Attention Indies: New Branch Rules

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Oct 4, 2005 4:39 pm

NOW IN EFFECT.  MAKE SURE YOU ARE AWARE OF THE NEW DEFINITION OF A BRANCH OFFICE.


NASD will announce the effective date of the amended definition and<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />


interpretive material in a Notice to Members to be published shortly.


3010 Supervision


(g) Definitions


(2) (A) A ‘‘branch office’’ is any location where one or more associated persons of a


member regularly conducts the business of effecting any transactions in, or inducing or


attempting to induce the purchase or sale of any security, or is held out as such, excluding:


(i) Any location that is established solely for customer service and/or back office type


functions where no sales activities are conducted and that is not held out to the public as a


branch office;


(ii) Any location that is the associated person’s primary residence; provided that:


a. Only one associated person, or multiple associated persons, who reside at


that location and are members of the same immediate family, conduct business at the


location;


b. The location is not held out to the public as an office and the associated


person does not meet with customers at the location;


c. Neither customer funds nor securities are handled at that location;


d. The associated person is assigned to a designated branch office, and such


designated branch office is reflected on all business cards, stationery, advertisements


and other communications to the public by such associated person;


e. The associated person’s correspondence and communications with the


public are subject to the firm’s supervision in accordance with Rule 3010;


f. Electronic communications (e.g., e-mail) are made through the member’s


electronic system;


g. All orders are entered through the designated branch office or an electronic


system established by the member that is reviewable at the branch office;


h. Written supervisory procedures pertaining to supervision of sales activities


conducted at the residence are maintained by the member; and


i. A list of the residence locations is maintained by the member;


(iii) Any location, other than a primary residence, that is used for securities business


for less than 30 business days in any one calendar year, provided the member complies


with the provisions of paragraph (A)(2)(ii)a. through h. above;


(iv) Any office of convenience, where associated persons occasionally and


exclusively by appointment meet with customers, which is not held out to the public as an


office;*


(v) Any location that is used primarily to engage in non-securities activities and from


which the associated person(s) effects no more than 25 securities transactions in any one


calendar year; provided that any advertisement or sales literature identifying such


location also sets forth the address and telephone number of the location from which the


associated person(s) conducting business at the non-branch locations are directly


supervised;


(vi) The Floor of a registered national securities exchange where a member conducts


a direct access business with public customers; or


(vii) A temporary location established in response to the implementation of a business


continuity plan.


(B) Notwithstanding the exclusions provided in paragraph (2)(A), any location that is


responsible for supervising the activities of persons associated with the member at one or more


non-branch locations of the member is considered to be a branch office.


(C) The term ‘‘business day’’ as used in Rule 3010(g)(2)(A) shall not include any partial


business day provided that the associated person spends at least four hours on such business day


at his or her designated branch office during the hours that such office is normally open for


business.


____________


* Where such office of convenience is located on bank premises, signage necessary to comply


with applicable federal and state laws, rules and regulations and applicable rules and regulations


of the NYSE, other self-regulatory organizations, and securities and banking regulators may be


displayed and shall not be deemed “holding out” for purposes of this section.


* * * * *


IM–3010–1. Standards for Reasonable Review


In fulfilling its obligations pursuant to Rule 3010(c), each member must conduct a


review, at least annually, of the businesses in which it engages, which review must be reasonably


designed to assist in detecting and preventing violations of and achieving compliance with


applicable securities laws and regulations and with NASD Rules. Each member shall establish


and maintain supervisory procedures that must take into consideration, among other things, the


firm’s size, organizational structure, scope of business activities, number and location of offices,


the nature and complexity of products and services offered, the volume of business done, the


number of associated persons assigned to a location, whether a location has a principal on-site,


whether the office is a non-branch location, the disciplinary history of registered representatives


or associated persons, etc. The procedures established and the reviews conducted must provide


that the quality of supervision at remote offices is sufficient to assure compliance with applicable


securities laws and regulations and with NASD Rules. With respect to a non-branch location


where a registered representative engages in securities activities, a member must be especially


diligent in establishing procedures and conducting reasonable reviews. Based on the factors


outlined above, members may need to impose reasonably designed supervisory procedures for


certain locations and/or may need to provide for more frequent reviews of certain locations.


* * * * *


Oct 21, 2005 1:34 am

So what does this mean in plain language?

Oct 21, 2005 11:01 am

I've read that and wonder how EDJ isn't required that each office have a Series 24 principal.

Oct 24, 2005 10:44 am

Amen, Brother Beagle.

Oct 24, 2005 2:05 pm
Beagle:

I've read that and wonder how EDJ isn't required that each office have a Series 24 principal.


Exactly my thoughts!!

Nov 20, 2005 6:23 pm

Could the one person office be obsolete soon............?  

Nov 20, 2005 8:06 pm
Beagle:

I've read that and wonder how EDJ isn't required that each office have a Series 24 principal.





Beagle,



Jones has a series 24, principal over see each branch.



They are not compensated based on the commissions of the branch, as branch managers are.



Each and every trade that is entered is checked by a software program against the client's net worth and investment objectives.



Jones' arbitration case rate has been the lowest in the industry for decades.



Jones' system may be the model going forward.



BPD

______________________________________

The grass is still GREENER where you water it!

Nov 20, 2005 9:03 pm

Jones compliance system is a joke and you know it.  Don't even try to bring that crap in here.  What is the churn rate on funds transferred in?  Go and find that out and then tell me how great your compliance system is.

Nov 21, 2005 9:11 pm

False,



Would you disagree that Jones has the lowest arbitration case rate in the industry?



BPD

Nov 22, 2005 9:47 am
BigPayDay:

False,

Would you disagree that Jones has the lowest arbitration case rate in the industry?

BPD


Do you have some supporting evidence for this?

Nov 22, 2005 9:05 pm

MB,



Most recent info I could find:



http://www.weissratings.com/News/Broker/20020514broker.htm



Have you been able to find anything more updated?



BPD



P.S. Sorry you have to copy and paste the url.

Nov 23, 2005 1:45 pm
BigPayDay:

MB,

Most recent info I could find:

http://www.weissratings.com/News/Broker/20020514broker.htm

Have you been able to find anything more updated?

BPD

P.S. Sorry you have to copy and paste the url.


Thanks for the link. It's interesting, but even if you assume that Weiss is reliable, the data all comes from before Jones got itself in the regulatory bind over mutual funds, doesn't it?

Nov 23, 2005 9:36 pm

MB,



I was discussing arbitration case rate, not NASD / SEC fines paid for by the firm.



The settlement would not negatively impact Jones arbitration case rate.



I beleive the Weiss data comes from the SIA, so it should be very reliable.



Do you have more recent information than this?



BPD

Nov 23, 2005 11:06 pm
BigPayDay:

MB,

I was discussing arbitration case rate, not NASD / SEC fines paid for by the firm.

The settlement would not negatively impact Jones arbitration case rate.

I beleive the Weiss data comes from the SIA, so it should be very reliable.

Do you have more recent information than this?

BPD


We're assuming that Weiss did a responsible job reading the SIA info and categorizing it. That's yet to be established.


I wouldn't be so sure that there won't be arbitration impacts from clients getting p@#$%d off when they find out they were steered to specific fund families because it benefitted the broker and his firm. There's a whole can of worms that have been opened there, and at the very least, Jone's "we do what's right for the customer" meme is dead, dead, dead.

Nov 23, 2005 11:36 pm

MB,



The settlement was a year ago. In February this year OUR client's ranked EJ number one in customer satisfaction according to JD Power. You under estimate the power of the relationship we have with our clients and it is because we treat them as we would want to be treated. Period. I do not believe it (The settlement.) has or will lead to any higher rate of arbitrations at EJ. You keep dreaming.



BPD

Nov 24, 2005 1:12 pm
BigPayDay:

MB,

The settlement was a year ago. In February this year OUR client's ranked EJ number one in customer satisfaction according to JD Power. You under estimate the power of the relationship we have with our clients and it is because we treat them as we would want to be treated. Period. I do not believe it (The settlement.) has or will lead to any higher rate of arbitrations at EJ. You keep dreaming.

BPD


BigPayDay


Yes, we are all California dreaming these days............


As for JD Power award, did they ask the question:


If you found out your Broker and or Firm was compensated more to sell particular Funds to you and did not disclose this helped them win trips, and they were fined by the sec 75 million Dollars aand their Managing General Partner avoided going to jail and nailed for Fraud by paying 3 million Dollars in fines, but had to leave the Firm, how high would you rate this Firm?


What if you were told the name of this Firm is Edward Jones, how high would you rate them?


BFD, do they ask these questions, NO........... 

Nov 25, 2005 7:59 am

candy bar with lots of nuts,


"most recent" info you posted was from 2002 based on info filed between 1997 and 2001?  Although a very reliable organization Weiss is best known for it's insurance company ratings.


Please try again with more "current" info.

Nov 25, 2005 2:18 pm

Eddjones 654,



Do you have more recent info on abitration case rates per firm?



BPD

Nov 25, 2005 4:30 pm

bpd,


Perhaps my reading comprehension is as bad yours but I'm pretty sure eddjones654 asked YOU to provide more recent stats.

Nov 25, 2005 6:43 pm

CJ,



If I had them I would. You're the compliance guy, you should know.



BPD