02-029 C.M.R. ch. 129, § 8 - Third party broker-dealer failure to supervise defined

For purposes of 32 M.R.S.A. §16412(4)(I), it is a failure reasonably to supervise an agent for a broker-dealer to allow the agent to effect purchases or sales of securities on behalf of the broker-dealer with customers of a financial institution authorized to do business in this State, without adopting and furnishing the agent with written guidelines for engaging in such activity, and maintaining supervisory procedures adequate for ensuring that the guidelines are followed. Those guidelines shall, at minimum, instruct the agent on the steps to be taken to ensure that the purchasers of securities understand the differences between securities and a federally insured deposit, and that only suitable transactions are effected.

Notes

02-029 C.M.R. ch. 129, § 8