Is your home a branch office?
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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" /><?:NAMESPACE PREFIX = O />
interpretive material in a Notice to Members to be published shortly.
(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
(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
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
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
(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
(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
(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
* 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.
* * * * *
if we only didn’t have lawyers, we wouldn’t be putting up with the paperwork we now handle.
O.K. I’ll bite, how does this affect Jones ? I know of rep who is still working out of his home after 11 months.
can you say "fee grab"
Guess which firm of the greatest salepeople in the world is flipping out about this requirement 'cuz all they had were "sub-branches" and the "branch manager" (a.k.a. FSD a.k.a. Field Supervision Director) was located in St.Louis?
Hey Steve do you know if the new classification of "branch" will require a properly qualified Branch Manager at each branch?