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 30-51.175 - Exclusion From Definition of Broker-Dealer

Current through Register Vol. 49, No. 14, July 15, 2024
PURPOSE: The commissioner is authorized by the
				  Missouri Securities Act of 2003 to create exceptions from the definition of
				  broker-dealer. This rule excludes from the definition certain credit unions
				  engaged in limited broker-dealer activities under a networking arrangement with
				  a registered broker-dealer.
(1) Networking Arrangements Between
				Broker-Dealers and Credit Unions. A credit union organized or chartered under
				the laws of the United States or under the laws of the state of Missouri, or
				that is organized or chartered under the laws of a state which has reciprocity
				with Missouri, is excluded from the definition of broker-dealer under section
				409.1-102(4)(E),
				RSMo if such credit union's broker-dealer activities are limited to those
				authorized in 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 credit
				union 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 credit
				union;
(C) Any materials used by
				the credit union 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 credit
				union;
(D) Any materials used by
				the credit union 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 credit union (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 credit union may forward customer
				funds or securities and may describe in general terms the types of investment
				vehicles available from the credit union and the broker-dealer under the
				arrangement;
(F) Employees of the
				credit union 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
				credit union may receive compensation for the referral of any customer if the
				compensation is a nominal one (1)-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 credit union does not carry a
				securities account of the customer; and
(I) The credit union or broker-dealer informs
				each customer that the brokerage services are provided by the broker-dealer and
				not by the credit union and that the securities are not deposits or other
				obligations of the credit union, are not guaranteed by the credit union, and
				are not insured by the Federal Deposit Insurance Corporation or the National
				Credit Union Administration.