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Reg S-P: Will Your Business be affected?

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Apr 30, 2007 2:47 am

If you are an independent advisor, read: 0Briefing%20-%20SEC%20Interpretation%20of%20Reg%20S-P%2003-2 7-07.pdf

Apr 30, 2007 2:11 pm

Didn't read the entire 13 pages but from what I gathered it means that we will not be able to have transfer forms pre-prepared in bulk and then contact the clients for their signatures or have bulk transfers at all.

This wouldn't have changed anything for me in my transfer from one BD to another.  I had to contact each client individually, and hand complete the ACAT form for the client's signature. 

Just more paperwork.

Apr 30, 2007 2:52 pm

13 pages, and they say MY posts are long!

I think that this is a significant issue. I would use it as a hobby horse for my "Brokers Of The World Unite" speech, but May Day is tomorrow, alas.

It will impact the rhetoric (and the fact) of Indy B/Ds in that they'll have to change their docs if they are going to be able to say in rectuiting meetings; "It's your book and we will bulk transfer it to anywhere you choose if you decide to leave."

If I read (the part that I read) correctly, if the New Account Form of the indy BD says "You give us the right to transfer this account at the instruction of your FA to any other BD as directed by that FA, without further notice from us." and the client signs off on that (what client wouldn't BTW? If they are following you to the new firm, they'll probably sign whatever paper you put in front of them. Failing this the BD will have an "OPT OUT" box for the client to check ."

Wirehouses will want to drag their feet on this issue, but, since they have entered into the "Protocol" agreement with other wires they have opened themselves up to "Detrimental Reliance" lawsuits if they are not acting with all due haste.

Not to shine my own medals, but... Did you notice? They underlined the concept that I argued earlier, that it is (by a reasonable reading of the statutes) just as illegal for the BD to be sharing confidential client information with the "replacement" broker without first getting the client's permission.

Thanks mucho for el linko, Mucho. Next time, couldja give us the Ron Reagan version, tho?

Apr 30, 2007 2:56 pm

I’m having a hard time seeing how I would give personal client information to a firm before they become a client. What’s the big deal?