Ala. Admin. Code r. 830-X-3-.13

Current through Register Vol. 43, No. 1, October 31, 2024

Section 830-X-3-.13 - Supervision Of Associated Persons

(1) Every dealer, issuer or investment adviser, and officers, directors and partners thereof, shall exercise diligent supervision over all the securities activities of its associated persons.

(2) Every associated person of the dealer, issuer or investment adviser shall be subject to the supervision of a supervisor designated by such dealer, issuer or investment adviser. The supervisor may be a partner, officer, director, office manager, or any other qualified associated person, or in the case of a sole proprietorship, the sole proprietor.

(3) As part of its responsibility under this rule, every dealer, issuer or investment adviser shall establish, maintain and enforce written procedures, a copy of which shall be kept in each business office, which shall set forth the procedures adopted by the dealer, issuer or investment adviser to comply with the following duties imposed by this rule, and shall state at which business office or offices the dealer, issuer or investment adviser keeps and maintains the records required by Rules 830-X-3-.14 and 830-X-3-.16, as appropriate.

(a) The review and written approval by the designated supervisor of the opening of each new customer account;

(b) The frequent examination of all customer accounts to detect and prevent irregularities or abuses;

(c) The prompt review and written approval by the designated supervisor of all securities transactions by associated persons and all correspondence pertaining to the solicitation or execution of all securities transactions by associated persons;

(d) The review and written approval by the designated supervisor of the delegation by any customer of discretionary authority with respect to his account to a stated associated person or persons of the dealer, issuer or investment adviser and the prompt written approval by such designated supervisor of each discretionary order entered on behalf of that account; and

(e) The prompt review and written approval of the handling of all customer complaints.

(4) Every dealer, issuer or investment adviser who has designated more than one supervisor pursuant to paragraph (2) of this rule shall designate from among his partners, officers, directors or other qualified associated persons, a person or group of persons who shall:

(a) Supervise and periodically review the activities of the supervisors designated pursuant to paragraph (2) of this rule; and

(b) Periodically inspect each business office of the dealer, issuer or investment adviser to ensure that the written procedures are enforced.

Author:

Ala. Admin. Code r. 830-X-3-.13

Filed September 30, 1982. Readopted: Filed November 9, 1983. Amended: Filed September 28, 1990.

Formerly Rule No. 830-X-3-.18.

Statutory Authority:Code of Ala. 1975, § 8-6-23.