Or. Admin. Code § 441-205-0135 - Sales of Securities or Investment Advisory Services at Financial Institutions or Trust Companies

(1) This rule applies exclusively to securities sales activity conducted by a broker-dealer or salesperson, and to investment advisory services conducted by an investment adviser or investment adviser representative, on the premises of a financial institution or trust company as defined in ORS 706.008 and the premises of any Oregon-based service corporation of a financial institution or trust company. This rule does not alter or eliminate the obligations of a securities licensee to comply with all other securities laws and rules.

(2) A broker-dealer, salesperson, investment adviser or investment adviser representative shall not conduct securities sales or advisory activities on the premises of a financial institution or trust company unless the licensee complies initially and continuously with the following requirements:

(a) The activities shall be conducted, wherever practical, in a physical location distinct from the areas where the financial institution's or trust company's activities are conducted;

(b) The securities sales or advisory activities shall be identified in a manner that is clearly distinguished from the financial institution's or trust company's activities, including clearly displaying the name of the licensed firm conducting the securities activities;

(c) Contractual or other arrangements between the financial institution or trust company and licensee must be governed by a written agreement that sets forth:

(A) The responsibilities of the parties;

(B) The compensation arrangements;

(C) That a qualified securities supervisor will properly supervise the activities of the salesperson or investment adviser representative; and

(D) A requirement that securities regulators be permitted access during normal business hours to the area of the premises where securities sales or advisory activities are conducted and records are kept for purposes of routine or for-cause examinations or investigations of the securities sales or advisory activities;

(d) At or before a salesperson or investment adviser representative opens a customer account, the licensee shall:

(A) Disclose, both orally and in writing, that the securities products or services offered:

(i) Are not insured by the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Association (NCUA), as applicable;

(ii) Are not deposits or other obligations of the financial institution or trust company;

(iii) Are not guaranteed by the financial institution or trust company; and

(iv) Are subject to investment risks, including possible loss of any principal that is invested;

(B) Obtain a written acknowledgment of receipt of the disclosures required by paragraph (2)(d)(A) of this rule from each customer during the account opening process; and

(C) Provide clear and accurate explanations of coverage including a clear and accurate description of any guarantee provided with the insurance, if making any written or oral representations concerning insurance coverage other than FDIC or NCUA insurance;

(e) All confirmations and account statements provided to customers must clearly indicate that the services are provided by the broker-dealer or investment adviser, as applicable;

(f) Except as permitted in subsections (2)(g) and (2)(h) of this rule, the disclosures described in paragraph (2)(d)(A) of this rule must be incorporated into:

(A) Advertisements and sales literature that announce the location of a financial institution where broker-dealer or investment advisory services are provided;

(B) Advertisements and sales literature distributed by or for the regulated person on the premises of a financial institution or trust company; and

(C) Correspondence, including electronic mail, with a current or potential customer;

(g) A broker-dealer or investment adviser may use the following shorter logo format disclosures in advertisements, sales literature, and written communications, including material published or designed for use in radio or television broadcasts, ATM screens, billboards, signs, posters and brochures, provided that the applicable disclosures are displayed in a conspicuous manner:

(A) Not FDIC or NCUA Insured;

(B) No Bank or Credit Union Guarantee;

(C) May Lose Value;

(h) As long as the omission of the disclosures required by paragraph (2)(d)(A) of this rule would not cause the advertisement or sales literature to be misleading in light of the context in which the material is presented, the broker-dealer or investment adviser is not required to provide disclosures for the following:

(A) Radio broadcasts of 30 seconds or less;

(B) Electronic billboard-type time and temperature, or ticker tape signs; and

(C) Signs such as banners and posters when used only as location indicators;

(i) Recommendations by a regulated person concerning nondeposit investment products with a name similar to that of a financial institution or trust company may occur only pursuant to policies and procedures reasonably designed to minimize risk of customer confusion.

(3) The broker-dealer or investment adviser must promptly notify the financial institution or trust company of the termination of a salesperson or investment adviser representative conducting securities sales or investment advisory activities on the premises of the financial institution or trust company, and the reason for the termination.

Notes

Or. Admin. Code § 441-205-0135

FCS 4-2007, f. 10-11-07, cert. ef. 1-1-08

Stat. Auth.: ORS 59.285

Stats. Implemented: ORS 59.135, 59.195, 59.205