15 CSR 30-59.120 - Bonds

PURPOSE: This rule prescribes surety bonding requirements for registered broker-dealers and sales representatives and fidelity bonding requirements for registered broker-dealers.

(1) Every registered broker-dealer shall post surety bond on Form C-4 (see 15 CSR 30-59.040 ) in the amount of twenty thousand dollars ($20,000), except that no such bond is required of any broker-dealer whose net capital exceeds two hundred thousand dollars ($200,000).

(2) Every registered sales representative of a broker-dealer shall post security (surety) bond on Form C-4 in the amount of five thousand dollars ($5,000), except that no such bond is required of any sales representative of a registered broker-dealer whose net capital exceeds two hundred thousand dollars ($200,000).

(3) Employees and officers of every registered broker-dealer shall be covered by a fidelity bond in the following minimum amounts: Less than six (6) individuals covered fifty thousand dollars ($50,000); more than five (5) and less than eleven (11) individuals covered seventy-five thousand dollars ($75,000); more than ten (10) persons one hundred twenty-five thousand dollars ($125,000). The coverage provided shall be under a Brokers Blanket Bond Standard Form 14 or its equivalent. Individual broad coverage commercial bonds may be carried when the total number of individuals covered is less than six (6). Any fidelity bond coverage meeting the requirements of the American Stock Exchange, the Boston Stock Exchange, the Midwest Stock Exchange, Inc., the New York Stock Exchange, Inc., the Pacific Stock Exchange, Inc., the PBW Stock Exchange, Inc. or the Chicago Board Options Exchange, Inc. shall be deemed in compliance. Authenticated copies of fidelity bonds shall be filed with the commissioner.

(4) Every insurer shall agree to notify the commissioner, in writing, at least thirty (30) days prior to any cancellation.

(5) All bonds, other than those secured by cash or securities, shall be executed by a corporate surety approved and authorized to do business in Missouri by the director of insurance. If any bond is executed by an attorney-in-fact, a true and authenticated copy of his/her authority shall be attached to the bond.

Notes

15 CSR 30-59.120

AUTHORITY: section 409.858(4), RSMo 1986.* This rule was previously filed as 15 CSR 30-6.070. Emergency rule filed Oct. 2, 1985, effective Oct. 12, 1985, expired Feb. 9, 1986. Original rule filed Aug. 22, 1986, effective Jan. 30, 1987.

*Original authority: 409.858, RSMo 1985.