D.C. Mun. Regs. tit. 26, r. 26-B151

Current through Register Vol. 71, No. 49, December 6, 2024

Rule 26-B151 - INTERNET COMMUNICATIONS

Investment advisers and investment adviser representatives who use the Internet to distribute information on available products and services through communications made on the Internet directed generally to anyone having access to the Internet, and transmitted through Internet communications shall not be considered to be transacting business "in the District" for purposes of the Act, provided that:

(a) The Internet communication contains a legend in which it is clearly stated that:

(1) the investment adviser or investment adviser representative in question may only transact business in this state if first licensed, excluded, or exempted from the District investment adviser or investment adviser representative licensing requirements; and

(2) follow-up, individualized responses to persons in this state by the investment adviser or investment adviser representative that involve either effecting or attempting to effect transactions in securities, or rendering of personalized investment advice for compensation, will not be made without compliance with the District investment adviser or investment adviser representative licensing requirements, or an applicable exemption or exclusion;

(b) The Internet communication contains a mechanism, which includes but is not limited to, technical "firewalls" or other implemented policies and procedures, designed reasonably to ensure that before any subsequent, direct communication with prospective customers or clients in the District, the investment adviser and investment adviser representative are first licensed in the District or qualify for an exemption or exclusion from the licensing requirement. Nothing in this paragraph shall be construed to relieve a District licensed investment adviser or investment adviser representative from any applicable securities licensing requirement in the District;

(c) The Internet communication is limited to the dissemination of general information on products and services and does not involve either effecting or attempting to effect transactions in securities, or rendering personalized investment advice for compensation in the District over the Internet; and

(d) In the case of an investment adviser representative:

(1) The affiliation of the investment adviser representative with the investment adviser is prominently disclosed within the Internet communication;

(2) The investment adviser with whom the investment adviser representative is associated retains responsibility for reviewing and approving the content of any Internet communication by an investment adviser representative;

(3) The investment adviser with whom the investment adviser representative is associated first authorizes the distribution of information on the particular products and services through the Internet communication; and

(4) In disseminating information through the Internet communication, the investment adviser representative acts within the scope of the authority granted by the investment adviser.

D.C. Mun. Regs. tit. 26, r. 26-B151

Final Rulemaking published at 40 DCR 6732 (September 24, 1993); as amended by Emergency Rulemaking published at 48 DCR 1987 (March 2, 2001) [EXPIRED]; as amended by Final Rulemaking published at 48 DCR 4106 (May 11, 2001)