West Virginia Code of State Rules › Agency 111 - Securities Commission › Title 111 - LEGISLATIVE RULES SECURITIES COMMISSIONER › Series 111-01 - Security Rules And Regulations › Section 111-1-12 - Post registration provisions

Current through Register Vol. XLI, No. 28, July 12, 2024
Each of the rules in this section (12 through 12.2) is a
				  legislative rule, and each is adopted pursuant to the provisions of section
				  four hundred twelve, article four, chapter thirty-two of the Code and sections
				  two hundred one, two hundred two, two hundred three and two hundred four,
				  article two, chapter thirty-two of the the Code, and each rule relates to
				  sections two hundred one, two hundred two, two hundred three and two hundred
				  four, article two, chapter thirty-two of the Code.
12.1. Record keeping requirements.
(a)
(1) A
				broker-dealer shall comply with SEC Rules 15c1-4 (confirmation of transactions,
				17 CFR 240.15c1 - 4 ), 17a-3 (records to be made by certain exchange members,
				brokers and dealers,
				17
				CFR 240.17a-3 ) and 17a-4 (records to be
				preserved by certain exchange members, brokers and dealers,
				17
				CFR 240.17a-4 ).
(2) A broker-dealer shall immediately
				telegraph or otherwise expeditiously notify in writing the Commissioner of the
				theft or mysterious disappearance of any securities or funds from any of its
				offices, setting forth all material facts known to him concerning the theft or
				disappearance.
(3) An issuer-agent
				(other than one employed by or associated with an issuer registered pursuant to
				the Investment Company Act of 1940) registered pursuant to the Code shall make,
				keep and preserve for a period not less than three (3) years, books and records
				containing the following information:
(A)
				Copies of all writing confirming the sale or purchase of securities;
(B) The date and amount of each cash receipt
				or disbursement associated with such sale or purchase of securities;
(C) The number of shares involved, their
				certificate numbers and the date they were delivered to or received from the
				investor.
(4) An
				issuer-agent (other than one employed by or associated with an issuer
				registered under the Investment Company Act of 1940) shall notify a customer in
				writing at or before completion of each purchase or sale of a security, and a
				debit or a credit for securities, case and other items in the account of
				others. The notice shall state:
(A) The
				identity and price of the security,
(B) the account for which entered,
(C) the date of execution,
(D) the name of the agent handling the
				transaction, and
(E) the fact that
				the transaction was unsolicited, if so.
(5) An issuer-agent employed by or associated
				with an issuer registered under the Investment Company Act of 1940 shall comply
				with SEC Rules 270.31a-1 (Records to be maintained by registered investment
				companies,
				17
				CFR 270.31a-1 ),270.31a-2 (Records to be
				preserved by registered investment companies,
				17 CFR
				270.3a-2 ) and 270.31a-3 (Records prepared or
				maintained by others,
				17
				CFR 270.31a-3 ). The issuer's compliance with
				the rules shall be deemed compliance by such issuer-agent.
(6) The person responsible for the day-to-day
				operation of an office of a broker-dealer in this state must be either the
				broker-dealer himself (in case of proprietorship), an officer of the
				broker-dealer or a registered agent of the broker-dealer.
(7) Complaint file. -- Every broker-dealer
				shall maintain a file which shall contain all investor complaints and legal
				actions against the firm by West Virginia residents, or against the firm's
				agents registered in West Virginia. It shall also include any legal or
				administrative action against the firm or any of its agents taken by a state or
				federal agency or self-regulatory organization. The file shall be maintained in
				the West Virginia branch office where the complaint applies, as well as the
				home office of the broker-dealer.
(8) Market maker records. -- Any
				broker-dealer which makes a market in a security shall maintain and preserve
				for a period of at least five (5) years, the following:
(A) Proof in its files that it is lawful for
				the broker-dealer to, in fact, make a market in such securities, i.e., the
				securities are either registered or exempt from registration under chapter
				thirty-two of the Code, and applicable federal law.
(B) Information which he reasonably believes
				is true and correct and reasonably current, and which was obtained by him from
				sources which he reasonably believes are reliable. This information shall be
				available upon request to any person expressing an interest in a proposed
				transaction in the security with the broker-dealer. The information shall
				include:
(1) The exact name of the issuer and
				its predecessor (if any);
(2) The
				address of the issuer's principal executive offices;
(3) The state of incorporation, if it is a
				corporation;
(4) The exact title
				and class of the security;
(5) The
				par or stated value of the security;
(6) The number of shares or total amount of
				the securities outstanding as of the end of the issuer's fiscal year;
(7) The name and address of the transfer
				agent;
(8) The nature of products
				or services offered;
(9) The nature
				and extent of the issuer's facilities;
(10) The name of the chief executive officer
				and members of the Board of Directors;
(11) The issuer's most recent balance sheet,
				profit and loss and the retained earnings statement;
(12) Similar financial information for such
				part of the two (2) preceding fiscal years as the issuer or its predecessor has
				been in existence; and
(13) Whether
				the broker-dealer or any associates persons are affiliated, directly or
				indirectly, with the issuer.
(C) The term "market maker" shall mean a
				broker-dealer who, with respect to the particular type of security:
(1) Regularly publishes bona fide competitive
				bid and offer quotations in a recognized interdealer quotation system or
				regularly furnishes bona fide competitive bid and offer quotations to other
				broker-dealers on request; and
(2)
				is ready, willing and able to effect transactions in reasonable quantities at
				his quoted price with other broker-dealers on a regular basis.