157739, 69W-600.013 - Florida Administrative Rules, Law, Code, Register

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Florida Department of State and Division of Library and Information Services

Notice: 157739

Notice of Proposed Rule

Department:

DEPARTMENT OF FINANCIAL SERVICES

Division:

Securities

Chapter:

REGISTRATION OF DEALERS, INVESTMENT ADVISERS, ASSOCIATED PERSONS

Overview

RULE:

69W-600.013

Prohibited Business Practices for Dealers and Their Associated Persons

PURPOSE:

On August 29, 2003, the Securities and Exchange Commission (SEC) approved the adoption of Rule 2370 of the National Association of Securities Dealers (“NASD”), which prohibited registered persons from borrowing money from or lending money to a customer unless certain criteria were met. The NASD subsequently adopted amendments to NASD Rule 2370, which were approved by the SEC on February 18, 2004. Rule 69W-600.013, F.A.C., is being amended to allow registered persons to borrow from or lend to customers under certain conditions. These rule amendments are based on NASD Rule 2370. Rule 69W-600.13 is also being amended to reflect that a violation of Regulation SHO, as adopted by the SEC under the Securities and Exchange Act of 1934, is a prohibited business practice. The rule is also being amended to update references to applicable SEC and self-regulatory rules adopted by reference.

SUMMARY:

Rules governing lending arrangements of funds between registered persons of dealers and customers have been promulgated at the national level by the NASD. The rule proposed by the Office is based on the amended NASD Rule 2370, which has been approved by the Securities and Exchange Commission. This rule amendment exempts some lending arrangements involving a registered person of a broker dealer and a customer from being a prohibited business practice. The rule is also being amended to reflect that a violation of Regulation SHO, as adopted by the SEC under the Securities and Exchange Act of 1934, is a prohibited business practice.

RULEMAKING AUTHORITY:

517.03(1) FS., 517.081 FS., 517.1217 FS.

LAW:

517.12(1) FS., 517.081 FS., 517.1217 FS., 517.161(1) FS.

PRINT PUBLISH DATE:

2/24/2006 Vol. 32/08

COMMENTS:

From 2/24/2006 To 3/17/2006 (21 Days)
The public comment period for this notice has already expired.

REFERENCE MATERIALS:

No reference(s).

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