Dc Forex Broker

Best Forex Broker FX Trading Unterschiedliche Wahl FBC Inc. Wir freuen uns, unseren aktuellen und zukünftigen Kunden bekannt zu geben, dass wir das International Finance Magazine IFM Award der Best Money Manager Seychellen 2013 gewonnen haben. Sie finden uns zusammen mit allen anderen Gewinnen der folgenden Kategorie Website veröffentlicht am 21. November 2013. In den letzten Monaten hat sich die Zahl unserer Kunden aus Asien deutlich erhöht, was uns viel Freude macht Forex Trading in Asien wurde in letzter Zeit sehr beliebt, deshalb widmen wir uns besonders bei allen unseren Kunden aus dem asiatischen Region mit der höchsten Qualität der Dienstleistung Wir sind am 19. April 2013.CFX Broker ist ein solches Unternehmen, das bekannt wurde und erkannt auf jedem Kontinent der Welt in einer sehr kurzen Zeitspanne aufgrund der Marketing-Strategie und professionelle Unternehmen Sales-Team Wir legen großen Wert auf die Expansion auf dem Mittleren Osten und Afrika Region sowie wir ma posted on Apr 11, 2013.Letzte News. Dear Kunden, wir informieren Sie, dass seit etwa 09 00 Uhr GMT heute können Sie haben Erlebte Verbindungsverluste und Netzwerkprobleme Einer unserer Dienstleister erlebte einen Internetverbindungsfehler, so dass Teile unserer Seite nicht am 12. Juni 2015 veröffentlicht wurden. Swap ist eine Art von Provision, die für die Übertragung der geöffneten berechnet wird Positionen in der Nacht Wenn Sie einen Handel eröffnen, verkaufen Sie eine Währung und kaufen eine andere Da die Währungen verschiedene Zinsen berechnen, können Sie entweder sammeln am 03. April 2015.Wir haben vor 2 Monaten angekündigt, dass unsere eigene Web-Office-Anwendung gewesen war Freigegeben für Android und Windows Phone Nun möchten wir unsere Kunden benachrichtigen, dass wir die Entwicklung der App auf iOS beendet haben. Es gibt immer noch die Möglichkeit, die am 09. März 2015 veröffentlicht wurde. Lösungen für Investoren und Institutionen. IB SM, IB Universal Account , Interactive Analytics, IB Options Analytics SM IB SmartRouting SM Portfolio Analyst TM und IB Trader Workstation SM sind Dienstleistungsmarken und Marken von Interactive Brokers LLC Unterlagen für alle Ansprüche und statistische Informationen werden auf Anfrage zur Verfügung gestellt. Alle dargestellten Handelssymbole dienen der Veranschaulichung Nur und sind nicht beabsichtigt, Empfehlungen darzustellen. Das Risiko des Verlustes im Online-Handel von Aktien, Optionen, Futures, Forex, ausländische Aktien und Anleihen können erhebliche Optionen sind nicht geeignet für alle Investoren. Für weitere Informationen lesen Sie die Merkmale und Risiken von Standardisierte Optionen Für einen Exemplar-Besuch Vor dem Handel müssen die Kunden die relevanten Risiken zur Offenlegung von Risiken auf unserer Warnings and Disclaimer-Seite lesen. Der Handel mit Margin ist nur für anspruchsvolle Anleger mit hoher Risikobereitschaft Sie können mehr als Ihre ursprüngliche Investition verlieren. Weitere Informationen zum Margin-Darlehen Raten, siehe Sicherheits-Futures beinhalten ein hohes Maß an Risiko und sind nicht für alle Anleger geeignet Der Betrag, den Sie verlieren können, kann größer sein als Ihre ursprüngliche Investition Bevor Sie Sicherheits-Futures handeln, lesen Sie bitte die Security Futures Risk Disclosure Statement Für einen Kopiebesuch Es gibt einen Erhebliches Verlustrisiko im Devisenhandel Der Abrechnungstermin der Devisengeschäfte kann aufgrund von Zeitzonenunterschieden und Bankfeiertagen variieren. Wenn der Handel über Devisenmärkte gehandelt wird, kann dies eine Kreditaufnahme zur Abwicklung von Devisengeschäften erfordern. Der Zinssatz für Fremdkapital muss sein Bei der Berechnung der Kosten der Trades über mehrere Märkte hinweg. INTERAKTIVE BROKERS ENTITIES. INTERACTIVE BROKERS LLC ist Mitglied NYSE - FINRA - SIPC und reguliert von der US Securities and Exchange Commission und der Commodity Futures Trading Commission Headquarters One Pickwick Plaza, Greenwich, CT 06830 USA. INTERAKTIVER BROKER KANADA INC ist Mitglied der Investment Industry Regulatory Organization of Canada IIROC und Mitglied - kanadischen Investor Protection Fund Kennen Sie Ihren Berater View the IIROC AdvisorReport Der Handel mit Wertpapieren und Derivaten kann ein hohes Maß an Risiko und Investoren vorbereiten Das Risiko, ihre gesamte Investition zu verlieren und weitere Beträge zu verlieren Interactive Brokers Canada Inc ist ein ausführender Händler und bietet keine Anlageberatung oder Empfehlungen zum Kauf oder Verkauf von Wertpapieren oder Derivaten Eingetragenes Büro 1800 McGill College Avenue, Suite 2106, Montreal , Quebec, H3A 3J6, Kanada. INTERAKTIVE BROKER INDIEN PVT LTD ist Mitglied von NSE BSE BSE INB FE 011288033 CM F NSDL IN-DP-NSDL-301-2008 CIN-U67120MH2007FTC170004 Eingetragenes Büro 502 A, Times Square, Andheri Kurla Road, Andheri East, Mumbai 400059, Indien Tel 91-22-61289888 Fax 91-22-61289898.INTERAKTIVE BROKERS SECURITIES JAPAN INC 187 03-4588-9700 8 30-17 30 Eingetragenes Büro 4. Stock Tekko Kaikan, 3-2-10 Nihonbashi Kayabacho , Chuo-Ku, Tokyo 103-0025 Japan. INTERAKTIVER BROKER HONG KONG LIMITED wird von der Hong Kong Securities and Futures Commission reguliert und ist Mitglied der SEHK und der HKFE Registered Office Suite 1512, Two Pacific Place, 88 Queensway, Admiralty , Hong Kong SAR. Guide to Broker-Dealer Registrierung. Division von Handel und Märkten 1 US Securities and Exchange Commission April 2008.Table of Contents. Who ist erforderlich zu registrieren. Wer ist ein Broker. Who ist ein Dealer. Was zu tun, wenn Sie denken, Sie können ein Broker oder ein Dealer sein. Brokers und Händler im Allgemeinen müssen sich mit der SEC registrieren. Assoziierte Personen eines Broker-Dealer. Intrastate Broker-Dealers. Broker-Händler, die ihr Geschäft auf ausgeschlossene und befreite Wertpapiere beschränken. Broker-Händler müssen vor dem Verkauf von unregistrierten Wertpapieren registrieren - Einschließlich Private Placements oder Regulierung D Angebote. Issuer s Exemption. Foreign Broker - Dealer Exemption. Requirements in Bezug auf Broker und Händler von staatlichen und kommunalen Wertpapiere, einschließlich Pensionsgeschäften. Spezielle Regeln, die auf Banken und andere Finanzinstitute anwenden. Sicherheitsagentur Networking. Real Estate Securities und Real Estate Broker Agents. Broker-Dealer Beziehungen mit Affinity Groups. Wie registrieren Sie sich als Broker-Dealer. SRO Mitgliedschaft. SIPC Mitgliedschaft. State Requirements. Associated Persons. Successor Broker-Dealer Registrierung. Withdrawal von der Registrierung Stornierung der Registrierung. Security Futures. Conduct Regulierung der Broker-Dealer. Antifraud Provisions. Duty von Fair Dealing. Suitability Requirements. Duty of Best Execution. Customer Bestätigung RegelDisclosure of Credit Terms. Restrictions auf Short Sales Regulierung SHO. Trading während einer Angebotsverordnung M. Restrictions auf Insider Trading. Restrictions auf Private Securities Transaktionen. Analysts und Regulierung AC. Trading von Mitgliedern von Börsen, Brokern und Händlern. Extending Credit auf neue Issues. Regulation NMS. Order Execution Obligations. Regulation ATS Broker-Dealer Trading Systems. Penny Stock Regeln. Privat der Verbraucher Finanzinformationen Regulierung SP. Investment Berater Registrierung. Financial Responsibility Broker-Dealers Capital Rule. Use von Kunden Guthaben. Kundenschutz. Benötigte Bücher, Aufzeichnungen und Berichte. Risk Assessment Requirements. Other Requirements. Examinations und Inspektionen. Lost und gestohlenen Wertpapiere Programm. Fingerprinting Anforderung. Verwendung von elektronischen Medien von Broker-Dealer. Elektronische Signaturen. Anti-Geldwäsche-Programm. Office of Foreign Assets Control. Business Kontinuität Pläne. Wo weitere Informationen erhalten. I EINFÜHRUNG. Das Securities Exchange Act von 1934 Exchange Act oder Act regelt die Art und Weise, in der die Nationen s Wertpapiere Märkte und ihre Broker und Händler Wir haben diesen Leitfaden vorbereitet, um einige der wesentlichen Bestimmungen des Gesetzes und seiner Regeln zusammenzufassen. Hier finden Sie Informationen darüber, ob Sie sich als Broker-Händler registrieren und wie Sie sich registrieren können, sowie die Verhaltensregeln Und die finanzielle Verantwortung Regeln, die Makler-Händler müssen folgen. CAUTION MACHEN SICHEREN SIE FOLGEN ALLE RECHTSVORSCHRIFTEN. Obwohl dieser Leitfaden hebt bestimmte Bestimmungen des Gesetzes und unsere Regeln, ist es nicht umfassende Broker und Händler und ihre assoziierten Personen müssen entsprechen Mit allen anwendbaren Anforderungen, einschließlich derjenigen der US Securities and Exchange Commission SEC oder Kommission, sowie die Anforderungen von Selbstregulierungsorganisationen, denen die Makler und Händler angehören, und nicht nur die hier zusammengefassten. Die SEC-Mitarbeiter sind bereit für Beantworten Sie Ihre Fragen und helfen Sie bei der Einhaltung unserer Regeln Nach dem Lesen dieses Leitfadens, wenn Sie Fragen haben, wenden Sie sich bitte an das Amt für Interpretation und Anleitung unter 202 551-5777 E-Mail oder das Regionalbüro der SEC in Ihrer Nähe Sie kontaktieren Finden Sie eine Liste der nützlichen Telefonnummern am Ende dieses Leitfadens oder auf der SEC s Website an. Sie können mit einem privaten Anwalt, der mit den Bundes-Wertpapiergesetze vertraut ist, zu konsultieren, um sicherzustellen, dass Sie alle Gesetze und Verordnungen Die SEC-Mitarbeiter können nicht als Einzelperson oder Vermittler-Rechtsanwalt tätig sein Während das Personal versucht, telefonisch an Personen zu telefonieren, die Anfragen stellen, ist die Anleitung informell und unverbindlich. Eine formale Anleitung kann durch eine schriftliche Anfrage gesucht werden Im Einklang mit den SEC-Richtlinien für Nicht-Handlungs-, Interpretations - und Befreiungsanträge. II WHO IST FÜR REGISTER ERFORDERLICH. Die meisten Makler und Händler müssen sich bei der SEC anmelden und sich einer Selbstregulierungsorganisation anschließen oder SRO Dieser Abschnitt behandelt die Faktoren, die bestimmen Ob eine Person ein Makler oder Händler ist Es beschreibt auch die Arten von Brokern und Händlern, die sich nicht bei der SEC registrieren müssen Selbstregulierungsorganisationen sind in Teil III unten beschrieben. Anmerkung über Banken Das Börsengesetz enthält auch besondere Bestimmungen in Bezug auf Zu den Vermittlungs - und Geschäftsaktivitäten der Banken Siehe §§ 3 a 4 B und 3 a 5 C und die damit zusammenhängenden Bestimmungen und konsultieren Sie den Rat. Die Aspekte der Bankhändlertätigkeit werden in einer Publikation der SEC-Abteilung für Handel und Märkte mit dem Titel Staff besprochen Compliance-Leitfaden für Banken auf Händlern Gesetzliche Ausnahmen und Regeln, die auf der SEC-Website bei Bank-Broker-Aktivitäten zur Verfügung stehen, werden in der Verordnung R, die gemeinsam von der Kommission und dem Gouverneursrat des Federal Reserve Systems See Exchange Act Release angenommen wurde, behandelt Nr. 56501 24. September 2007.A Wer ist ein Broker. Section 3 a 4 A des Gesetzes in der Regel definiert einen Broker breit als eine Person, die in der Geschäftstätigkeit der Durchführung von Transaktionen in Wertpapiere für die Rechnung von anderen engagiert. Manchmal können Sie leicht bestimmen Wenn jemand ein Makler ist Zum Beispiel, eine Person, die Transaktionen für andere auf einer Wertpapierbörse ausführt, ist ein Makler. Allerdings sind andere Situationen weniger klar. Zum Beispiel können sich jede der folgenden Personen und Unternehmen möglicherweise als Broker registrieren, je nachdem Eine Reihe von Faktoren. Finder, Geschäftsmakler und andere Einzelpersonen oder Körperschaften, die sich an folgenden Tätigkeiten beteiligen. Finden Sie Anleger oder Kunden für die Vermittlung oder Aufteilung von Provisionen mit registrierten Broker-Händlern, Investmentgesellschaften oder Investmentfonds, einschließlich Hedgefonds oder anderen Wertpapiervermittlern. Finden Sie Investmentbanking-Kunden für registrierte Broker-Händler. Finden Sie Investoren für Emittenten Entitäten, die Wertpapiere, auch in einem Berater Kapazität. Engaging in oder finden Investoren für Venture Capital oder Engelfinanzierungen, einschließlich private Placements. Finden Käufer und Verkäufer von Unternehmen, dh Aktivitäten In Bezug auf Fusionen und Übernahmen, in denen Wertpapiere beteiligt sind. Investitionsberater und FinanzberaterInnenvermittler-Händler, die sich nicht auf Regel 15a-6 im Rahmen des nachstehend erörterten Gesetzes verlassen können. Personen, die elektronische oder andere Plattformen betreiben oder kontrollieren, um Wertpapiere zu handeln Immobilien-Investment-Beteiligungen wie Mietverträge, die Wertpapiere sind, die als Vermittler für Privatplatzierungen von Wertpapieren tätig sind. Personen, die Transaktionen in Versicherungsprodukten vermarkten oder tätigen, die Wertpapiere sind, wie z. B. variable Annuitäten, oder Andere Anlageprodukte, die Wertpapiere sind, die Wertpapiertransaktionen für Rechnung von anderen gegen Gebühr erfordern, auch wenn diese anderen Personen Freunde oder Familienmitglieder sind. Personen, die Supportdienste für registrierte Broker-Händler und Personen, die als unabhängige Vertragspartner fungieren, zur Verfügung stellen , Aber sind nicht assoziierte Personen eines Maklers-Händler für Informationen über assoziierte Personen, siehe unten. Um festzustellen, ob einer dieser Personen oder eine andere Person oder ein Unternehmen ist ein Makler, schauen wir uns die Aktivitäten, die die Person oder Unternehmen tatsächlich Führt Sie finden Analysen von verschiedenen Aktivitäten in den Entscheidungen der Bundesgerichte und unsere eigenen No-Action und interpretative Briefe Hier sind einige der Fragen, die Sie fragen sollten, um festzustellen, ob Sie als Broker tätig sind. Nehmen Sie an wichtigen Teilen teil Eine Wertpapier-Transaktion, einschließlich Aufforderung, Verhandlung oder Ausführung der Transaktion. Do Ihre Entschädigung für die Teilnahme an der Transaktion hängt ab, oder ist es im Zusammenhang mit dem Ergebnis oder Größe der Transaktion oder Deal erhalten Sie nachlaufende Provisionen, wie 12b -1 Gebühren erhalten Sie eine andere Transaktions-bezogene Vergütung. Andernfalls handelt es sich sonst um die Durchführung von Geschäften oder die Erleichterung von Wertpapiergeschäften. Sie handeln die Wertpapiere oder Fonds von anderen im Zusammenhang mit Wertpapiergeschäften. Ja, auf diese Fragen zu antworten Zeigt an, dass Sie sich als Broker registrieren müssen. Wer ein Dealer ist. Unter einem Makler, der als Bevollmächtigter fungiert, handelt ein Händler als Hauptabteilung 3 a 5 A des Gesetzes in der Regel einen Händler als eine Person, die in der Geschäft von Kauf und Verkauf von Wertpapieren für eigene Rechnung, über einen Makler oder auf andere Weise. Die Definition des Händlers nicht enthalten einen Händler, das heißt, eine Person, die kauft und verkauft Wertpapiere für seine oder ihre eigenen Konto, entweder einzeln oder in einem Treuhänder Kapazität, aber nicht als Teil eines regelmäßigen Geschäfts Einzelpersonen, die kaufen und verkaufen Wertpapiere für sich selbst sind in der Regel als Händler und nicht Händler. Sochimes können Sie leicht sagen, wenn jemand ein Händler ist Zum Beispiel, eine Firma, die öffentlich bewirbt, dass es einen Markt in macht Wertpapiere ist offensichtlich ein Händler Andere Situationen können weniger klar sein Zum Beispiel, jeder der folgenden Personen und Unternehmen müssen möglicherweise als Händler registrieren, abhängig von einer Reihe von Faktoren. eine Person, die sich als bereit ist, zu kaufen und zu verkaufen ein Besondere Sicherheit auf einer kontinuierlichen basis. a Person, die ein abgestimmtes Buch von Pensionsgeschäften oder eine Person, die Ausgaben oder stammt Wertpapiere, die er auch kauft und verkauft. Hier sind einige der Fragen, die Sie fragen sollten, um festzustellen, ob Sie handeln als ein Dealer. Do Sie werben oder anderweitig lassen andere wissen, dass Sie im Geschäft der Kauf und Verkauf von Wertpapieren sind. Do Sie Geschäfte mit der Öffentlichkeit entweder Einzelhandel oder institutional. Do Sie machen einen Markt in oder zitieren Preise für beide Einkäufe und Verkäufe von , Eine oder mehrere Wertpapiere. Do Sie beteiligen sich an einer verkaufenden Gruppe oder anderweitig unterschreiben Wertpapiere. Do Sie bieten Dienstleistungen für Investoren, wie die Abwicklung von Geld und Wertpapiere, Verlängerung Kredit oder Investitionsberatung. Do Sie schreiben Derivate-Verträge, die Wertpapiere sind Ja Antwort auf eine dieser Fragen zeigt an, dass Sie möglicherweise als Händler registrieren müssen. C Was tun, wenn Sie denken, dass Sie ein Broker oder ein Dealer sein können. Wenn Sie tun oder tun können, eine der Aktivitäten eines Maklers Oder Händler, sollten Sie herausfinden, ob Sie registrieren müssen Informationen über die Broker-Händler Registrierung Prozess ist unten angegeben Wenn Sie nicht sicher sind, können Sie SEC Interpretationen zu überprüfen, konsultieren Sie mit privaten Rat oder wenden Sie sich um Rat von der SEC s Abteilung des Handels und der Märkte durch das Aufrufen von 202 551-5777 oder durch das Senden einer eMail zu bitte seien Sie sicher, Ihre Telefonnummer einzuschließen. Anmerkung Wenn Sie als ein Vermittler oder ein Händler fungieren, dürfen Sie nicht im Wertpapiergeschäft tätig sein, bis Sie sind Ordnungsgemäß registriert Wenn Sie bereits im Geschäft tätig sind und noch nicht registriert sind, sollten Sie alle Aktivitäten einstellen, bis Sie sich ordnungsgemäß registriert haben. Weitere Informationen finden Sie unter Teil II D und Teil III unten. Makler und Händler müssen sich grundsätzlich registrieren SEC. Section 15 a 1 des Gesetzes macht es in der Regel für jeden Broker oder Händler unnötig, die Mails oder andere Mittel des zwischenstaatlichen Handels wie das Telefon, Faksimiles oder das Internet zu benutzen, um Transaktionen zu bewirken oder zu veranlassen oder zu veranlassen Versuchen, den Kauf oder Verkauf von jeglicher Sicherheit zu veranlassen, es sei denn, dieser Makler oder Händler ist bei der Kommission gemäß § 15 b des Gesetzes registriert. Es gibt einige Ausnahmen von dieser allgemeinen Regel, die wir unten besprechen. Darüber hinaus besprechen wir das besondere Registrierungsanforderungen, die für Makler-Händler von staatlichen und kommunalen Wertpapieren gelten, einschließlich Pensionsgeschäften, unten.1 Assoziierte Personen eines Broker-Dealer. Wir rufen Personen, die für einen registrierten Makler-Händler assoziierten Personen arbeiten Dies ist der Fall, ob diese Personen sind Mitarbeitern, unabhängigen Vertragspartnern oder anderweitig mit einem Broker-Händler arbeiten Diese Personen können auch als Börsenmakler oder eingetragene Vertreter bezeichnet werden. Obwohl assoziierte Personen sich in der Regel nicht separat bei der SEC registrieren müssen, müssen sie von einem derzeit angemeldeten Broker - Händler Sie können sich auch bei den Selbstregulierungsorganisationen anmelden, deren Arbeitgeber beispielsweise Mitglied ist, die Finanzindustrie Regulierungsbehörde, Inc FINRA fka der National Association of Securities Dealers, Inc NASD oder eine nationale Wertpapierbörse Assoziierte Personen in Wertpapiertätigkeiten außerhalb der Aufsicht ihres Broker-Händlers tätig sind, müssten sie separat als Makler-Händler teilnehmen. Teil III, unten, gibt eine Diskussion darüber, wie man sich als Broker-Händler registriert. Wir unterscheiden nicht zwischen den Mitarbeitern Und andere assoziierte Personen für Wertpapierrecht Zwecke Broker-Händler müssen die Wertpapiere Aktivitäten ihres Personals zu überwachen, unabhängig davon, ob sie als Arbeitnehmer oder unabhängige Vertragspartner im Sinne des staatlichen Gesetzes Siehe z. B. In der Frage von William V Giordano Securities Exchange Act Release Nr 36742 19. Januar 1996. Das Gesetz erlaubt auch nicht unregistrierten Unternehmen, Provisionseinnahmen im Namen eines eingetragenen Vertreters zu erhalten. Zum Beispiel können assoziierte Personen keine getrennte Einrichtung zur Aufnahme von Provisionsschecks einrichten. Ein nicht registriertes Unternehmen, das in dieser Situation Provisionserträge erhält, muss Registrieren Sie sich als Broker-Händler Siehe zum Beispiel, Wolff Juall Investments, LLC 17. Mai 2005 Unter bestimmten Umständen können nicht registrierte Unternehmen in Lohn - und Gehaltsabrechnungsdienste mit Makler-Händlern tätig werden. Siehe z. B. Brief an ADP TotalSource, Inc 4. Dezember 2007 Diese Umstände, der Broker-Dealer-Arbeitgeber in der Regel mietet und überwacht alle Aspekte der Mitarbeiter Arbeit und nutzt die Abrechnung und profitiert Administrator nur als Mittel zur Zentralisierung von Personal-Service.2 Intrastate Broker-Dealer. Ein Broker-Händler, der alle seine Geschäfte führt In einem Staat muss sich nicht bei der SEC registrieren Registrierung ist eine andere Angelegenheit Siehe Teil III unten Die Ausnahme für intrastate Broker-Dealer-Aktivität ist sehr schmal Um zu qualifizieren, müssen alle Aspekte aller Transaktionen innerhalb der Grenzen eines Landes durchgeführt werden Bedeutet, dass ein Broker-Händler ohne SEC-Registrierung nicht an einer Transaktion teilnehmen kann, die an einer nationalen Wertpapierbörse ausgeführt wird. Ein Broker-Dealer, der ansonsten die Anforderungen der intrastate Broker-Dealer-Freistellung erfüllt, würde nicht für den intrastate Broker-Händler qualifizieren Befreiung nur, weil sie eine Website hat, die von den ausländischen Personen angesehen werden kann, solange der Makler-Händler Maßnahmen ergreift, die vernünftigerweise dafür sorgen, dass ihr Geschäft ausschließlich intrastiert bleibt. Diese Maßnahmen könnten die Verwendung von Haftungsausschlüssen beinhalten, die eindeutig darauf hinweisen, dass die Broker-Dealer s Geschäft ist ausschließlich intrastate und dass der Broker-Händler kann nur handeln für oder mit, und bieten Broker-Dealer-Dienstleistungen, eine Person in seinem Staat, solange der Broker-Händler nicht bieten Broker-Dealer Services an Personen, die darauf hindeuten, oder dass der Makler-Händler Grund zu der Annahme hat, sind nicht im Wohnsitz des Maklers-Händlers. Diese Maßnahmen sind nicht beabsichtigt, exklusiv zu sein. Ein Makler-Händler könnte andere Maßnahmen erlassen, die vernünftigerweise dafür sorgen, dass dies gewährleistet ist Es stellt keine Broker-Dealer-Dienste für Personen zur Verfügung, die nicht in demselben Zustand sind wie der Makler-Händler. Ein Vermittler-Geschäft wäre jedoch nicht ausschliesslich intratisch, wenn es Wertpapiere verkauft oder irgendwelche anderen Broker-Dealer-Services an eine Person weitergibt, die anzeigt Dass es ist, oder dass der Makler-Händler Grund zu glauben ist, nicht innerhalb des Wohnsitzes des Maklers-Händlers. Für zusätzliche Informationen über die Nutzung des Internets durch intrastate Broker-Händler, siehe ein Wort über kommunale und Regierung Wertpapiere Es gibt keine ausgesprochene Ausnahme von der Registrierung für Kommunal-Wertpapierhändler oder staatliche Wertpapier-Broker und Händler.3 Broker-Dealer, die ihr Geschäft auf ausgeschlossene und befreite Wertpapiere beschränken. Makler-Händler, der Geschäfte nur in Commercial Paper, Banker Akzeptanz und kommerzielle Geschäfte tätigt Rechnungen müssen sich nicht bei der SEC nach § 15 b oder einem anderen Teil des Gesetzes anmelden. Andererseits müssen Personen, die Geschäfte nur in bestimmten befreiten Wertpapieren tätig sind, im Sinne von § 3 a Abs. 12 des Gesetzes nicht registrieren Nach § 15 b, kann aber unter anderen Bestimmungen des Gesetzes registrieren müssen. Zum Beispiel müssen einige Maklerhändler von Staatsanleihen, die befreite Wertpapiere sind, als Staatsanleihenmakler oder Händler gemäß § 15C des Gesetzes, wie in Teil II E, unten.4 Broker-Dealers müssen vor dem Verkauf von nicht registrierten Wertpapieren einschließlich Private Placements oder Regulierung D Angeboten registrieren. Eine Sicherheit, die in einer Transaktion verkauft wird, die von der Registrierung nach dem Securities Act von 1933 befreit ist, ist das Gesetz von 1933 nicht unbedingt eine befreite Sicherheit Unter dem Börsengesetz Zum Beispiel darf eine Person, die Wertpapiere verkauft, die nach der Regulierung D des Gesetzes von 1933 von der Eintragung befreit sind, dennoch als Broker-Händler anmelden. Mit anderen Worten, die Vermittler sind nicht von der Broker-Händler-Registrierung befreit.5 Emittentin s Befreiung und assoziierte Personen von Emittenten Regel 3a4-1.Issuers sind in der Regel keine Makler, weil sie Wertpapiere für ihre eigenen Konten und nicht für die Konten von anderen zu verkaufen Darüber hinaus Emittenten sind in der Regel keine Händler, weil sie nicht kaufen und verkaufen ihre Wertpapiere für ihre eigenen Konten als Teil eines regulären Geschäfts Emittenten, deren Aktivitäten über den Verkauf ihrer eigenen Wertpapiere hinausgehen, müssen jedoch prüfen, ob sie sich als Broker-Händler registrieren müssten. Dazu gehören Emittenten, die ihre Wertpapiere von Anlegern erwerben, sowie Emittenten, die effektiv Märkte betreiben In eigenen Wertpapieren oder in Wertpapieren, deren Merkmale oder Konditionen sich ändern oder ändern können. Die so genannte Emittentenfreistellung gilt nicht für das Personal eines Unternehmens, das sich routinemäßig bei der Durchführung von Wertpapiergeschäften für das Unternehmen oder verbundene Unternehmen engagiert Allgemeine Gesellschafter, die Investoren in Kommanditgesellschaften suchen Die Angestellten und sonstigen verwandten Personen eines Emittenten, die bei der Veräußerung ihrer Wertpapiere helfen, können Makler sein, insbesondere wenn sie für den Verkauf dieser Wertpapiere bezahlt werden und nur wenige andere Pflichten haben. Exchange Act Regel 3a4-1 sieht vor, dass ein Assoziierte Person oder Angestellter eines Emittenten, der am Verkauf der Wertpapiere des Emittenten teilnimmt, müsste sich nicht als Broker-Händler registrieren, wenn diese Person zum Zeitpunkt der Teilnahme 1 nicht einer gesetzlichen Disqualifikation gemäß Abschnitt 3 unterliegt A 39 des Gesetzes 2 wird nicht durch Zahlung von Provisionen oder sonstigen Vergütungen, die direkt oder indirekt auf Wertpapiergeschäften beruhen, nicht kompensiert 3 ist keine assoziierte Person eines Maklers oder Händlers und 4 beschränkt seine Vertriebsaktivitäten, wie in der Regel festgelegt. Einige Emittenten bieten an Dividenden-Thesaurierung und Aktienkaufprogramme Unter bestimmten Voraussetzungen kann ein Emittent seine eigenen Wertpapiere über eine Dividenden-Thesaurierung oder ein Aktienkaufprogramm erwerben und verkaufen, ohne sich als Broker-Händler zu registrieren. Diese Bedingungen für die Aufforderung, Gebühren und Aufwendungen sowie die Abwicklung der Teilnehmerfonds und Wertpapiere, werden im Securities Exchange Act veröffentlicht. Nr. 35041 1. Dezember 1994, 59 FR 63393 1994 STA Letter Obwohl die Verordnung M 2 die Regel 10b-6 ersetzt und den STA-Brief von 1994 ersetzt hat, sind die in diesem Schreiben enthaltenen Personalpositionen in Bezug auf die Anwendung des Abschnitts 15 a des Börsengesetzes bleiben in Kraft Siehe 17 CFR 242 102 c und Securities Exchange Act Freigabe Nr. 38067 20. Dezember 1996, 62 FR 520, 532 n 100 3. Januar 1997.6 Ausländische Vermittler-Freistellungsregel 15a-6.Die SEC Verwendet in der Regel einen territorialen Ansatz bei der Anwendung von Registrierungsanforderungen an die internationalen Operationen von Broker-Händlern. Unter diesem Ansatz müssen alle Makler-Händler, die in den Vereinigten Staaten physisch tätig sind, die Wertpapiergeschäfte veranlassen oder versuchen, sich bei der SEC zu veranlassen, auch wenn ihre Aktivitäten sind Gerichtet nur an ausländische Investoren außerhalb der Vereinigten Staaten Darüber hinaus sind ausländische Makler-Händler, die von außerhalb der Vereinigten Staaten zu veranlassen, zu versuchen, zu veranlassen, Wertpapiertransaktionen von jeder Person in den Vereinigten Staaten, oder die Verwendung der Mittel oder Instrumente der zwischenstaatlichen Handel der Vereinigten Staaten zu diesem Zweck, muss auch registrieren Dies beinhaltet die Nutzung des Internets, um Wertpapiere anzubieten, Wertpapiergeschäfte zu erwerben oder Wertpapierdienstleistungen an US-Personen zu werben. Siehe Securities Exchange Act Release Nr. 39779 23. März 1998.Foreign Broker-Händler Die ihre Tätigkeit auf diejenigen beschränken, die nach Regel 15a-6 des Gesetzes zulässig sind, können jedoch von der US-Broker-Dealer-Registrierung befreit werden. Ausländische Vermittler-Händler, die sich auf diese Freistellung verlassen möchten, sollten die Wertpapierbörse Nr. 27017 mit Wirkung zum 15. August 2010 überprüfen. 1989, 54 FR 30013, um festzustellen, ob sie die Voraussetzungen der Regel 15a-6 erfüllen. Siehe auch Briefe für Wertpapiere Aktivitäten von US-abgeleiteten ausländischen Händlern 9. April und 28. April 1997 Darüber hinaus wurde im April 2005 die Abteilung für Marktregelung Mitarbeiter Veröffentlichte Antworten auf häufig gestellte Fragen zu Regel 15a-6 in Bezug auf Regel AC Siehe Regel AC wird in Teil VB, unten erwähnt. E Anforderungen an Makler und Händler von staatlichen und kommunalen Wertpapiere, einschließlich Pensionsgeschäfte. Broker-Händler, die ihre Tätigkeit zu begrenzen diskutiert An staatliche oder kommunale Wertpapiere bedürfen einer spezialisierten Registrierung Diejenigen, die ihre Tätigkeit auf Staatsanleihen beschränken, müssen sich nicht als Allzweck-Broker-Händler gemäß § 15 b des Gesetzes registrieren. Allzweck-Makler-Händler, die ein staatliches Wertpapiergeschäft betreiben, Muss diese Tätigkeit auf ihrem Formular BD Formular BD wird unten diskutiert Alle Unternehmen, die Makler oder Händler in staatlichen Wertpapieren müssen die Vorschriften des Sekretärs des Schatzamtes sowie SEC Regeln. Firmen, die ihre Wertpapiere Geschäft zu kaufen und zu begrenzen Verkauf von städtischen Wertpapieren auf eigene Rechnung Kommunale Wertpapierhändler müssen sich als Allzweck-Broker-Händler registrieren Wenn diese Unternehmen jedoch Banken sind oder die Anforderungen der in Teil II D 2 erörterten Intratenfreistellung erfüllen, müssen sie sich als kommunale Wertpapierhändler registrieren lassen Städtische Wertpapiermakler, die nicht Banken sind, müssen sich als Allzweck-Broker-Händler registrieren, es sei denn, sie qualifizieren sich für die intrastate Ausnahme Siehe Teil II D 2 oben. Unternehmen, die ein passendes Buch von Pensionsgeschäften oder anderen Aktienkrediten betreiben, gelten als Händler. Weil ein Buchhändler ausgeführt wird Hält sich als bereit, zu kaufen und zu verkaufen Wertpapiere, und ist damit in das Geschäft der Kauf und Verkauf von Wertpapieren engagiert, muss es als Broker-Dealer. F Spezielle Regeln, die auf Banken und ähnliche Finanzinstitute bewerben. Note Banken, thrifts, Und anderen Finanzinstituten sollte sich bewusst sein, dass die Kommission Regeln erlassen hat, die sie beeinflussen können Siehe Verordnung R, Securities Exchange Act Freigabe Nr. 34-56501 Sept. 24, 2007, 72 FR 56514 3. Oktober 2007 und Securities Exchange Act Release Nr. 34- 56502 Sept. 24, 2007 72 FR 56562 3. Oktober 2007.Bank Vor der Verabschiedung des Gramm-Leach-Bliley Act GLBA im Jahr 1999 wurden US-Banken von den Definitionen von Broker und Händler nach dem Gesetz ausgenommen. Das GLBA hat das Börsengesetz geändert , Und die Banken haben jetzt gewisse gezielte Ausnahmen und Befreiungen von der Broker-Dealer-Registrierung Derzeit sind die Banken aufgrund der Regierungsform der Kommission eine Phase-in-Zeit für die Einhaltung des neuen Gesetzes. Seit dem 1. Oktober 2003 sind Banken, die Wertpapiere kaufen und verkaufen Muss prüfen, ob sie Händler im Rahmen der föderalen Wertpapiergesetze sind Die Abteilung für Handel und Märkte hat einen speziellen Compliance-Leitfaden für Banken, mit dem Titel Personal Compliance Guide für Banken auf Händler Gesetzliche Ausnahmen und Regeln, die auf der SEC s Website bei Bank Brokerage zur Verfügung gestellt hat, herausgegeben Die Tätigkeit wird in der Verordnung R angesprochen, die gemeinsam von der Kommission und dem Gouverneursrat des Federal Reserve Systems verabschiedet wurde. Siehe Börsengesetz Nr. 56501 vom 24. September 2007, in dem sich die Bankausnahmen und Ausnahmen nur für Banken, Und nicht an verbundene Unternehmen Es ist wichtig zu beachten, dass Ausnahmen, die für Banken im Rahmen des Börsengesetzes gelten, in der von der GLBA geänderten Fassung, nicht für andere Unternehmen gelten, einschließlich Banken und Tochtergesellschaften, die nicht selbst Banken sind. Solche Tochtergesellschaften und Tochtergesellschaften Von Banken, die sich in Broker-Dealer-Aktivitäten engagieren, sind verpflichtet, sich als Broker-Händler nach dem Gesetz zu registrieren. Auch Banken, die als kommunale Wertpapierhändler oder als staatliche Wertpapiermakler oder Händler tätig sind, sind weiterhin verpflichtet, sich nach dem Gesetz zu registrieren. Verurteilt Sparvereinigungen haben den gleichen Status wie Banken und können von den gleichen gezielten Ausnahmen und Befreiungen von Broker-Händler Registrierung als Banken Gebrauch machen Für weitere Informationen, siehe die Personal Compliance Guide für Banken auf Händler Gesetzliche Ausnahmen und Regeln, wie oben erwähnt Banken ist es wichtig zu bemerken, dass Ausnahmen und Befreiungen, die auf Verpflichtungen anwendbar sind, nicht auf andere Unternehmen anwendbar sind, einschließlich Tochtergesellschaften und verbundenen Unternehmen, die nicht thrifts sind. Als solche sind Tochtergesellschaften und verbundene Unternehmen, die sich an Makler-Händler-Aktivitäten beteiligen, verpflichtet, sich als Makler zu registrieren - Ausländer im Rahmen des Gesetzes über die Kreditvereinigungen und Finanzinstitute Die Ausnahmen und Befreiungen für Banken nach dem Börsengesetz gelten nicht für andere Arten von Finanzinstituten wie Kreditgenossenschaften Die SEC-Mitarbeiter haben jedoch bestimmte Finanzinstitute, such as credit unions, to make securities available to their customers without registering as broker-dealers This is done through networking arrangements, where an affiliated or third-party broker-dealer provides brokerage services for the financial institution s customers, according to conditions stated in no-action letters and NASD Rule 2350.Under a networking arrangement, financial institutions can share in the commissions generated by their referred customers, under certain conditions The financial institution engaging in such networking must be in strict compliance with applicable law and Commission staff guidance See for example, letter re Chubb Securities Corporation November 24, 1993 and NASD Rule 2350 applicable to broker-dealers that enter into networking arrangements with banks, thrifts, and credit unions. G Insurance Agency Networking. The SEC staff has permitted insurance agencies to make insurance products that are also securities such as variable annuities available to their customers without registering as broker-dealers under certain conditions This again is done through networking arrangements, where an affiliated or third-party broker-dealer provides brokerage services for the insurance agency s customers, according to conditions stated in no-action letters These arrangements are designed to address the difficulties of dual state and federal laws applicable to the sale of these products Through networking arrangements, insurance agencies can share in the commissions generated by their referred customers under certain conditions Insurance agencies engaging in such networking must be in strict compliance with applicable law and Commission staff guidance Insurance companies should consult the letter re First of America Brokerage Services, Inc September 28, 1995 Those interested in structuring such an arrangement should contact private counsel or the SEC staff for further information. Notably, insurance networking arrangements are limited to insurance products that are also securities They do not encompass sales of mutual funds and other securities that do not present the same regulatory difficulties See letter re Lincoln Financial Advisors Corp February 20, 1998.H Real Estate Securities and Real Estate Brokers Agents. The offer of real estate as such, without any collateral arrangements with the seller or others, does not involve the offer of a security When the real estate is offered in conjunction with certain services, however, it may constitute an investment contract, and thus, a security See generally 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, 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 affinity groups, do not develop a salesman s stake with respect to the sale of securities See for example, letter re Attkisson, Carter 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 associated persons have satisfied applicable qualification requirements. 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 SEC s webpage at or through the SEC s 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 CRD , 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 US must also appoint the SEC as agent for service of process using a standard form Incomplete applications are not considered filed 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 National, Federal, United States, Reserve, or Deposit Insurance 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 FINRA s webpage at 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 MSRB s website at 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 members customers receive back their cash and securities in the event of a member s 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 SIPC s website at. D State Requirements. Every state has its own requirements for a person conducting business as a broker-dealer within that state Each state s securities regulator can provide you with information about that state s 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 NASAA s website at. E Associated Persons Section 3 a 18 Rule 15b7-1.The Act defines an associated person 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 individuals 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 Series 7 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 FINRA s website at 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 associated person 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-dealer s 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 SEC s website at 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 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-dealer s business is concluded in an orderly manner and that customers 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 filed unless it is deemed complete by the SEC and the SRO that reviews the filing The SEC may also cancel a broker-dealer s 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 CFTC 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 notice 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 antifraud 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 antifraud 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 Act s antifraud provisions mentioned above Under the so-called shingle theory, by virtue of engaging in the brokerage profession eg hanging out the broker-dealer s business sign, or shingle , 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 ie 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 NASD s 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 adequate and reasonable basis 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 customer s 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 customer s investment objectives.3 Duty of Best Execution. The duty of best execution, which also stems from the Act s 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 reasonable diligence 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 short sale is generally a sale of a security that the seller doesn t 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 locate and close-out requirements in order to address problems associated with failures to deliver, including potentially abusive naked 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 locate must be made and documented prior to effecting the short sale Market makers engaged in bona fide market making are exempted from the locate requirement. Close-out 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 threshold securities For instance, with limited exception, Regulation SHO requires brokers and dealers that are participants of a registered clearing agency to take action to close-out failure-to-deliver positions open fails 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 pre-borrowing requirement. Creating uniform order marking requirements for sales of all equity securities This means that a broker-dealer must mark orders as long or short. For further information, please see the adopting release for Regulation SHO, as well as Frequently Asked Questions, Key Points, and other related materials at.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. 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 offering s restricted period 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 offering s 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 basket of 20 or more securities. exercising options, warrants, rights, and convertible securities. effecting transactions that total less than 2 of the security s ADTV and. effecting transactions in securities sold to qualified institutional buyers. 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.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 no person associated with a member shall participate in any manner in a private securities transaction 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 analyst s 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 covered person 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 In addition, staff responses to frequently asked questions are available at. 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 Order Protection Rule 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 Access Rule 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 Sub-Penny Rule 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 Market Data Rules 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 Quote Rule and the Limit Order Display Rule, 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 ECNs, 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 specialist s or market maker s quote, the specialist or market maker must publicly display it The rule benefits investors because the publication of trading interest at prices that improve specialists and market makers 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 system s 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 exchange, or terms similar to the word exchange, such as the term stock market 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. H Penny Stock Rules Rules 15g-2 through 15g-9, Schedule 15G. Most broker-dealers that effect transactions in penny stocks 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 grandfathered 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 customer s 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 customer s 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 customer s 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 customer s 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 S P generally requires a broker-dealer to provide its customers with initial, annual and revised notices containing specified information about the broker-dealer s privacy policies and practices These notices must be clear and conspicuous, and must accurately reflect the broker-dealer s 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 S P 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. 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 solely incidental to the conduct of its business as a broker-dealer and that receives no special compensation 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 special compensation 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 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 customers 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-dealer s 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 programplying 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 SIC s website at. 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.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 7001 , 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 BSA 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 member s 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 see also, FINRA Anti-Money Laundering Issue Center In addition, the Financial Crimes Enforcement Network FinCEN , 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. G Office of Foreign Assets Control. Broker-dealers have an obligation to comply with the sanctions programs administered by the Department of Treasury s 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. OFAC s 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 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 screening against 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. 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. 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.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. SEC s website The SEC s website contains contact numbers for SEC offices in Washington and for the SEC s regional offices. 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. New York Stock Exchange, Inc 20 Broad Street New York, NY 10005 212 656-3000.North American Securities Administrators Association, Inc 750 First Street, NE, Suite 1140 Washington, DC 20002 202 737-0900.Municipal Securities Rulemaking Board 1900 Duke Street, Suite 600 Alexandria, VA 22314 703 797-6600.Securities Investor Protection Corporation 805 15th Street, N W Suite 800 Washington, D C 20005-2215 202 371-8300 e-mail. 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 catch-all provision that prohibits the use of any manipulative or deceptive device or contrivance 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 any manipulative, deceptive or other fraudulent device, 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 customer s order.6 The purpose of this disclosure is to inform the customer of the nature and extent of a broker-dealer s 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 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 designated examining authority.13 The Currency and Foreign Transactions Reporting Act of 1970 commonly referred to as the Bank Secrecy Act 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. A summary of OFAC regulations as they apply to the securities industry can be found at the following link. See also Federal Financial Institutions Examination Council Bank Secrecy Act Anti-Money Laundering Examination Manual FFIEC Manual , at pages 137-145 8 24 2007 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 Unitary Filing of Suspicious Activity and Blocking Reports, 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 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 OFAC s 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.19 See also FFIEC Manual at 140 t he 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 bank s risk profile and available technology.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, 2003.21 Policy Statement Business Continuity Planning for Trading Markets, Securities Exchange Act Release No 48545 September 25, 2003 , 68 FR 56656 October 1, 2003.