15 CSR 30-59.190 - Disclosure Statements

PURPOSE: This rule requires broker-dealers or sales representatives to furnish the customer disclosure regarding the commodity and the broker-dealer company.

(1) Broker-dealers or sales representatives must furnish to each customer purchasing commodities, no later than the date of confirmation of the transaction, a disclosure statement, which must set forth all of the information as follows:

(A) Risk factors including a statement regarding the stability of the specific commodity market and competition in this type of business;

(B) Explanation of the specific commodity market including place where trades are made and whether market was created or controlled by the broker-dealer company;

(C) Explanation of the broker-dealer company organizational structure including the names of officers, directors and affiliates of the broker-dealer company;

(D) Explanation of the broker-dealer's longevity of operation in the commodities business and the name of the state under the laws of which it was organized;

(E) Statement setting forth the capitalization of the broker-dealer company; and

(F) Description of any pending material litigation or administrative proceedings that involve the broker-dealer company or its officers, directors or affiliates. Include similar information as to any such proceedings known to be contemplated by governmental authorities.

(2) A copy of a disclosure statement (schedules of Form BD, see 15 CSR 30-51.020 ) must accompany each renewal application (Form BD, see 15 CSR 30-51.020 ) of broker-dealers filed under 15 CSR30-59.070(1)(B) and 15 CSR 30-59.170(4).

Notes

15 CSR 30-59.190

AUTHORITY: sections 409.810, 409.818 and 409.836, RSMo 1986.* This rule was previously filed as 15 CSR 30-60.140. 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: 409.810, RSMo 1985; 409.818, RSMo 1985; and 409.836, RSMo 1985.