Kentucky Administrative Regulations › Title 808 - PUBLIC PROTECTION CABINET - DEPARTMENT OF FINANCIAL INSTITUTIONS › Chapter 10 - Securities › Section 808 KAR 10:350 - Internet advertising

Current through Register Vol. 51, No. 1, July 1, 2024
RELATES TO:
				KRS
				292.320,
				292.330
NECESSITY, FUNCTION, AND CONFORMITY:
				KRS
				292.500(3) authorizes the
				commissioner to promulgate administrative regulations necessary to carry out
				the provisions of KRS Chapter 292.
				KRS
				292.330 requires a person to be registered or
				exempt from registration before transacting business involving a security in
				Kentucky. This administrative regulation establishes requirements governing the
				use of the Internet to distribute information on an available product or
				service by securities industry personnel.
Section
			 1. Securities industry personnel, including a broker-dealer,
			 investment adviser, broker-dealer agent, or investment adviser representative,
			 shall not be subject to the registration requirements established in
			 KRS
			 292.330 for using the Internet to distribute
			 information on an available product or service if:
(1) The Internet communication contains a
			 legend clearly stating that the securities industry personnel in question may
			 only transact business in those states where they are registered or otherwise
			 excluded or exempted from state registration requirements;
(2) The Internet communication contains a
			 mechanism which reasonably ensures that any subsequent interaction between
			 prospective customers or clients residing in states where the securities
			 industry personnel are not registered is limited so as to not trigger state
			 registration or licensing requirements or securities registration requirements.
			 State registered securities industry personnel shall not be relieved from their
			 obligation to observe applicable securities registration requirements in any
			 state in which they transact business;
(3) The Internet communication:
(a) Does not involve the actual offering of
			 securities trades, or the rendering of personalized investment advice for
			 compensation over the Internet; and
(b) Is limited to the dissemination of
			 information on a product or service; and
(4) In case of a broker-dealer agent or
			 investment adviser representative:
(a) The
			 agent's or investment adviser representative's affiliation with the
			 broker-dealer or investment adviser is prominently disclosed within the
			 Internet communication;
(b) The
			 broker-dealer or investment adviser with whom the agent or investment adviser
			 representative is associated retains responsibility for reviewing and approving
			 the content of the agent's or investment adviser representative's Internet
			 communication;
(c) The
			 broker-dealer or investment adviser with whom the agent or investment adviser
			 representative is associated authorizes the agent's or representative's
			 Internet distribution of information on the particular product or service
			 and
(d) In disseminating
			 information on the Internet, the agents or investment adviser representatives
			 are acting within the scope of their authority with the broker-dealer or
			 investment adviser.