Alaska Administrative Code › Title 3 - Commerce, Community, and Economic Development › Part 1 - Banking, Securities, Small Loans and Corporations › Chapter 08 - Securities › Article 1 - Registration, Notice, and Regulation of Broker-Dealers, Agents, State Investment Advisers, and Federal Covered Advisers, and Investment Adviser Representatives › 3 AAC 08.065 - Sales of securities at financial institutions

Current through May 31, 2024
(a) This section
				  applies exclusively to broker-dealer services conducted by broker-dealers on
				  the premises of a financial institution where retail deposits are taken. This
				  section does not apply to broker-dealer services provided to non-retail
				  customers, such as institutional investors within the meaning of
				  AS
				  45.55.990(7)(D)(i) -
				  (iii).
(b) A broker-dealer may not conduct
				  broker-dealer services on the premises of a financial institution where retail
				  deposits are taken, unless the broker-dealer complies with the following
				  requirements:
(1) if practical, broker-dealer
				  services must be conducted in a physical location distinct from the area in
				  which the financial institution's retail deposits are taken; the broker-dealer
				  must identify its services in a manner that clearly distinguishes those
				  services from the financial institution's deposit-taking activities; the
				  broker-dealer's name must be clearly displayed in the area in which the
				  broker-dealer conducts its services;
(2) networking and brokerage affiliate
				  arrangements must be governed by a written agreement that sets out the
				  responsibilities of the parties and the compensation arrangements; that
				  agreement must provide that supervisory personnel of the broker-dealer and
				  representatives of the administrator are to be permitted access to the
				  financial institution's premises where the broker-dealer conducts broker-dealer
				  services in order to inspect the books and records and other relevant
				  information maintained by the broker-dealer with respect to broker-dealer
				  services; the broker-dealer must ensure that the agreement clearly outlines the
				  duties and responsibilities of each party;
(3) at or before the time that a customer's
				  securities brokerage account is opened by a broker-dealer on the premises of a
				  financial institution where retail deposits are taken, the broker-dealer must
(A) disclose, orally and in writing, that the
				  securities products purchased or sold in a transaction with the broker-dealer
				  are
(i) not insured by the Federal Deposit
				  Insurance Corporation (FDIC) or National Credit Union Share Insurance Fund
				  (NCUSIF), as appropriate;
(ii) not
				  deposits or other obligations of the financial institution and are not
				  guaranteed by the financial institution; and
(iii) subject to investment risks, including
				  possible loss of the principal invested; and
(B) make reasonable efforts to obtain from
				  each customer during the account-opening process a written acknowledgment of
				  the disclosures required by (A) of this paragraph;
(4) if broker-dealer services include any
				  written or oral representations concerning insurance coverage, other than
				  coverage through the FDIC or NCUSIF, clear and accurate written or oral
				  explanations of the coverage must also be provided to the customers when those
				  representations are first made;
(5)
				  each of the broker-dealer's confirmations and account statements must indicate
				  clearly that the broker-dealer services are provided by the
				  broker-dealer;
(6) recommendations
				  by a broker-dealer concerning non-deposit investment products with a name
				  similar to that of the financial institution must occur under a sales program
				  designed to minimize the risk of customer confusion;
(7) advertisements and sales literature that
				  announce the location of a financial institution where broker-dealer services
				  are provided by the broker-dealer, or that are distributed by the broker-dealer
				  on the premises of a financial institution, must disclose that securities
				  products are
(A) not insured by the FDIC or
				  NCUSIF, as appropriate;
(B) not
				  deposits or other obligations of the financial institution and are not
				  guaranteed by the financial institution; and
(C) subject to investment risks, including
				  possible loss of the principal invested;
(8) to comply with (7) of this subsection, a
				  broker-dealer may use the following shorter, logo format disclosures in
				  advertisements and sales literature, including material published, or designed
				  for use, in a radio or television broadcast or on the screen of an automated
				  teller machine, billboards, signs, posters, and brochures, if those disclosures
				  are displayed in a conspicuous manner:
(A)
				  "Not FDIC Insured," or "Not NCUSIF Insured," as appropriate;
(B) "No Bank Guarantee";
(C) "May Lose Value";
(9) if the omission of the disclosures
				  required by (7) of this subsection does not cause the advertisement or sales
				  literature to be misleading in the context in which the material is presented,
				  those disclosures are not required for messages contained in
(A) radio broadcasts of 30 seconds or
				  less;
(B) electronic signs,
				  including billboard-type signs that are electronic, time and temperature signs,
				  and ticker tape signs; for purposes of this subparagraph, electronic signs do
				  not include television, on-line computer services, or automated teller
				  machines; and
(C) signs, banners,
				  and posters if used only as location indicators;
(10) the broker-dealer must promptly notify
				  the financial institution if any agent of the broker-dealer who is employed by
				  the financial institution is terminated for cause by the
				  broker-dealer.