Missouri Code of State Regulations › Title 15 - ELECTED OFFICIALS › Division 30 - Secretary of State › Chapter 51 - Broker-Dealers, Agents, Investment Advisers, and Investment Adviser Representatives › Section 15 CSR 30-51.165 - Networking Arrangements Between Broker-Dealers and Banks, Trust Companies or Savings Institutions

Current through Register Vol. 49, No. 14, July 15, 2024
PURPOSE: This rule prescribes the activities in which
				  a bank, a trust company organized or chartered under the laws of Missouri, or
				  savings institution may engage in under a networking arrangement and be
				  excepted from the definition of broker-dealer under the Missouri Securities Act
				  of 2003.
(1) Definition. For
				purposes of this rule, the reference to the term "banking institution" shall
				mean a bank, trust company organized or chartered under the laws of Missouri,
				or a savings institution.
(2)
				Exception from the Definition of Broker-Dealer. A banking institution shall be
				excepted from the definition of broker-dealer under section
				409.1-102(4), RSMo if
				such banking institution enters into a contractual or other written arrangement
				with a broker-dealer registered under the Missouri Securities Act of 2003
				whereupon the broker-dealer offers brokerage services on or off the premises of
				the banking institution and-
(A) Such
				broker-dealer is clearly identified as the person performing the brokerage
				services;
(B) The broker-dealer
				performs brokerage services in an area that is clearly marked and, to the
				extent practicable, physically separate from the routine deposit-taking
				activities of the banking institution;
(C) Any materials used by the banking
				institution to advertise or promote generally the availability of brokerage
				services under the arrangement clearly indicate that the brokerage services are
				being provided by the broker-dealer and not by the banking
				institution;
(D) Any materials used
				by the banking institution to advertise or promote generally the availability
				of brokerage services under the arrangement are in compliance with Missouri and
				federal securities laws before distribution;
(E) Employees of the banking institution
				(other than agents of a broker-dealer who are registered under the Missouri
				Securities Act of 2003 and qualified pursuant to the rules of a self-regulatory
				organization) perform only clerical or ministerial functions in connection with
				brokerage transactions including scheduling appointments with the agents of a
				broker-dealer, except that employees of a banking institution may forward
				customer funds or securities and may describe in general terms the types of
				investment vehicles available from the banking institution and the
				broker-dealer under the arrangement;
(F) Employees of the banking institution do
				not receive incentive compensation for any brokerage transaction unless such
				employees are agents of a broker-dealer, are registered under the Missouri
				Securities Act of 2003 and are qualified pursuant to the rules of a
				self-regulatory organization, except that the employees of the banking
				institution may receive compensation for the referral of any customer if the
				compensation is a nominal one-time cash fee of a fixed dollar amount and the
				payment of the fee is not contingent on whether the referral results in a
				transaction;
(G) Such services are
				provided by the broker-dealer on a basis in which all customers that receive
				any services are fully disclosed to the broker-dealer;
(H) The banking institution does not carry a
				securities account of the customer except as permitted under sections
				3(a)(4)(B)(ii) (trust activities) or 3(a)(4)(B)(viii) (safekeeping and custody
				activities) of the Securities Exchange Act of 1934; and
(I) The banking institution or broker-dealer
				informs each customer that the brokerage services are provided by the
				broker-dealer and not by the banking institution and that the securities are
				not deposits or other obligations of the banking institution, are not
				guaranteed by the banking institution, and are not insured by the Federal
				Deposit Insurance Corporation.