agli altri che siete nel business della compravendita di titoli Ti fanno affari con il pubblico (sia al dettaglio o istituzionale ) si fa a fare un mercato, o prezzi citazione sia per gli acquisti e le vendite di uno o più titoli ti partecipare a un groupquot quotselling o comunque sottoscrivere titoli ti fornire servizi agli investitori, come gestire il denaro e titoli, l'estensione del credito, o una raccomandazione di investimento si fa a scrivere i contratti derivati ​​che sono titoli una risposta quotyesquot a nessuna di queste domande significa che potrebbe essere necessario registrarsi come rivenditore. C. Che cosa fare se si pensa di poter essere un broker o di un rivenditore se si sta facendo, o può fare, una qualsiasi delle attività di un intermediario o il commerciante, si dovrebbe sapere se è necessario registrarsi. Informazioni sul processo di registrazione broker-dealer è fornito di seguito. Se non si è certi, si consiglia di rivedere le interpretazioni SEC, consultare un professionista privato, o chiedere consigli dalla Divisione SEC39s di Trading e Mercati chiamando il numero (202) 551-5777 o inviando una e-mail a tradingandmarketssec. gov . (Si prega di essere sicuri di includere il tuo numero di telefono). Nota: Se si agirà come quotbrokerquot o quotdealer, quot non si deve esercitare la sua attività titoli finché non si è registrato correttamente. Se sei già impegnata in attività e non sei ancora registrato, si dovrebbe cessare tutte le attività finché non si è registrato correttamente. Per ulteriori informazioni, si prega di vedere la Parte II. D e parte III, qui di seguito. D. Broker e concessionari, in generale devono registrarsi presso la SEC Sezione 15 (a) (1), della legge generalmente renda illegale per qualsiasi intermediario o il commerciante di utilizzare la posta (o qualsiasi altro mezzo di commercio interstatale, come il telefono, fax , o Internet) per quoteffect eventuali operazioni in, o per indurre o tentare di indurre l'acquisto o la vendita di qualsiasi securityquot a meno che tale intermediario o il commerciante è registrata presso la Commissione ai sensi della Sezione 15 (b) della legge. Ci sono alcune eccezioni a questa regola generale che vedremo di seguito. In aggiunta, discutiamo le particolari esigenze di registrazione che si applicano ai broker-dealer di titoli di Stato e comunali, compresi i pronti contro termine, al di sotto. 1. quotAssociated Personsquot di un broker-dealer Chiamiamo le persone che lavorano per un broker-dealer registrato quotassociated persons. quot Questo è il caso se tali individui sono impiegati, imprenditori indipendenti, o sono altrimenti lavorando con un broker-dealer. Questi individui possono anche essere chiamato quotstock brokersquot o representatives. quot quotregistered Anche se persone associate di solito non c'è bisogno di registrarsi separatamente presso la SEC, che devono essere adeguatamente sorvegliati da un broker-dealer attualmente registrato. Possono inoltre essere necessario registrarsi con le organizzazioni di autoregolamentazione di cui il datore di lavoro è un mdash membro, ad esempio, la Financial Industry Regulatory Authority, Inc. (quotFINRAquot) (fka National Association of Securities Dealers, Inc. (quotNASDquot)) o una borsa valori nazionale. Nella misura in cui le persone associate si impegnano in attività di titoli al di fuori del controllo del loro broker-dealer, che avrebbero dovuto registrarsi separatamente come broker-dealer. Parte III, qui di seguito, fornisce una discussione su come registrarsi come broker-dealer. Noi non fanno distinzione tra i dipendenti e altre persone associate a fini di titoli. Broker-dealer devono supervisionare le attività in titoli del loro personale, indipendentemente dal fatto che siano considerati quotemployeesquot o contractorsquot quotindependent come definito dalla legge statale. See. per esempio, in materia di William V. Giordano. Securities Exchange Act stampa n ° 36742 (19 gennaio 1996). La legge inoltre, non consente soggetti non registrati per ricevere commissioni attive a nome di un rappresentante registrato. Ad esempio, le persone associate non possono costituire una entità separata per ricevere controlli della Commissione. Un'entità non registrato che riceve commissioni attive in questa situazione deve registrarsi come broker-dealer. See. per esempio, Wolff Juall Investments, LLC (17 maggio 2005). In determinate circostanze, gli enti non registrati possono impegnarsi in servizi di amministrazione del libro paga che coinvolgono broker-dealer. See. per esempio, la lettera Re: ADP TotalSource, Inc. (4 dicembre 2007). In tali circostanze, il datore di lavoro broker-dealer in genere assume e supervisiona tutti gli aspetti del lavoro employees39 e utilizza l'amministratore del libro paga e benefici solo come un mezzo per centralizzare i servizi del personale. 2. Intrastato broker-dealer Un broker-dealer che conduce tutta la sua attività in uno Stato non deve registrarsi presso la SEC. (Registrazione di Stato è un altro discorso. Si veda la Parte III. Sotto). La deroga prevista intrastate attività di broker-dealer è molto stretta. Per qualificarsi, tutti gli aspetti di tutte le operazioni devono essere effettuate entro i confini di uno stato. Ciò significa che, senza registrazione SEC, un broker-dealer non può partecipare a qualsiasi operazione eseguita in una borsa valori nazionale. Un broker-dealer che altrimenti soddisfa i requisiti dell'esenzione broker-dealer intrastate non cesserebbe di qualificarsi per il intrastate esenzione broker-dealer solo perché ha un sito web che può essere visto da out-of-state persone, a condizione che la broker-dealer prende le misure ragionevolmente progettati per assicurare che la sua attività rimane esclusivamente intrastate. Tali misure potrebbero includere l'uso di disclaimer indicando chiaramente che l'attività di broker-dealer è esclusivamente intrastate e che il broker-dealer possono agire solo per o con, e di fornire servizi di broker-dealer di una persona nel suo stato, fino a quando la broker-dealer non fornisce servizi di broker-dealer a persone che indicano che sono, o che il broker-dealer ha motivo di ritenere sono, non all'interno dello stato broker-dealer di residenza. Queste misure non sono destinati ad essere esclusivo. Un broker-dealer potrebbe adottare altre misure ragionevolmente a garantire che non fornisce servizi di broker-dealer a persone che non sono all'interno dello stesso stato come il broker-dealer. Tuttavia, un business intermediarys non sarebbe esclusivamente intrastatale se ha venduto titoli o fornito qualsiasi altro servizio di broker-dealer ad una persona che indica che è, o che il broker-dealer ha ragione di credere è, non è nello stato broker-dealer di residenza. Per ulteriori informazioni riguardanti l'uso di Internet da parte intrastatali broker-dealer, vedere sec. govrulesfinal201633-10238.pdf. Una parola su titoli municipali e governativi. Non vi è alcuna eccezione intrastatale dalla registrazione per commercianti di valori mobiliari comunali o statali intermediari di titoli e rivenditori. 3. broker-dealer che limitano la loro attività per Esclusi ed esenti Titoli Un broker-dealer che effettua transazioni di business solo in commercial paper, accettazioni bankers39, e cambiali commerciali non ha bisogno di registrarsi presso la SEC ai sensi della Sezione 15 (b) o di qualsiasi altra sezione della legge. D'altra parte, le persone transazioni commerciali solo in determinati titoli quotexempted, quot come definito nella sezione 3 (a) (12), della legge, non c'è bisogno di registrarsi ai sensi della Sezione 15 (b), ma potrebbe essere necessario registrarsi virtù di altre disposizioni della legge. Ad esempio, alcuni broker-dealer di titoli di Stato, che sono quotexempted titoli, quot devono registrarsi come mediatori dei titoli di Stato o concessionari di cui alla sezione 15C della legge, come descritto nella Parte II. E, qui di seguito. 4. broker-dealer necessario registrarsi prima vendita non registrati Titoli ndash compresi i tirocini private (o del regolamento D offerte) Un titolo venduto in una transazione che è esente dalla registrazione ai sensi del Securities Act del 1933 (il quot1933 Actquot) non è necessariamente un securityquot quotexempted sotto Act. Per esempio, una persona che vende titoli che sono esenti dall'obbligo di registrazione ai sensi del regolamento D della Legge del 1933 deve comunque registrarsi come broker-dealer. In altre parole, agentsquot quotplacement non sono esenti da registrazione broker-dealer. 5. Issuer39s quotExemptionquot e associati Persone di emittenti (Regola 3a4-1) emittenti in genere non sono quotbrokersquot perché vendono titoli per i propri account e non per i conti degli altri. Inoltre, gli emittenti in genere non sono quotdealersquot perché non comprano e vendono i loro titoli per i propri clienti come parte di una attività regolare. Gli emittenti le cui attività va oltre la vendita dei loro titoli di proprietà, tuttavia, hanno bisogno di considerare se avrebbero bisogno di registrarsi come broker-dealer. Questo include gli emittenti che acquistano i loro titoli da parte degli investitori, così come gli emittenti che operano in modo efficace i mercati nei loro titoli di proprietà o in titoli le cui caratteristiche o condizioni possono cambiare o essere modificato. La cosiddetta esenzione issuer39s non si applica al personale di una società che abitualmente si impegnano in attività di effettuare transazioni in titoli per la società o le società collegate (come partner generali che cercano investitori in società in accomandita semplice). I dipendenti e le altre persone significative di un emittente che assistono nella vendita dei propri titoli può essere quotbrokers, quot soprattutto se sono pagati per la vendita di tali titoli e hanno poche altre funzioni. Act regola Scambio 3a4-1 prevede che una persona associata (o dipendente) di un emittente che partecipa alla vendita dei titoli issuer39s non avrebbe dovuto registrarsi come broker-dealer se quella persona, al momento della partecipazione: (1) non è soggetto a una squalifica quotstatutory, quot come definito nella sezione 3 (a) (39) della legge (2) non viene compensato con il pagamento di commissioni o altri compensi basati direttamente o indirettamente, su transazioni in titoli (3) non è un associato persona di un intermediario o il commerciante e (4) limita la sua attività di vendita come stabilito nella regola. Alcune emittenti offrono programmi di reinvestimento dei dividendi e di acquisto di azioni. In determinate condizioni, un emittente può acquistare e vendere i propri titoli attraverso un programma di reinvestimento dei dividendi o di acquisto di azioni senza registrarti come un broker-dealer. Queste condizioni, per quanto riguarda sollecitazione, commissioni e spese, e la gestione dei fondi participants39 e titoli, sono spiegati nel Securities Exchange Act stampa n ° 35041 (1 dicembre 1994), 59 FR 63393 (quot1994 STA Letterquot). Anche se il regolamento M 2 sostituito Rule 10b-6 e superata la STA Lettera, 1994, le posizioni del personale prese in questa lettera per quanto riguarda l'applicazione della sezione 15 (a) della legge Exchange rimangono in vigore. Vedere 17 CFR 242,102 (c) e Securities Exchange Act stampa n ° 38067 (20 dicembre 1996), 62 FR 520, 532 n.100 (3 gennaio 1997). 6. Esteri broker-dealer esenzione (Rule 15a-6) La SEC utilizza generalmente un approccio territoriale nell'applicazione obblighi di registrazione alle operazioni internazionali di broker-dealer. Secondo questo approccio, tutti i broker-dealer fisicamente che operano negli Stati Uniti che inducono o tentare di indurre operazioni in titoli devono registrarsi presso la SEC, anche se le loro attività sono dirette solo agli investitori stranieri al di fuori degli Stati Uniti. Inoltre, stranieri broker-dealer che, al di fuori degli Stati Uniti, indurre o tentare di indurre operazioni in titoli da parte di persone negli Stati Uniti, o che utilizzano i mezzi o strumenti di commercio interstatale degli Stati Uniti per questo scopo, anche deve registrare. Ciò include l'uso di internet per offrire titoli, sollecitare operazioni su titoli, o pubblicizzare servizi di investimento ai brevetti persone. Vedere Securities Exchange Act stampa n ° 39779 (23 marzo 1998) sec. govrulesinterp33-7516.htm. Esteri broker-dealer che limitano le loro attività a quelle consentite ai sensi della regola 15a-6 della legge, tuttavia, possono essere esenti da Stati Uniti registrazione broker-dealer. Esteri broker-dealer che desiderano avvalersi di tale esenzione dovrebbero rivedere Securities Exchange Act stampa n ° 27017 (efficacia 15 Agosto, 1989), 54 FR 30013, per determinare se soddisfano le condizioni della regola 15a-6. Vedi anche le lettere Re: Titoli Attività di Stati Uniti-Affiliato Esteri Dealers (9 aprile e 28 aprile 1997). Inoltre, nel mese di aprile 2005, la divisione del Regolamento Mercati personale ha emesso le risposte alle domande più frequenti riguardanti Rule 15a-6 in relazione al regolamento AC. Vedi sec. govdivisionsmarketregmregacfaq0803.htmpartb. (Regolamento AC è discusso nella Parte V. B, sotto.) E. requisiti relativi mediatori e commercianti dei titoli governativi e comunali, tra cui i pronti contro termine broker-dealer che limitano la loro attività ai titoli di stato o municipali richiedono specializzato registrazione. Coloro che limitano la loro attività di titoli di Stato non devono registrarsi come quotgeneral-purposequot broker-dealer ai sensi della Sezione 15 (b) della legge. Impiego generale broker-dealer che conducono un business titoli di Stato, però, deve notare che questa attività sul loro Modulo BD. (Modulo di BD è discusso qui di seguito.) Tutte le imprese che sono broker o dealer in titoli di Stato devono essere conformi alle norme adottate dal Segretario del Tesoro, nonché le norme SEC. Le imprese che limitano la loro attività in titoli di acquisto e di vendita di titoli municipali per proprio conto (commercianti di valori mobiliari comunali) devono registrarsi come general-purpose broker-dealer. Se, tuttavia, queste entità sono banche o soddisfano i requisiti dell'esenzione intrastate discusso nella parte II. D.2. sopra, devono registrarsi come commercianti di valori mobiliari comunali. broker titoli municipali (diversi dalle banche) devono registrarsi come general-purpose broker-dealer a meno che non si qualificano per l'eccezione intrastate. Vedere Parte II. D.2 sopra. Le imprese che gestiscono un libro abbinato di pronti contro termine o altri azionari prestiti sono considerati commercianti. Perché un dealerquot quotbook esecuzione si presenta come disposto a comprare e vendere titoli, ed è quindi impegnata in attività di acquisto e vendita di titoli, deve essere registrato come un broker-dealer. F. regole speciali che si applicano alle banche e degli istituti finanziari Nota: Banche, CASSE, e altri istituti finanziari devono essere consapevoli che la Commissione ha adottato norme che possono riguardarli. Vedi regolamento R, Securities Exchange Act stampa n ° 34-56501 (24 settembre 2007), 72 FR 56514 (3 Ottobre 2007), sec. govrulesfinal200734-56501.pdf e Securities Exchange Act stampa n 34-56.502 ( 24 settembre 2007) 72 FR 56562 (3 ottobre 2007), sec. govrulesfinal200734-56502.pdf. Banche. Prima della promulgazione della quotGramm-Leach-Bliley Actquot (quotGLBAquot) nel 1999, le banche degli Stati Uniti sono stati esclusi dalle definizioni di quotbrokerquot e quotdealerquot ai sensi della legge. Il GLBA modificato Act, e le banche ora hanno alcune eccezioni mirate ed esenzioni dalla registrazione broker-dealer. Attualmente, a seguito di regolamentazione della Commissione, le banche stanno attraversando un periodo di transizione in per la conformità con la nuova legge. Dal 1 ° ottobre del 2003, le banche che comprano e vendono titoli devono considerare se sono quotdealersquot in base alle leggi federali sui titoli. La Divisione di Trading e Mercati ha rilasciato una guida speciale di conformità per le banche, dal titolo quotStaff Guida Compliance per banche su Dealer eccezioni previste dalla legge e regole, quot, che è disponibile sul sito web SEC39s a: sec. govdivisionsmarketregbankdealerguide. htm. Banca attività di intermediazione è rivolta nel regolamento R, adottato congiuntamente dalla Commissione e il Consiglio dei governatori della Federal Reserve System. Vedere Exchange Act stampa n ° 56501 (24 settembre 2007) (che si trova a sec. govrulesfinal200734-56501.pdf). Le eccezioni bancari e le esenzioni si applicano solo alle banche, e non alle entità collegate. E 'importante notare che le eccezioni applicabili alle banche ai sensi della legge Exchange, come modificato dal GLBA, non sono applicabili ad altre entità, incluse le società controllate bancarie e affiliate, che non sono essi stessi delle banche. Come tale, sussidiarie e affiliate delle banche che svolgono attività di broker-dealer sono tenuti a registrarsi come broker-dealer ai sensi della legge. Inoltre, le banche che agiscono come commercianti di valori mobiliari comunali o come mediatori dei titoli di Stato o concessionari continuano ad essere richiesti per la registrazione ai sensi della legge. Thrifts. Per statuto, thrifts (associazioni di risparmio) hanno lo stesso status di banche, e possono avvalersi delle stesse eccezioni mirate ed esenzioni dalla registrazione broker-dealer come le banche. (Per ulteriori informazioni, consultare la Guida quotStaff conformità alle banche sul Dealer eccezioni previste dalla legge e regole, quot notato sopra). Come con le banche, è importante notare che le eccezioni ed esenzioni applicabili ai thrifts non sono applicabili ad altre entità, incluse le società controllate e gli affiliati che non sono thrifts. Come tale, consociate e affiliate di thrifts che svolgono attività di broker-dealer sono tenuti a registrarsi come broker-dealer ai sensi della legge. Cooperative di credito e le modalità finanziarie Institution quotNetworkingquot. Le eccezioni e le esenzioni applicabili alle banche ai sensi dell'Exchange Act non si applicano ad altri tipi di istituzioni finanziarie, come le cooperative di credito. Il personale SEC, tuttavia, ha permesso alcune istituzioni finanziarie, come le cooperative di credito, di rendere i titoli a disposizione dei propri clienti senza registrarti come broker-dealer. Questo viene fatto attraverso accordi quotnetworkingquot, in cui un affiliato o di terze parti broker-dealer fornisce servizi di intermediazione per i clienti institution39s finanziarie, in base alle condizioni di cui alle lettere non-azione e regola NASD 2350. In un contratto di rete, le istituzioni finanziarie possono condividere in le commissioni generate dai loro clienti di cui, in determinate condizioni. L'istituto finanziario impegnarsi in tale rete deve essere in stretta conformità con le leggi vigenti e la guida del personale della Commissione. See. per esempio, la lettera re: Chubb Securities Corporation (24 novembre 1993) e NASD 2350 (applicabile ai broker-dealer che entrano in accordi di rete con le banche, CASSE, e cooperative di credito). personale G. Insurance Agency Networking La SEC ha permesso agenzie di assicurazione per rendere i prodotti assicurativi che sono anche i titoli (come ad esempio le rendite variabili) a disposizione dei propri clienti senza registrarti come broker-dealer a determinate condizioni. Anche questo viene fatto attraverso accordi quotnetworkingquot, in cui un affiliato o di terze parti broker-dealer fornisce servizi di intermediazione per i clienti agency39s di assicurazione, in base alle condizioni di cui alle lettere non-azione. Questi accordi sono stati progettati per affrontare le difficoltà del doppio Stato e le leggi federali applicabili alla vendita di questi prodotti. Attraverso accordi di rete, agenzie di assicurazione possono condividere nelle commissioni generate dai loro clienti di cui in determinate condizioni. Agenzie di assicurazione impegnati in tale rete devono essere in stretta conformità con le leggi vigenti e la guida del personale della Commissione. Le compagnie di assicurazione dovrebbero consultare le lettera Re: Prima d'America Brokerage Services, Inc. (28 settembre 1995). Coloro che sono interessati nella strutturazione di un tale accordo dovrebbe contattare il consiglio privato o il personale SEC per ulteriori informazioni. In particolare, le modalità di networking assicurazione sono limitati a prodotti assicurativi che sono anche i titoli. Essi non comprendono le vendite dei fondi comuni e altri titoli che non presentano le stesse difficoltà normative. Vedi lettera Re: Lincoln Financial Advisors Corp. (20 febbraio 1998). H. Real Estate Securities e patrimonio immobiliare BrokersAgents L'offerta di immobili in quanto tale, senza contratti di garanzia con il venditore o altri, non comporta l'offerta di un titolo. Quando il bene immobile è offerto in combinazione con determinati servizi, tuttavia, può costituire un contratto di investimento, e quindi, una cauzione. Vedere in generale. Securities Act Release No. 5347 (Jan. 4, 1973) (providing guidelines as to the applicability of the federal securities laws to offers and sales of condominiums or units in a real estate development). There is no general exception from the broker-dealer registration requirements for licensed real estate brokers or agents who engage in the business of effecting transactions in real estate securities. In the past, the Division staff has granted no-action relief from the registration requirements to licensed real estate personnel that engage in limited activities with respect to the sale of condominium units coupled with an offer or agreement to perform or arrange certain rental or other services for the purchaser. The relief provided in these letters is limited solely to their facts and should not be relied upon for activities relating to sales of other types of real estate securities, including tenants-in-common interests in real property. See generally . NASD Notice to Members 05-18, finra. orgsitesdefaultfilesNoticeDocumentp013455.pdf (addressing tenants-in-common interests in real property). I. Broker-Dealer Relationships with Affinity Groups Broker-dealers may enter into arrangements to offer services to members of certain non-profit groups, including civic organizations, charities, and educational institutions that rely upon private donations. These arrangements are subject to certain conditions to ensure that the organizations, or quotaffinity groups, quot do not develop a salesman39s stake with respect to the sale of securities. See . for example, letter re: Attkisson, Carter amp Akers (June 23, 1998). III. HOW TO REGISTER AS A BROKER-DEALER A broker-dealer may not begin business until: it has properly filed Form BD, and the SEC has granted its registration it has become a member of an SRO it has become a member of SIPC, the Securities Investor Protection Corporation it complies with all applicable state requirements and its quotassociated personsquot have satisfied applicable qualification requirements. A. Form BD If a broker-dealer does not qualify for any of the exceptions or exemptions outlined in the sections above, it must register with the Commission under Section 15(b) of the Act. Broker-dealers register by filing an application on Form BD, which you may obtain from the SEC39s webpage at sec. govaboutformsformbd. pdf or through the SEC39s Publications Office at (202) 551-4040. You also use Form BD to: apply for membership in an SRO, such as FINRA or a registered national securities exchange give notice that you conduct government securities activities or apply for broker-dealer registration with each state in which you plan to do business. Form BD asks questions about the background of the broker-dealer and its principals, controlling persons, and employees. The broker-dealer must meet the statutory requirements to engage in a business that involves high professional standards, and quite often includes the more rigorous responsibilities of a fiduciary. To apply for registration, you must file one executed copy of Form BD through the Central Registration Depository (quotCRDquot), which is operated by FINRA. (The only exception is for banks registering as municipal securities dealers, which file Form MSD directly with the SEC and with their appropriate banking regulator.) Form BD contains additional filing instructions. The SEC does not charge a filing fee, but the SROs and the states may. Applicants that reside outside the U. S. must also appoint the SEC as agent for service of process using a standard form. Incomplete applications are not considered quotfiledquot and will be returned to the applicant for completion and re-submission. Within 45 days of filing a completed application, the SEC will either grant registration or begin proceedings to determine whether it should deny registration. An SEC registration may be granted with the condition that SRO membership must be obtained. The SROs have independent membership application procedures and are not required to act within 45 days of the filing of a completed application. In addition, state registrations may be required. A broker-dealer must comply with relevant state law as well as federal law and applicable SRO rules. Timeframes for registration with individual states may differ from the federal and SRO timeframes. As such, when deciding to register as a broker-dealer, it is important to plan for the time required for processing Federal, state, and SRO registration or membership applications. Duty to update Form BD. A registered broker-dealer must keep its Form BD current. Thus, it must promptly update its Form BD by filing amendments whenever the information on file becomes inaccurate or incomplete for any reason. Prohibited Broker-Dealer Names. Title 18, Section 709 of the United States Code makes it a criminal offense to use the words quotNational, quot quotFederal, quot quotUnited States, quot quotReserve, quot or quotDeposit Insurancequot in the name of a person or organization in the brokerage business, unless otherwise allowed by federal law. Further, a broker-dealer name that is otherwise materially misleading would become subject to scrutiny under Exchange Act Section 10(b), and Rule 10b-5 thereunder, the general antifraud rules, and any other applicable provisions. B. SRO Membership (Section 15(b)(8) and Rule 15b9-1) Before it begins doing business, a broker-dealer must become a member of an SRO. SROs assist the SEC in regulating the activities of broker-dealers. FINRA and the national securities exchanges are all SROs. If a broker-dealer restricts its transactions to the national securities exchanges of which it is a member and meets certain other conditions, it may be required only to be a member of those exchanges. If a broker-dealer effects securities transactions other than on a national securities exchange of which it is a member, however, including any over-the-counter business, it must become a member of FINRA, unless it qualifies for the exemption in Rule 15b9-1. FINRA39s webpage at finra. org provides detailed information on the FINRA membership process. You may also wish to consult the web pages of the individual exchanges for additional information. Firms that engage in transactions in municipal securities must also comply with the rules of the Municipal Securities Rulemaking Board, or MSRB. The MSRB is an SRO that makes rules governing transactions in municipal securities, but, unlike other SROs, it does not enforce compliance with its rules. Compliance with MSRB rules is monitored and enforced by FINRA and the SEC (in the case of broker-dealers), and the Federal bank regulators and the SEC (in the case of banks). You may wish to consult the MSRB39s website at msrb. org for additional information, or you can call the MSRB at (703) 797-6600. C. SIPC Membership Every registered broker-dealer must be a member of the Securities Investor Protection Corporation, or SIPC, unless its principal business is conducted outside of the United States or consists exclusively of the sale or distribution of investment company shares, variable annuities, or insurance. Each SIPC member must pay an annual fee to SIPC. SIPC insures that its members39 customers receive back their cash and securities in the event of a member39s liquidation, up to 500,000 per customer for cash and securities. (Claims for cash are limited to 100,000.) For further information, contact SIPC, 805 15th St. NW, Suite 800, Washington, DC 20005. Telephone: (202) 371-8300, fax: (202) 371-6728, or visit SIPC39s website at sipc. org . D. State Requirements Every state has its own requirements for a person conducting business as a broker-dealer within that state. Each state39s securities regulator can provide you with information about that state39s requirements. You can obtain contact information for these regulators from the North American Securities Administrators Association, Inc. (NASAA), 750 First Street, NE, Suite 1140, Washington, DC 20002. Telephone: (202) 737-0900, or visit NASAA39s website at nasaa. org . E. Associated Persons (Section 3(a)(18) Rule 15b7-1) The Act defines an quotassociated personquot of a broker-dealer as any partner, officer, director, branch manager, or employee of the broker-dealer, any person performing similar functions, or any person controlling, controlled by, or under common control with, the broker-dealer. A broker-dealer must file a Form U-4 with the applicable SRO for each associated person who will effect transactions in securities when that person is hired or otherwise becomes associated. Form U-4 is used to register individuals and to record these individuals39 prior employment and disciplinary history. An associated person who effects or is involved in effecting securities transactions also must meet qualification requirements. These include passing an SRO securities qualification examination. Many individuals take the comprehensive quotSeries 7quot exam. If individuals engage only in activities involving sales of particular types of securities, such as municipal securities, direct participation programs (limited partnerships) or mutual funds, they may wish to take a specialized examination focused on that type of security, instead of the general securities examination. There is also a special exam for assistant representatives, whose activities are limited to accepting unsolicited customer orders for execution by the firm. Supervisory personnel, and those who engage in specialized activities such as options trading, must take additional exams that cover those areas. These examinations require the Series 7 exam as a prerequisite. You can obtain copies of Form U-4, as well as information on securities qualification examinations, from an SRO. FINRA39s website at finra. org contains detailed information and guidance for individuals who wish to obtain a series license through FINRA. Also note that individual states have their own licensing and registration requirements, so you should consult with the applicable state securities regulators for further information. Note: If you hold a series license, you must be properly associated with a registered broker-dealer to effect securities transactions. It is not sufficient merely to hold a series license when engaging in securities business. If you hold a series license and wish to start an independent securities business, or otherwise wish to effect securities transactions outside of an quotassociated personquot relationship, you would first need to register as a broker-dealer. F. Successor Broker-Dealer Registration (Rules 15b1-3, 15Ba2-4, and 15Ca2-3) A successor broker-dealer assumes substantially all of the assets and liabilities, and continues the business, of a registered predecessor broker-dealer. A successor broker-dealer must file a new Form BD (or, in special instances, amend the predecessor broker-dealer39s Form BD) within 30 days after such succession. The filing should indicate that the applicant is a successor. See Securities Exchange Act Release No. 31661 (December 28, 1992), 58 FR 7, which is available on the SEC39s website at: sec. govrulesinterp199234-31661.pdf. See also, the instructions to Form BD . G. Withdrawal from Registration (Rule 15b6-1) Cancellation of Registration When a registered broker-dealer stops doing business, it must file a Form BDW (sec. govaboutformsformbdw. pdf ) to withdraw its registration with the SEC and with the states and SROs of which it is a member. This form requires the broker-dealer to disclose the amount of any funds or securities it owes customers, and whether it is the subject of any proceedings, unsatisfied judgments, liens, or customer claims. These disclosures help to ensure that a broker-dealer39s business is concluded in an orderly manner and that customers39 funds and securities are protected. In most cases, a broker-dealer must also file a final FOCUS report. Form BDW may also be used by a broker-dealer to withdraw from membership with particular SROs, or to withdraw from registration with particular states, without withdrawing all of its registrations and memberships. Form BDW is not considered quotfiledquot unless it is deemed complete by the SEC and the SRO that reviews the filing. The SEC may also cancel a broker-dealer39s registration if it finds that the firm is no longer in existence or has ceased doing business as a broker-dealer. IV. SECURITY FUTURES Security futures, which are contracts of sale for future delivery of a single security or a narrow-based security index, are regulated as both securities by the SEC and as futures by the Commodity Futures Trading Commission (quotCFTCquot). As a result, firms that conduct business in security futures must be registered with both the SEC and the CFTC. Federal law permits firms already registered with either the SEC or the CFTC to register with the other agency, for the limited purpose of trading security futures, by filing a notice. Specifically, firms registered as general purpose broker-dealers under Section 15(b) of the Act may quotnoticequot register with the CFTC. Likewise, futures commission merchants and introducing brokers registered with the CFTC may notice register with the SEC. (Section 15(b)(12) of the Act provides a limited exception to this notice registration requirement for certain natural persons who are members of security futures exchanges). However, futures commission merchants or introducing brokers that conduct a business in securities other than security futures must be registered as general-purpose broker-dealers. For more information on this topic, See Exchange Act Release No. 44730 (effective August 27, 2001), 66 FR 45138, and 66 FR 43080 (effective September 17, 2001). V. CONDUCT REGULATION OF BROKER-DEALERS Broker-dealers, like other securities market participants, must comply with the general quotantifraudquot provisions of the federal securities laws. Broker-dealers must also comply with many requirements that are designed to maintain high industry standards. We discuss some of these provisions below. A. Antifraud Provisions (Sections 9(a), 10(b), and 15(c)(1) and (2)) The quotantifraudquot provisions prohibit misstatements or misleading omissions of material facts, and fraudulent or manipulative acts and practices, in connection with the purchase or sale of securities. 3 While these provisions are very broad, the Commission has adopted rules, issued interpretations, and brought enforcement actions that define some of the activities we consider manipulative, deceptive, fraudulent, or otherwise unlawful. 4 Broker-dealers must conduct their activities so as to avoid these kinds of practices. 1. Duty of Fair Dealing Broker-dealers owe their customers a duty of fair dealing. This fundamental duty derives from the Act39s antifraud provisions mentioned above. Under the so-called quotshinglequot theory, by virtue of engaging in the brokerage profession ( e. g. . hanging out the broker-dealer39s business sign, or quotshinglequot), a broker-dealer represents to its customers that it will deal fairly with them, consistent with the standards of the profession. Based on this important representation, the SEC, through interpretive statements and enforcement actions, and the courts, through case law, have set forth over time certain duties for broker-dealers. These include the duties to execute orders promptly, disclose certain material information ( i. e. . information the customer would consider important as an investor), charge prices reasonably related to the prevailing market, and fully disclose any conflict of interest. SRO rules also reflect the importance of fair dealing. For example, FINRA members must comply with NASD39s Rules of Fair Practice. These rules generally require broker-dealers to observe high standards of commercial honor and just and equitable principles of trade in conducting their business. The exchanges and the MSRB have similar rules. 2. Suitability Requirements Broker-dealers generally have an obligation to recommend only those specific investments or overall investment strategies that are suitable for their customers. The concept of suitability appears in specific SRO rules such as NASD Rule 2310 and has been interpreted as an obligation under the antifraud provisions of the federal securities laws. Under suitability requirements, a broker-dealer must have an quotadequate and reasonable basisquot for any recommendation that it makes. Reasonable basis suitability, or the reasonable basis test, relates to the particular security or strategy recommended. Therefore, the broker-dealer has an obligation to investigate and obtain adequate information about the security it is recommending. A broker-dealer also has an obligation to determine customer-specific suitability. In particular, a broker-dealer must make recommendations based on a customer39s financial situation, needs, and other security holdings. This requirement has been construed to impose a duty of inquiry on broker-dealers to obtain relevant information from customers relating to their financial situations and to keep such information current. SROs consider recommendations to be unsuitable when they are inconsistent with the customer39s investment objectives. 3. Duty of Best Execution The duty of best execution, which also stems from the Act39s antifraud provisions, requires a broker-dealer to seek to obtain the most favorable terms available under the circumstances for its customer orders. This applies whether the broker-dealer is acting as agent or as principal. The SRO rules also include a duty of best execution. For example, FINRA members must use quotreasonable diligencequot to determine the best market for a security and buy or sell the security in that market, so that the price to the customer is as favorable as possible under prevailing market conditions. 4. Customer Confirmation Rule (Rule 10b-10 and MSRB rule G-15) A broker-dealer must provide its customers, at or before the completion of a transaction, with certain information, including: the date, time, identity, price, and number of shares involved its capacity (agent or principal) and its compensation (for agency trades, compensation includes its commission and whether it receives payment for order flow 5 and for principal trades, mark-up disclosure may be required) the source and amount of any third party remuneration it has received or will receive 6 other information, both general (such as, if the broker-dealer is not a SIPC member) and transaction-specific (such as the yield, in most transactions involving debt securities). A broker-dealer may also be obligated under the antifraud provisions of the Act to disclose additional information to the customer at the time of his or her investment decision. 5. Disclosure of Credit Terms (Rule 10b-16) Broker-dealers must notify customers purchasing securities on credit about the credit terms and the status of their accounts. A broker-dealer must establish procedures for disclosing this information before it extends credit to a customer for the purchase of securities. A broker-dealer must give the customer this information at the time the account is opened, and must also provide credit customers with account statements at least quarterly. 6. Restrictions on Short Sales (Regulation SHO) A quotshort salequot is generally a sale of a security that the seller doesn39t own or for which the seller delivers borrowed shares. Regulation SHO was adopted in 2004 to update short sale regulation in light of numerous market developments since short sale regulation was first adopted in 1938. Compliance with Regulation SHO began on January 3, 2005. Some of the goals of Regulation SHO include: Establishing uniform quotlocatequot and quotclose-outquot requirements in order to address problems associated with failures to deliver, including potentially abusive quotnakedquot short selling. Locate Requirement: Regulation SHO requires a broker-dealer to have reasonable grounds to believe that the security can be borrowed so that it can be delivered on the date delivery is due before effecting a short sale order in any equity security. This quotlocatequot must be made and documented prior to effecting the short sale. Market makers engaged in bona fide market making are exempted from the quotlocatequot requirement. quotClose-outquot Requirement: Regulation SHO imposes additional delivery requirements on broker-dealers for securities in which there are a relatively substantial number of extended delivery failures at a registered clearing agency (quotthreshold securitiesquot). For instance, with limited exception, Regulation SHO requires brokers and dealers that are participants of a registered clearing agency to take action to quotclose-outquot failure-to-deliver positions (quotopen failsquot) in threshold securities that have persisted for 13 consecutive settlement days. Closing out requires the broker or dealer to purchase securities of like kind and quantity. Until the position is closed out, the broker or dealer and any broker or dealer for which it clears transactions (for example, an introducing broker) may not effect further short sales in that threshold security without borrowing or entering into a bona fide agreement to borrow the security (known as the quotpre-borrowingquot requirement). Creating uniform order marking requirements for sales of all equity securities. This means that a broker-dealer must mark orders as quotlongquot or quotshort. quot For further information, please see the adopting release for Regulation SHO, as well as Frequently Asked Questions, Key Points, and other related materials at sec. govspotlightshortsales. htm . 7. Trading During an Offering (Regulation M) Regulation M is designed to protect the integrity of the securities trading market as an independent pricing mechanism by governing the activities of underwriters, issuers, selling security holders, and other participants in connection with a securities offering. These rules are aimed at preventing persons having an interest in an offering from influencing the market price for the offered security in order to facilitate a distribution. The adopting release for Regulation M is available at sec. govrulesfinal34-38067.txt . Rule 101 of Regulation M generally prohibits underwriters, broker-dealers and other distribution participants from bidding for, purchasing, or attempting to induce any person to bid for or purchase, any security which is the subject of a distribution until the applicable restricted period has ended. An offering39s quotrestricted periodquot begins either one or five business days (depending on the trading volume value of the offered security and the public float value of the issuer) before the day of the offering39s pricing and ends upon completion of the distribution. Rule 101 contains various exceptions that are designed to permit an orderly distribution of securities and limit disruption in the market for the securities being distributed. For example, underwriters can continue to trade in actively-traded securities of larger issuers (securities with an average daily trading volume, or ADTV, value of 1 million or more and whose issuers have a public float value of at least 150 million). In addition, the following activities, among others, may be excepted from Rule 101, if they meet specified conditions: disseminating research reports making unsolicited purchases purchasing a group, or quotbasketquot of 20 or more securities exercising options, warrants, rights, and convertible securities effecting transactions that total less than 2 of the security39s ADTV and effecting transactions in securities sold to quotqualified institutional buyers. quot Rule 102 of Regulation M prohibits issuers, selling security holders, and their affiliated purchasers from bidding for, purchasing, or attempting to induce any person to bid for or purchase, any security which is the subject of a distribution until after the applicable restricted period. Rule 103 of Regulation M governs passive market making by broker-dealers participating in an offering of a Nasdaq security. Rule 104 of Regulation M governs stabilization transactions, syndicate short covering activity, and penalty bids. Rule 105 of Regulation M prevents manipulative short sales prior to pricing an offering by prohibiting the purchase of offering securities if a person sold short the security that is the subject of the offering during the Rule 105 restricted period. The rule contains exceptions for bona fide purchases, separate accounts, and investment companies. For frequently asked questions about Regulation M, see Staff Legal Bulletin No. 9 at sec. govinterpslegalmrslb9.htm . 8. Restrictions on Insider Trading The SEC and the courts interpret Section 10(b) and Rule 10b-5 under the Act to bar the use by any person of material non-public information in the purchase or sale of securities, whenever that use violates a duty of trust and confidence owed to a third party. Section 15(f) of the Act specifically requires broker-dealers to have and enforce written policies and procedures reasonably designed to prevent their employees from misusing material non-public information. Because employees in the investment banking operations of broker-dealers frequently have access to material non-public information, firms need to create procedures designed to limit the flow of this information so that their employees cannot use the information in the trading of securities. Broker-dealers can use these information barriers as a defense to a claim of insider trading. Such procedures typically include: training to make employees aware of these restrictions employee trading restrictions physical barriers isolation of certain departments and limitations on investment bank proprietary trading. 7 9. Restrictions on Private Securities Transactions NASD Rule 3040 provides that quotno person associated with a member shall participate in any manner in a private securities transactionquot except in accordance with the provisions of the rule. To the extent that any such transactions are permitted under the rule, prior to participating in any private securities transaction, the associated person must provide written notice to the member firm as described in the rule. If compensation is involved, the member firm must approve or disapprove the proposed transaction, record it in its books and records, and supervise the transaction as if it were executed on behalf of the member firm. Other conditions may also apply. In addition, private securities transactions of an associated person may be subject to an analysis under Exchange Act Section 10(b) and Rule 10b-5, as well as the broker-dealer supervisory provisions of Section 15(f) (described in Part V. A.8, above) and Section 15(b)(4)(E), and other relevant statutory or regulatory provisions. B. Analysts and Regulation AC Regulation AC (or Regulation Analyst Certification) requires brokers, dealers, and persons associated with brokers or dealers that publish, distribute, or circulate research reports to include in those reports a certification that the views expressed in the report accurately reflect the analyst39s personal views. The report must also disclose whether the analyst received compensation for the views expressed in the report. If the analyst has received related compensation, the broker, dealer, or associated person must disclose its amount, source, and purpose. Regulation AC applies to all brokers and dealers, as well as to those persons associated with a broker or dealer that fall within the definition of quotcovered person. quot Regulation AC also requires that broker-dealers keep records of analyst certifications relating to public appearances. In addition to Commission rules, analyst conduct is governed by SRO rules, such as NASD Rule 2711 and NYSE Rule 472. The SRO rules impose restrictions on analyst compensation, personal trading activities, and involvement in investment banking activities. The SRO rules also include disclosure requirements for research reports and public appearances. For further information, including investor guidance, SEC releases, and SRO rules, see sec. govdivisionsmarketregsecuritiesanalysts. htm. In addition, staff responses to frequently asked questions are available at sec. govdivisionsmarketregmregacfaq0803.htm . C. Trading by Members of Exchanges, Brokers and Dealers (Section 11(a)) Broker-dealers that are members of national securities exchanges are subject to additional regulations regarding transactions they effect on exchanges. For example, except under certain conditions, they generally cannot effect transactions on exchanges for their own accounts, the accounts of their associated persons, or accounts that they or their associated persons manage. Exceptions from this general rule include transactions by market makers, transactions routed through other members, and transactions that yield to other orders. Exchange members may wish to seek guidance from their exchange regarding these provisions. D. Extending Credit on New Issues Disclosure of Capacity as Broker or Dealer (Section 11(d)) Section 11(d)(1) of the Act generally prohibits a broker-dealer that participates in the distribution of a new issue of securities from extending credit to customers in connection with the new issue during the distribution period and for 30 days thereafter. Sales by a broker-dealer of mutual fund shares and variable insurance product units are deemed to constitute participation in the distribution of a new issue. Therefore, purchase of mutual fund shares or variable product units using credit extended or arranged by the broker-dealer during the distribution period is a violation of Section 11(d)(1). However, Exchange Act Rule 11d1-2 permits a broker-dealer to extend credit to a customer on newly sold mutual fund shares and variable insurance product units after the customer has owned the shares or units for 30 days. Section 11(d)(2) of the Act requires a broker-dealer to disclose in writing, at or before the completion of each transaction with a customer, whether the broker-dealer is acting in the capacity of broker or dealer with regard to the transaction. E. Regulation NMS Regulation NMS addresses four interrelated topics that are designed to modernize the regulatory structure of the U. S. equity markets: (1) order protection, (2) intermarket access, (3) sub-penny pricing, and (4) market data. The quotOrder Protection Rulequot requires trading centers to establish, maintain, and enforce written policies and procedures reasonably designed to prevent the execution of trades at prices inferior to protected quotations displayed by other trading centers, subject to an applicable exception. To be protected, a quotation must be immediately and automatically accessible. The quotAccess Rulequot requires fair and non-discriminatory access to quotations, establishes a limit on access fees to harmonize the pricing of quotations across different trading centers, and requires each national securities exchange and national securities association to adopt, maintain, and enforce written rules that prohibit their members from engaging in a pattern or practice of displaying quotations that lock or cross automated quotations. The quotSub-Penny Rulequot prohibits market participants from accepting, ranking, or displaying orders, quotations, or indications of interest in a pricing increment smaller than a penny, except for orders, quotations, or indications of interest that are priced at less than 1.00 per share. The quotMarket Data Rulesquot update the requirements for consolidating, distributing, and displaying market information. In addition, amendments to the joint industry plans for disseminating market information modify the formulas for allocating plan revenues among the self-regulatory organizations and broaden participation in plan governance. Regulation NMS also updates and streamlines the existing Exchange Act rules governing the national market system previously adopted under Section 11A of the Exchange Act, and consolidates them into a single regulation. F. Order Execution Obligations (Rules 602-604 of Regulation NMS) Broker-dealers that are exchange specialists or Nasdaq market makers must comply with particular rules regarding publishing quotes and handling customer orders. These two types of broker-dealers have special functions in the securities markets, particularly because they trade for their own accounts while also handling orders for customers. These rules, which include the quotQuote Rulequot and the quotLimit Order Display Rule, quot increase the information that is publicly available concerning the prices at which investors may buy and sell exchange-listed and Nasdaq National Market System securities. The Quote Rule requires specialists and market makers to provide quotation information to their self-regulatory organization for dissemination to the public. The quote information that the specialist or market maker provides must reflect the best prices at which he is willing to trade (the lowest price the dealer will accept from a customer to sell the securities and the highest price the dealer will pay a customer to purchase the securities). A specialist or market maker may still trade at better prices in certain private trading systems, called electronic communications networks, or quotECNs, quot without publishing an improved quote. This is true only when the ECN itself publishes the improved prices and makes those prices available to the investing public. Thus, the Quote Rule ensures that the public has access to the best prices at which specialists and market makers are willing to trade even if those prices are in private trading systems. Limit orders are orders to buy or sell securities at a specified price. The Limit Order Display Rule requires that specialists and market makers publicly display certain limit orders they receive from customers. If the limit order is for a price that is better than the specialist39s or market maker39s quote, the specialist or market maker must publicly display it. The rule benefits investors because the publication of trading interest at prices that improve specialists39 and market makers39 quotes present investors with improved pricing opportunities. G. Regulation ATS: Broker-Dealer Trading Systems Regulation ATS (17 CFR 242.300 et seq.) provides a means for broker-dealers to operate automated trading platforms, to collect and execute orders in securities electronically, without registering as a national securities exchange under Section 6 of the Exchange Act or as an exempt exchange pursuant to Section 5 of the Act. For purposes of the regulation, an alternative trading system or ATS is any organization, association, person, group of persons, or system that constitutes, maintains, or provides a marketplace or facilities for bringing together purchasers and sellers of securities or for otherwise performing with respect to securities the functions commonly performed by a stock exchange as defined in Rule 3b-16 under the Exchange Act. See 17 CFR 242.300. Further, for purposes of the regulation, an ATS may not set rules governing the conduct of subscribers (other than with respect to the use of the particular trading system), or discipline subscribers other than by exclusion from trading. To the extent that an ATS or the sponsoring broker-dealer seeks to establish conduct or disciplinary rules, the entity may be required to register as a national securities exchange or obtain a Commission exemption from exchange registration based on limited trading volume. In order to acquire the status of an ATS, a firm must first be registered as a broker-dealer, and it must file an initial operation report with respect to the trading system on Form ATS at least 20 days before commencing operation. The initial operation report must be accurate and kept current. The Commission does not issue approval orders for Form ATS filings however, the Form ATS is not considered filed unless it complies with all applicable requirements under the Regulation. Regulation ATS contains provisions concerning the system39s operations, including: fair access to the trading system fees charged the display of orders and the ability to execute orders system capacity, integrity and security record keeping and reporting and procedures to ensure the confidential treatment of trading information. An ATS must file with the Division of Trading and Markets quarterly reports regarding its operations on Form ATS-R. An ATS must also comply with any applicable SRO rules and with state laws relating to alternative trading systems and relating to the offer or sale of securities or the registration or regulation of persons or entities effecting securities transactions. Finally, an ATS may not use in its name the word quotexchange, quot or terms similar to the word quotexchange, quot such as the term quotstock market. quot See 17 CFR 242.301. For further information on the operation and regulation of alternative trading systems, see the adopting release for Regulation ATS at sec. govrulesfinal34-40760.txt . H. Penny Stock Rules (Rules 15g-2 through 15g-9, Schedule 15G) Most broker-dealers that effect transactions in quotpenny stocksquot have certain enhanced suitability and disclosure obligations to their customers. 8 A penny stock is generally defined as any equity security other than a security that: (a) is an NMS stock ( See Rule 600(b)(47)) listed on a quotgrandfatheredquot national securities exchange, (b) is an NMS stock listed on a national securities exchange or an automated quotation system sponsored by a registered national securities association (including Nasdaq) that satisfies certain minimum quantitative listing standards, (c) has a transaction price of five dollars or more, (d) is issued by a registered investment company or by the Options Clearing Corporation, (e) is a listed security futures product, or (f) is a security whose issuer has met certain net tangible assets or average revenues ( See Rule 3a51-1). Penny stocks include the equity securities of private companies with no active trading market if they do not qualify for one of the exclusions from the definition of penny stock. Before a broker-dealer that does not qualify for an exemption 9 may effect a solicited transaction in a penny stock for or with the account of a customer it must: (1) provide the customer with a risk disclosure document, as set forth in Schedule 15G, and receive a signed and dated acknowledgement of receipt of that document from the customer ( See Rule 15g-2) (2) approve the customer39s account for transactions in penny stocks, provide the customer with a suitability statement, and receive a signed a dated copy of that statement from the customer and (3) receive the customer39s written agreement to the transaction ( See Rule 15g-9). The broker-dealer also must wait at least two business days after sending the customer the risk disclosure document and the suitability statement before effecting the transaction. In addition, Exchange Act Rules 15g-3 through 15g-6 generally require a broker-dealer to give each penny stock customer: information on market quotations and, where appropriate, offer and bid prices the aggregate amount of any compensation received by the broker-dealer in connection with such transaction the aggregate amount of cash compensation that any associated person of the broker-dealer, who is a natural person and who has communicated with the customer concerning the transaction at or prior to the customerrsquos transaction order, other than a person whose function is solely clerical or ministerial, has received or will receive from any source in connection with the transaction and monthly account statements showing the market value of each penny stock held in the customerrsquos account. I. Privacy of Consumer Financial Information (Regulation S-P) Broker-dealers, including foreign broker-dealers registered with the Commission and unregistered broker-dealers in the United States, must comply with Regulation S-P, ( See 17 CFR Part 248) even if their consumers are non-U. S. persons or if they conduct their activities through non-U. S. offices or branches. Regulation SP generally requires a broker-dealer to provide its customers with initial, annual and revised notices containing specified information about the broker-dealer39s privacy policies and practices. These notices must be clear and conspicuous, and must accurately reflect the broker-dealer39s policies and practices. See 17 CFR 248.4, 248.5, 248.6 and 248.8. Before disclosing nonpublic personal information about a consumer to a nonaffiliated third party, a broker-dealer must first give a consumer an opt-out notice and a reasonable opportunity to opt out of the disclosure. See 17 CFR 248.7 and 248.10. There are exceptions from these notice and opt-out requirements for disclosures to other financial institutions under joint marketing agreements and to certain service providers. See 17 CFR 248.13. There also are exceptions for disclosures made for purposes such as maintaining or servicing accounts, and disclosures made with the consent or at the direction of a consumer, or for purposes such as protecting against fraud, reporting to consumer reporting agencies, and providing information to law enforcement agencies. See 17 CFR 248.14 and 248.15. Regulation SP also imposes limits on the re-disclosure and re-use of information, and on sharing account number information with nonaffiliated third parties for use in telemarketing, direct mail marketing and email marketing. See 17 CFR 248.11 and 248.12. In addition, it includes a safeguards rule that requires a broker-dealer to adopt written policies and procedures for administrative, technical, and physical safeguards to protect customer records and information. See 17 CFR 248.30(a). Further, it includes a disposal rule that requires a broker-dealer (other than a broker-dealer registered by notice with the Commission to engage solely in transactions in securities futures) that maintains or possesses consumer report information for a business purpose to take reasonable measures to protect against unauthorized access to or use of the information in connection with its disposal. See 17 CFR 248.30(b). Recently proposed amendments which would further strengthen the privacy protections under Regulation S-P are available at sec. govrulesproposed200834-57427.pdf . J. Investment Adviser Registration Broker-dealers offering certain types of accounts and services may also be subject to regulation under the Investment Advisers Act. 10 (An investment adviser is defined as a person who receives compensation for providing advice about securities as part of a regular business.) ( See Section 202(a)(11) of the Investment Advisers Act .) In general, a broker-dealer whose performance of advisory services is quotsolely incidentalquot to the conduct of its business as a broker-dealer and that receives no quotspecial compensationquot is excepted from the definition of investment adviser. Thus, for example, a broker-dealer that provides advice and offers fee-based accounts (i. e. accounts that charge an asset-based or fixed fee rather than a commission, mark-up, or mark-down) must treat those accounts as advisory because an asset-based fee is considered quotspecial compensation. quot Also, under a recently proposed rule, a broker-dealer would be required to treat (1) each account over which it exercises investment discretion as an advisory account, unless the investment discretion is granted by a customer on a temporary or limited basis and (2) an account as advisory if the broker-dealer charges a separate fee for, or separately contracts to provide, advisory services. ( See sec. govrulesproposed2007ia-2652.pdf .) Finally, under the same proposed rule, a broker-dealer that is registered under the Exchange Act and registered under the Investment Advisers Act would be an investment adviser solely with respect to those accounts for which it provides services that subject the broker-dealer to the Investment Advisers Act. VI. ARBITRATION Pursuant to the rules of self-regulatory organizations, broker-dealers are required to arbitrate disputes with their customers, if the customer chooses to arbitrate. See e. g. . NASD Code of Arbitration Procedure for Customer Disputes, Rule 12200 American Stock Exchange, Rule 600 and Chicago Board of Options Exchange, Rule 18.1. VII. FINANCIAL RESPONSIBILITY OF BROKER-DEALERS Broker-dealers must meet certain financial responsibility requirements, including: maintaining minimum amounts of liquid assets, or net capital taking certain steps to safeguard the customer funds and securities and making and preserving accurate books and records. A. Net Capital Rule (Rule 15c3-1) The purpose of this rule is to require a broker-dealer to have at all times enough liquid assets to promptly satisfy the claims of customers if the broker-dealer goes out of business. Under this rule, broker-dealers must maintain minimum net capital levels based upon the type of securities activities they conduct and based on certain financial ratios. For example, broker-dealers that clear and carry customer accounts generally must maintain net capital equal to the greater of 250,000 or two percent of aggregate debit items. Broker-dealers that do not clear and carry customer accounts can operate with lower levels of net capital. B. Use of Customer Balances (Rule 15c3-2) Broker-dealers that use customers39 free credit balances in their business must establish procedures to provide specified information to those customers, including: the amount due to those customers the fact that such funds are not segregated and may be used by the broker-dealer in its business and the fact that such funds are payable on demand of the customer. C. Customer Protection Rule (Rule 15c3-3) This rule protects customer funds and securities held by broker-dealers. Under the rule, a broker-dealer must have possession or control of all fully-paid or excess margin securities held for the account of customers, and determine daily that it is in compliance with this requirement. The broker-dealer must also make periodic computations to determine how much money it is holding that is either customer money or obtained from the use of customer securities. If this amount exceeds the amount that it is owed by customers or by other broker-dealers relating to customer transactions, the broker-dealer must deposit the excess into a special reserve bank account for the exclusive benefit of customers. This rule thus prevents a broker-dealer from using customer funds to finance its business. D. Required Books, Records, and Reports (Rules 17a-3, 17a-4, 17a-5, 17a-11) 11 Broker-dealers must make and keep current books and records detailing, among other things, securities transactions, money balances, and securities positions. They also must keep records for required periods and furnish copies of those records to the SEC on request. These records include e-mail. Broker-dealers also must file with the SEC periodic reports, including quarterly and annual financial statements. The annual statements generally must be certified by an independent public accountant. In addition, broker-dealers must notify the SEC and the appropriate SRO 12 regarding net capital, recordkeeping, and other operational problems, and in some cases file reports regarding those problems, within certain time periods. This gives us and the SROs early warning of these problems. E. Risk Assessment Requirements (Rules 17h-1T and 17h-2T) Certain broker-dealers must maintain and preserve certain information regarding those affiliates, subsidiaries and holding companies whose business activities are reasonably likely to have a material impact on their own financial and operating condition (including the broker-dealer39s net capital, liquidity, or ability to conduct or finance operations). Broker-dealers must also file a quarterly summary of this information. This information is designed to permit the SEC to assess the impact these entities may have on the broker-dealer. VIII. OTHER REQUIREMENTS In addition to the provisions discussed above, broker-dealers must comply with other requirements. These include: submitting to Commission and SRO examinations participating in the lost and stolen securities program complying with the fingerprinting requirement maintaining and reporting information regarding their affiliates following certain guidelines when using electronic media to deliver information and maintaining an anti-money laundering program. A. Examinations and Inspections (Rules 15b2-2 and 17d-1) Broker-dealers are subject to examination by the SEC and the SROs. The appropriate SRO generally inspects newly-registered broker-dealers for compliance with applicable financial responsibility rules within six months of registration, and for compliance with all other regulatory requirements within twelve months of registration. A broker-dealer must permit the SEC to inspect its books and records at any reasonable time. B. Lost and Stolen Securities Program (Rule 17f-1) In general, all broker-dealers must register in the lost and stolen securities program. The limited exceptions include broker-dealers that effect securities transactions exclusively on the floor of a national securities exchange solely for other exchange members and do not receive or hold customer securities, and broker-dealers whose business does not involve handling securities certificates. Broker-dealers must report losses, thefts, and instances of counterfeiting of securities certificates on Form X-17F-1A, and, in some cases, broker-dealers must make inquiries regarding securities certificates coming into their possession. Broker-dealers must file these reports and inquiries with the Securities Information Center (SIC), which operates the program for the SEC. A registration form can be obtained from Securities Information Center, P. O. Box 55151, Boston, MA 02205-5151. For registration and additional information, see the SIC39s website at secic . C. Fingerprinting Requirement (Rule 17f-2) Generally, every partner, officer, director, or employee of a broker-dealer must be fingerprinted and submit his or her fingerprints to the U. S. Attorney General. This requirement does not apply, however, to broker-dealers that sell only certain securities that are not ordinarily evidenced by certificates (such as mutual funds and variable annuities) or to persons who do not sell securities, have access to securities, money or original books and records, and do not supervise persons engaged in such activities. A broker-dealer claiming an exemption must comply with the notice requirements of Rule 17f-2. Broker-dealers may obtain fingerprint cards from their SRO and should submit completed fingerprint cards to the SRO for forwarding to the FBI on behalf of the Attorney General. D. Use of Electronic Media by Broker-Dealers The Commission has issued two interpretive releases discussing the issues that broker-dealers should consider in using electronic media for delivering information to customers. These issues include the following: Will the customer have notice of and access to the communication Will there be evidence of delivery Did the broker-dealer take reasonable precautions to ensure the integrity, confidentiality, and security of any personal financial information See Securities Exchange Act Release No. 37182 (May 15, 1996), 61 FR 24644. See also . Securities Exchange Act Release No. 39779 (March 23, 1998), 63 FR 14806 (sec. govrulesinterp33-7516.htm ). E. Electronic Signatures (E-SIGN) Broker-dealers should also consider the impact, if any, that the Electronic Signatures in Global and National Commerce Act (commonly known as E-SIGN), Pub. L. No. 106-229, 114 Stat. 464 (2000) 15 U. S.C. sect7001, has on their ability to deliver information to customers electronically. F. Anti-Money Laundering Program Broker-dealers have broad obligations under the Bank Secrecy Act (quotBSAquot) 13 to guard against money laundering and terrorist financing through their firms. The BSA, its implementing regulations, and Rule 17a-8 under the Exchange Act require broker-dealers to file reports or retain records relating to suspicious transactions, customer identity, large cash transactions, cross-border currency movement, foreign bank accounts and wire transfers, among other things. The BSA, as amended by the USA PATRIOT Act, as well as SRO rules (e. g. NASD Rule 3011 and NYSE Rule 445), also requires all broker-dealers to have anti-money laundering compliance programs in place. Firms must develop and implement a written anti-money laundering compliance program, approved in writing by a member of senior management, which is reasonably designed to achieve and monitor the member39s ongoing compliance with the requirements of the BSA and its implementing regulations. Under this obligation, firms must: establish and implement policies and procedures that can be reasonably expected to detect and cause the reporting of suspicious transactions establish and implement policies, procedures, and internal controls reasonably designed to achieve compliance with the BSA and implementing regulations provide for independent testing for compliance, to be conducted by member personnel or by a qualified outside party designate and identify to the SROs an individual or individuals responsible for implementing and monitoring the day-to-day operations and internal controls of the program and provide prompt notification regarding any change in such designation(s) and provide ongoing training for appropriate personnel. For a compilation of key anti-money laundering laws, rules and guidance applicable to broker-dealers, see Anti-Money Laundering Source Tool sec. govaboutofficesocieamlsourcetool. htm see also, FINRA Anti-Money Laundering Issue Center finra. orgRulesRegulationIssueCenterAnti-MoneyLaunderingindex. htm. In addition, the Financial Crimes Enforcement Network (quotFinCENquot), the division within the Department of the Treasury that administers the BSA, provides useful information for helping financial institutions, including broker-dealers, meet their BSA obligations. See FinCEN Web site fincen. gov . G. Office of Foreign Assets Control Broker-dealers have an obligation to comply with the sanctions programs administered by the Department of Treasury39s Office of Foreign Assets Control (OFAC). OFAC administers and enforces economic and trade sanctions based on US foreign policy and national security goals against targeted foreign countries, terrorists, international narcotics traffickers, and those engaged in activities related to the proliferation of weapons of mass destruction. 14 OFAC acts under Presidential wartime and national emergency powers, as well as authority granted by specific legislation, to impose controls on transactions and freeze foreign assets under US jurisdiction. OFAC39s sanctions programs are separate and distinct from, and in addition to, the anti-money laundering requirements imposed under the BSA on broker-dealers. 15 Unlike the BSA, OFAC programs apply to all U. S. persons and are applicable across business lines. OFAC programs are also strict liability programs mdash there are no safe harbors and no de minimis standards, although having a comprehensive compliance program in place could act as a mitigating factor in any enforcement action. OFAC publishes regulations implementing each of its programs, which include trade restrictions and asset blockings against particular countries and parties tied to terrorism, narcotics trafficking, proliferation of weapons of mass destruction, as well as a number of programs targeting members of certain foreign jurisdictions. As part of its efforts to implement these programs, OFAC publishes a list of Specially Designated Nationals, which is frequently updated on an as-needed basis. 16 In general, OFAC regulations require you to do the following: block accounts and other property of specified countries, entities, and individuals prohibit or reject unlicensed trade and financial transactions with specified countries, entities, and individuals and report all blockings and rejections of prohibited transactions to OFAC within ten days of the occurrence and annually. 17 OFAC has the authority to impose civil penalties of over 1,000,000 per count for violations of its sanctions programs. OFAC has stated that it will take into account the adequacy of your OFAC compliance program when it evaluates whether to impose a penalty if an OFAC violation occurs. To guard against engaging in OFAC prohibited transactions, you should generally follow a best practice of quotscreening againstquot the OFAC lists. 18 Consistent with this best practice, you should take care to screen all new accounts, existing accounts, customers and relationships against the OFAC lists, including any updates to the lists. This screening should include originators or recipients of wire and securities transfers. 19 H. Business Continuity Planning The Commission, Federal Reserve Board, and Comptroller of the Currency published an interagency White Paper emphasizing the importance of core clearing and settlement organizations and establishing guidelines for their capacity and ability to restore operations within a short time of a wide-scale disruption. 20 Separately, the Commission also published a Policy Statement urging the organized securities markets to improve their business continuity arrangements, 21 and encouraging SRO-operated markets and electronic communications networks, or ECNs to establish plans to enable the restoration of trading no later than the business day following a wide-scale disruption. In 2004, NASD and the NYSE adopted rules requiring every member to establish and maintain a business continuity plan, with elements as specified in the rules, and to provide the respective SROs with emergency contact information. See NASD Rule 3510 and NYSE Rule 446. See also . sec. govrulessronasd34-49537.pdf . IX. WHERE TO GET FURTHER INFORMATION For general questions regarding broker-dealer registration and regulation: Office of Interpretation and Guidance Division of Trading and Markets U. S. Securities and Exchange Commission 100 F Street, NE Washington, DC 20549 (202) 551-5777 e-mail: tradingandmarketssec. gov For additional information about how to obtain official publications of SEC rules and regulations, and for on-line access to SEC rules: Superintendent of Documents Government Printing Office Washington, DC 20402-9325 gpo. gov For copies of SEC forms and recent SEC releases, Publications Section U. S. Securities and Exchange Commission 100 F Street, NE Washington, DC 20549 (202) 551-4040 Other useful addresses, telephone numbers, and websites: SEC39s website: sec. gov The SEC39s website contains contact numbers for SEC offices in Washington and for the SEC39s regional offices: sec. govcontactaddresses. htm . Financial Industry Regulatory Authority 9509 Key West Avenue Rockville, MD 20850 (301) 590-6500 (call center) (800) 289-9999 (to check on the registration status of a firm or individual) finra. org New York Stock Exchange, Inc. 20 Broad Street New York, NY 10005 (212) 656-3000 nyse North American Securities Administrators Association, Inc. 750 First Street, NE, Suite 1140 Washington, DC 20002 (202) 737-0900 nasaa. org Municipal Securities Rulemaking Board gt1900 Duke Street, Suite 600 Alexandria, VA 22314 (703) 797-6600 msrb. org Securities Investor Protection Corporation 805 15th Street, N. W. Suite 800 Washington, D. C. 20005-2215 (202)371-8300 sipc. org e-mail: asksipcsipc. org We wish to stress that we have published this guide as an introduction to the federal securities laws that apply to brokers and dealers. It only highlights and summarizes certain provisions, and does not relieve anyone from complying with all applicable regulatory requirements. You should not rely on this guide without referring to the actual statutes, rules, regulations, and interpretations. 1 The Division of Trading and Markets was known as the Division of Market Regulation from August 7, 1972, until November 14, 2007. 2 The treatment of dividend (or interest) reinvestment and stock purchase plans is addressed in Rule 102(c) of Regulation M. ( See Part V. A.7.) 3 Section 9(a) prohibits particular manipulative practices regarding securities registered on a national securities exchange. Section 10(b) is a broad quotcatch-allquot provision that prohibits the use of quotany manipulative or deceptive device or contrivancequot in connection with the purchase or sale of any security. Sections 15(c)(1) and 15(c)(2) apply to the over-the-counter markets. Section 15(c)(1) prohibits broker-dealers from effecting transactions in, or inducing the purchase or sale of, any security by means of quotany manipulative, deceptive or other fraudulent device, quot and Section 15(c)(2) prohibits a broker-dealer from making fictitious quotes. 4 These include Rules 10b-1 through 10b-18, 15c1-1 through 15c1-9, 15c2-1 through 15c2-11, and Regulation M. 5 In addition, Rule 11Ac1-3 requires broker-dealers to inform their customers, upon opening a new account and annually thereafter, of their policies regarding payment for order flow and for determining where to route a customer39s order. 6 The purpose of this disclosure is to inform the customer of the nature and extent of a broker-dealer39s conflict of interest. Broker-dealers are neither required to disclose the precise amount of these payments nor any formula that would allow a customer to calculate this amount. Nevertheless, Rule 10b-10 is not a safe harbor from the anti-fraud provisions. Recent enforcement actions have indicated that failures to disclose the nature and extent of the conflict of interest may violate Section 17(a)(2) of the 1933 Act. See Edward D. Jones amp Co. L. P. Securities Exchange Act Release No. 50910 (Dec. 22, 2004) Morgan Stanley DW, Inc. Securities Exchange Act Release No. 48789 (Nov. 17, 2003). 7 SEC, Report by Division of Market Regulation, Broker-Dealer Policies and Procedures Designed to Segment the Flow and Prevent the Misuse of Material Non-Public Information, 1989-1990 Transfer Binder Fed. Sec. L. Rep. (CCH) 84,520 at p. 80, 620-25 (March, 1990). 8 Rule 15g-1(a)(1) establishes a transaction exemption for brokers or dealers whose commission equivalents, mark-ups, and mark-downs from transactions in penny stocks during each of the immediately preceding three months and during eleven or more of the preceding twelve months, or during the immediately preceding six months, did not exceed five percent of its total commissions, commission equivalents, mark-ups, and mark-downs from transactions in securities during those months. 9 Exemptions from the requirements of Exchange Act Rules 15g-2 through 15g-6 are provided for non-recommended transactions, broker-dealers doing a minimal business in penny stocks, trades with institutional investors, and private placements. See Rule 15g-1. Rule 15g-9(c) exempts certain transactions from the requirements of Rule 15g-9. 10 See Certain Broker-Dealers Deemed Not To Be Investment Advisers, Exchange Act Release No. 51523 (April 12, 2005). 11 Rules 17a-2, 17a-7, 17a-8, 17a-10 and 17a-13 contain additional recordkeeping and reporting requirements that apply to broker-dealers. 12 When a broker-dealer is a member of more than one SRO, the SEC designates the SRO responsible for examining such broker-dealer for compliance with financial responsibility rules (the quotdesignated examining authorityquot). 13 The Currency and Foreign Transactions Reporting Act of 1970 (commonly referred to as the quotBank Secrecy Actquot) is codified at 31 U. S.C. 5311, et seq. The regulations implementing the Bank Secrecy Act are located at 31 CFR Part 103. 14 A list of countries subject to OFAC sanctions, as well as a list of individuals and companies owned or controlled by, or acting for or on behalf of, targeted counties (collectively called Specially Designated Nationals (SDNs)), is available on the OFAC website: treas. govofac . A summary of OFAC regulations as they apply to the securities industry can be found at the following link: treas. govofficesenforcementofacregulationst11facsc. pdf See also Federal Financial Institutions Examination Council Bank Secrecy ActAnti-Money Laundering Examination Manual (quotFFIEC Manualquot), at pages 137-145 (8242007). The FFIEC Manual contains an entire section outlining best practices for OFAC Compliance, including risk matrices. Although that manual is written for the banking community, it provides information which may be useful to broker-dealers. 15 See also FinCEN Interpretive Release No. 2004-02 quotUnitary Filing of Suspicious Activity and Blocking Reports, quot 69 Fed. Reg. 76847 (Dec. 23, 2004). 16 OFAC offers a RISS feed service as well as an email notice system which pushes out digital information about its programs, including updates to its SDN List. See treas. govofac. These may be especially helpful to smaller firms whose OFAC compliance programs are more manual in nature. 17 You will find forms for blocking and rejection reports on OFAC39s website using the following links: 18 The Financial Industry Regulatory Authority (FINRA) offers a tool that assists firms to search for names on OFAC lists: apps. finra. orgRulesRegulationOFAC1Default. aspx . 19 See also FFIEC Manual at 140 (quotthe extent to which the bank includes account parties other than accountholders (e. g. beneficiaries, guarantors, principals, beneficial owners, nominee shareholders, directors, signatories, and powers of attorney) in the initial OFAC review during the account opening process, and during subsequent database reviews of existing accounts, will depend on the bank39s risk profile and available technology. quot). 20 Interagency Paper on Sound Practices to Strengthen the Resilience of the U. S. Financial Systems, Securities Exchange Act Release No. 47638 (April 7, 2003), 68 FR 17809 (April 11, 2003), sec. govnewsstudies34-47638.htm . 21 Policy Statement: Business Continuity Planning for Trading Markets, Securities Exchange Act Release No. 48545 (September 25, 2003), 68 FR 56656 (October 1, 2003), sec. govrulespolicy34-48545.htm .