Compilation of Rules and Regulations of the State of Georgia › Department 590 - RULES OF OFFICE OF SECRETARY OF STATE › Chapter 590-4 - COMMISSIONER OF SECURITIES › Subject 590-4-5 - BROKER-DEALERS AND AGENTS › Rule 590-4-5-.12 - Supervisory Requirements

Current through Rules and Regulations filed through June 27, 2024
(1) Every broker-dealer registered, or
				required to be registered, under the Act shall exercise diligent supervision
				over the activities of its agents and associated persons.
(a) Each agent and other associated person
				shall be subject to the supervision of a designated supervisor.
(b) Written procedures, a copy of which shall
				be kept or capable of being accessed in each Office of Supervisory Jurisdiction
				("OSJ"), shall be established, maintained and enforced, and shall set forth the
				standards and procedures adopted to comply with the requirements imposed by the
				Act and the Rules, including, but not limited to, the following:
1. Administrative review and written approval
				of all new customer accounts;
2.
				Periodic examination of customer accounts to detect and prevent irregularities
				or abuses;
3. Prompt administrative
				review of all customer complaints and arbitrations;
4. Prompt administrative review of
				correspondence pertaining to the solicitation and execution of securities
				transactions; and
5. The review by
				the designated supervisor, and his or her written approval, of the delegation
				by any customer of discretionary authority with respect to his or her account,
				and the frequent, periodic examination of all such discretionary accounts to
				prevent irregularities or abuses.
(c) Each registered agent, individually or
				collectively, shall participate, not less than annually, in an interview or
				meeting conducted by persons designated by the broker-dealer at which
				compliance matters relevant to the activities of the agent(s) are discussed.
				Such interview or meeting may occur in conjunction with the discussion of other
				matters and may be conducted at a central or regional location or at the
				agent's place of business.
(d) Each
				broker-dealer shall conduct a review, at least annually, of the businesses in
				which it and its registered agents engage that shall be reasonably designed to
				assist in detecting and preventing violations of, and achieving compliance
				with, the Act and the Rules. Each broker-dealer shall review the activities of
				each of its offices, including periodic examinations of customer accounts to
				detect and prevent irregularities or abuses, and each broker-dealer shall
				conduct at least an annual inspection of each OSJ. Each branch office of the
				broker-dealer shall be inspected according to a cycle that shall be set forth
				in the broker-dealer's written supervisory and inspection procedures. In
				establishing such a cycle, the broker-dealer shall give consideration to the
				nature and complexity of the securities activities for which the location is
				responsible, the volume of business done and the number of associated persons
				assigned to the location. Each broker-dealer shall retain a written record of
				the dates upon which each review and inspection is conducted.
(e) It shall be the responsibility of each
				broker-dealer and supervisor to ascertain that all agents are properly
				registered, as required by the Act and the Rules, prior to making offers or
				sales of securities.
(f) It shall
				be the responsibility of each broker-dealer and their supervisors to ensure
				that all associated persons of such broker-dealer are properly trained
				regarding the disclosure requirements and the civil and criminal liability
				provisions of the Act.
(g) It shall
				be the responsibility of each broker-dealer and their supervisors to approve
				all outside investment and securities business activities of each agent prior
				to the agent engaging in such activity.