Code of Maine Rules › 02 - DEPARTMENT OF PROFESSIONAL AND FINANCIAL REGULATION › 032 - OFFICE OF SECURITIES › Chapter 504 - BROKER-DEALER AND AGENT LICENSING › Section 032-504-7 - Reasonable supervision

Current through 2024-29, July 17, 2024
In determining whether a person has failed to reasonably
				  supervise an agent or other individual under Section 16412(4)(I) of the Act,
				  the Administrator shall consider among other things whether the broker-dealer
				  in question has met the requirements described in this section.
1.
Supervisory system
. Each
				broker-dealer shall establish, maintain and enforce a system for supervising
				the activities of its agents and other persons subject to its supervision and
				for supervising the operations of each Maine office. The system shall be
				reasonably designed to achieve compliance with applicable securities laws and
				regulations and shall provide, at a minimum, for the following:
A. The establishment, implementation and
				maintenance of written supervisory procedures in accordance with Subsection
				2 below;
B. The designation of one or more principals
				or managers with authority to carry out the supervisory responsibilities of the
				broker-dealer for each type of business in which it engages and for which
				broker-dealer licensing is required;
C. For each branch office and for its
				principal place of business, if located in Maine, the designation of one or
				more principals or managers who have authority to carry out the supervisory
				responsibilities assigned to that location by the broker-dealer, and who shall
				be located in such office unless the broker-dealer has implemented a system of
				adequate supervisory controls over its branch office operations, designed to
				ensure a level of oversight comparable to that which would have existed had the
				designated supervisors been located in their assigned offices. A system of
				adequate supervisory controls may include, without limitation:
(1) a computerized tracking system through
				which the broker-dealer monitors trading, handling of funds, new accounts,
				registration status, exceptions, outside business activity, selling away,
				customer complaints, and other branch office activity;
(2) the monitoring and surveillance of
				internal and external communications to and from branch office
				locations;
(3) the designation of
				regional managers; and
(4) frequent
				visits to the location by an off-site manager.
D. The assignment of each agent to a
				principal or manager who shall be responsible for supervising the activities of
				that agent;
E. Reasonable efforts
				to determine that all supervisory personnel are qualified by virtue of
				experience or training to carry out their assigned responsibilities;
				and
F. The participation by each
				agent, either individually or collectively, no less than annually, in
				interviews or meetings conducted by persons designated by the broker-dealer, at
				which compliance matters relevant to the activities of the agent(s) are
				discussed. The meetings or interviews may occur in conjunction with a
				discussion of other matters and may be conducted at a central or regional
				location or at the agent's place of business.