69W-200.001: Definitions
PURPOSE AND EFFECT: Chapter 2006-213, Laws of Florida, contains amendments to Chapter 517, Florida Statutes, relating to the Florida Securities and Investors Protection Act. This law contains a number of provisions relating to the licensing and regulatory functions of the Office of Financial Regulation. Among other things, the law amends provisions concerning licensing, notice filings, and other regulatory provisions in the area of securities regulation. The proposed rules implement and reflect the statutory changes. In particular, Rule 69W-200.001, F.A.C., is being amended to re-define the term “branch office” and specify exceptions to the definition.
SUBJECT AREA TO BE ADDRESSED: Florida Securities and Investors Protection Act.
SPECIFIC AUTHORITY: 517.03(1) FS.
LAW IMPLEMENTED: 517.07, 517.12, 517.021, 517.061, 517.051, 517.081, 517.161 FS.
IF REQUESTED IN WRITING AND NOT DEEMED UNNECESSARY BY THE AGENCY HEAD, A RULE DEVELOPMENT WORKSHOP WILL BE NOTICED IN THE NEXT AVAILABLE FLORIDA ADMINISTRATIVE WEEKLY.
THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE DEVELOPMENT AND A COPY OF THE PRELIMINARY DRAFT, IF AVAILABLE, IS: Pam Epting, Bureau Chief, Office of Financial Regulation, 200 East Gaines Street, 6th Floor, The Fletcher Building, Tallahassee, Florida 32399-0375, (850)410-9805
THE PRELIMINARY TEXT OF THE PROPOSED RULE DEVELOPMENT IS:
69W-200.001 Definitions.
As used in the Rules and Regulations of the Financial Services Commission and Office of Financial Regulation, pursuant to Chapter 517, F.S., unless the context otherwise specifically requires:
(1) through (8) No change.
(9)(a) Except as otherwise provided in this subsection, the term “Branch Office” shall mean any location in this state of a dealer or investment adviser at which one or more associated persons regularly conduct the business of rendering investment advice or effecting any transactions in, or inducing or attempting to induce the purchase or sale of, any security or any location that is held out as such. Pursuant to Section 517.021(4), F.S., the Financial Services Commission may adopt exceptions to this definition. The following locations shall not be deemed branch offices for purposes of Section 517.12(5), F.S., and are considered exceptions to the definition of a branch office under Section 517.021(4), F.S.:
1. Any location that is established solely for customer service or back office type functions where no sales activities are conducted and that is not held out to the public as a branch office;
2. Any location that is the associated person’s primary residence; provided that:
a. Only one associated person, or multiple associated persons, who reside at that location and are members of the same immediate family, conduct business at the location;
b. The location is not held out to the public as an office and the associated person does not meet with customers at the location;
c. Neither customer funds nor securities are handled at that location;
d. The associated person is assigned to a designated branch office, and such designated branch office is reflected on all business cards, stationery, advertisements and other communications to the public by such associated person;
e. The associated person’s correspondence and communications with the public are subject to the firm’s supervision in accordance with NASD Rule 3010, as incorporated in subparagraph 69W-600.013(1)(h)1., F.A.C.;
f. Electronic communications (e.g., e-mail) are made through the registrant’s electronic system;
g. All orders are entered through the designated branch office or an electronic system established by the registrant that is reviewable at the branch office;
h. Written supervisory procedures pertaining to supervision of sales activities conducted at the residence are maintained by the registrant; and
i. A list of the residence locations is maintained by the registrant;
3. Any location, other than a primary residence, that is used for securities business for less than 30 business days in any one calendar year, provided the registrant complies with the provisions of this rule in sub-subparagraphs 9(a)2.a. through i. above;
4. Any office of convenience, where associated persons occasionally and exclusively by appointment meet with customers, which is not held out to the public as an office;
5. Any location that is used primarily to engage in non-securities activities and from which the associated person(s) effects no more than 25 securities transactions in any one calendar year; provided that any advertisement or sales literature identifying such location also sets forth the address and telephone number of the location from which the associated person(s) conducting business at the non-branch locations are directly supervised;
6. The Floor of a registered national securities exchange where a registrant conducts a direct access business with public customers; or
7. A temporary location established in response to the implementation of a business continuity plan.
8. The main office of an investment adviser registered with the Office of Financial Regulation pursuant to Section 517.12(4), F.S.
(b) Notwithstanding the exclusions provided in subparagraph (9)(a)2. above, any location that is responsible for supervising the activities of persons associated with the registrant at one or more non-branch locations of the registrant is considered to be a branch office.
(c) The term “business day” as used in NASD Rule 3010(g)(2)(A), which is incorporated by reference in subparagraph 69W-600.013(1)(h)1., F.A.C., shall not include any partial business day provided that the associated person spends at least four hours on such business day at his or her designated branch office during the hours that such office is normally open for business.
(9)(a) Except as otherwise provided herein, the term “Branch Office” shall mean any location in
1. Which is owned or controlled by a dealer or investment adviser for purposes of offering for sale or selling securities or for rendering investment advice and in which two or more associated persons are engaged in such activities. “Control” as used herein and in Section 517.021(4), F.S., shall be presumed from the fact that such location is used by associated persons of a dealer or investment adviser to conduct business on behalf of such dealer or investment adviser;
2. Which is listed in any publication, including a professional digest or telephone directory, or advertised in any media as an office of a dealer or investment adviser; or
3. Which is designated with the Securities and Exchange Commission or with a securities exchange or self-regulatory organization as a branch office of a dealer or investment adviser.
(b) The following locations shall not be deemed branch offices for purposes of Section 517.12(5), F.S.
1. Locations used temporarily for the purposes of conducting seminars or distributing printed information;
2. The home of a client;
3. A public location, such as a restaurant, which is occasionally used by a registered associated person to conduct business on behalf of the dealer or the investment adviser provided the location is not held out to the investing public as an office of the dealer or investment adviser; or
4. Any location defined as a branch office in paragraph (9)(a) of this rule from which an associated person registered with a dealer and one or more investment advisers registered with the Office of Financial Regulation conducts business on behalf of said multiple entities provided that such location is lawfully registered with the Office of Financial Regulation as a branch office of at least one of said entities.
(10) through (33) No change.
Specific Authority 517.03(1) FS. Law Implemented 517.07, 517.12, 517.021, 517.061, 517.051, 517.081, 517.161 FS. History–New 12-5-79, Amended 9-20-82, Formerly 3E-200.01, Amended 12-8-87, 10-14-90, 7-31-91, 6-16-92, 1-10-93, 5-5-94, 10-20-97, 8-9-98, 8-19-99, 10-30-03, Formerly 3E-200.001, Amended_________.