Chapter 11 Flashcards
The SEC has jurisdiction over
exchanges, SROs, and all persons required to be registered under federal law. The SEC does not enforce state securities statutes, nor does it have jurisdiction over banks or savings and loans regarding their securities activities. Banking authorities, such as the Federal Reserve Board, the Federal Deposit Insurance Corporation, and others, regulate banks and savings and loans.
As defined in the Uniform Securities Act, which of the following statements is true regarding an agent?
“Agent means any individual other than a broker-dealer who represents a broker-dealer or issuer in effecting or attempting to effect purchases or sales of securities.
With the growth of the internet, NASAA developed an interpretive order concerning broker-dealers, investment advisers, agents, and investment adviser representatives using the internet for general dissemination of information on products and services.
Meeting all of the requirements stated in the answer is necessary:
The internet communication contains a legend in which it is clearly stated that the broker-dealer, IA, agent, or IAR in question may transact business in this state only if first registered, excluded, or exempted from state broker-dealer, IA, agent, or IAR registration requirements, as may be the case.
The internet communication contains a legend in which it is clearly stated that follow-up; individualized responses to persons in this state by the broker-dealer, IA, agent, or IAR that involve either the effecting or attempting to effect transactions in securities; or the rendering of personalized investment advice for compensation, as may be, will not be made absent compliance with state broker-dealer, IA, agent, or IAR registration requirements, or an applicable exemption or exclusion.
The internet communication contains a mechanism—including and without limitation, technical firewalls, or other implemented policies and procedures—designed reasonably to ensure that before any subsequent, direct communication with prospective customers or clients in this state, the broker-dealer, IA, agent, or IAR is first registered in this state or qualifies for an exemption or exclusion from such requirement.
The internet communication does not involve either effecting or attempting to effect transactions in securities, or the rendering of personalized investment advice for compensation, as may be, in this state over the internet, but is limited to the dissemination of general information on products and services being offered.
Anyone who represents an issuer in effecting transactions between the underwriter and the issuer
is excluded from the definition of agent under the Uniform Securities Act. When an individual represents an issuer (not a broker-dealer), the Uniform Securities Act provides several exclusions from the definition of an agent. One of those is representing the issuer in an exempt transaction.
