California Code of Regulations › Title 10 - Investment › Chapter 3 - Commissioner of Financial Protection and Innovation › Subchapter 2 - Corporate Securities › Article 9 - Regulation of Broker-Dealers and Agents › Section 260.216.2 - Confirmation of Transactions

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) The phrase "manipulative, deceptive, or
				  other fraudulent scheme, device or contrivance," as used in subdivision (a) of
				  Section 25216 of the Code, is hereby
				  defined to include any act of any broker-dealer designed to effect for or with
				  the account of a customer any transaction in, or to induce the purchase or sale
				  by such customer of, any security (other than U.S. Savings Bonds or municipal
				  securities) unless such broker-dealer at or before completion of such
				  transaction, gives or sends to such customer written notification disclosing:
(1) Whether it is acting as agent for such
				  customer, as agent for some other person, as agent for both such customer and
				  some other person, or as principal for its own account; and
(2) The date and time of the transaction (or
				  the fact that the time of the transaction will be furnished upon written
				  request of such customer) and the identity, price and number of shares or units
				  (or principal amount) of such security purchased or sold by such customer;
				  and
(3) In the case of any
				  transaction in a debt security subject to redemption before maturity, a
				  statement to the effect that such debt security may be redeemed in whole or in
				  part before maturity, that such a redemption could affect the yield represented
				  and that additional information is available upon request; and
(4) In the case of a transaction in a debt
				  security effected exclusively on the basis of a dollar price:
(A) The dollar price at which the transaction
				  was effected, and
(B) The yield to
				  maturity calculated from the dollar price; provided, however, that this
				  paragraph (B) shall not apply to a transaction in a debt security with a
				  maturity date that may be extended by the issuer thereof, with a variable
				  interest rate payable thereon, or a participation interest in notes secured by
				  liens upon real estate continuously subject to prepayment;
				  and
(5) In the case of a
				  transaction in a debt security effected on the basis of yield:
(A) The yield at which the transaction was
				  effected, including percentage amount and its characterization (e.g., current
				  yield, yield to maturity, or yield to call); and if effected at yield to call,
				  the type of call, the call date and call price;
(B) The dollar price calculated from the
				  yield at which the transaction was effected; and
(C) If effected on a basis other than yield
				  to maturity and the yield to maturity is lower than the represented yield, the
				  yield to maturity as well as the represented yield; provided, however, that
				  this paragraph shall not apply to a transaction in a debt security with a
				  maturity date that may be extended by the issuer thereof, with a variable
				  interest rate payable thereon, or a participation interest in notes secured by
				  liens upon real estate continuously subject to prepayment;
				  and
(6) Whether any
				  odd-lot differential or equivalent fee has been paid by such customer in
				  connection with the execution of an order for an odd-lot number of shares or
				  units (or principal amount) of a security and that the amount of any such
				  differential or fee will be furnished upon oral or written request; provided,
				  however, that such disclosure need not be made if the differential or fee is
				  included in the remuneration disclosed, or exempted from disclosure, pursuant
				  to subsection (a)(7)(B) of this section; and
(7) If it is acting as agent for such
				  customer, for some other person, or for both such customer and some other
				  person:
(A) The name of the person from whom
				  the security was purchased or to whom it was sold, for such customer or the
				  fact that such information will be furnished upon written request of such
				  customer; and
(B) The amount of any
				  remuneration received or to be received by it from such customer in connection
				  with the transaction, unless remuneration paid by such customer is determined,
				  pursuant to a written agreement with such customer, otherwise than on a
				  transaction basis; and
(C) The
				  source and amount of any other remuneration received or to be received by it in
				  connection with the transaction; provided, however, that if, in the case of a
				  purchase, the broker-dealer or agent was not participating in a distribution,
				  or, in the case of a sale, was not participating in a tender offer, the written
				  notification may state whether any other remuneration has been or will be
				  received and that the source and amount of such other remuneration will be
				  furnished upon written request of such customer; and
(8) If it is acting as principal for its own
				  account:
(A)
1. If is not a market maker in that security
				  and, if, after having received an order to buy from such customer, it purchased
				  the security from another person to offset a contemporaneous sale to such
				  customer, or, after having received an order to sell from such customer, it
				  sold the security to another person to offset a contemporaneous purchase from
				  such a customer, the amount of any mark-up, mark-down, or similar remuneration
				  received in an equity security; or
2. In any other case of a transaction in a
				  reported security, the trade price reported in accordance with an effective
				  transaction reporting plan, the price to the customer in the transaction, and
				  the difference, if any, between the reported trade price and the price to the
				  customer.
(B) In the case
				  of a transaction in an equity security, whether it is a market maker in that
				  security (otherwise than by reason of its acting as a block positioner in that
				  security).