230 R.I. Code R. 230-RICR-50-05-1.7

Current through November 7, 2024

Section 230-RICR-50-05-1.7 - Exemption of Certain Broker-Dealers, Investment Advisers, and Sales Representatives Using the Internet for General Dissemination of Information on Products and Services

A. The following broker-dealers, investment advisers, broker-dealer sales representatives and investment adviser representatives (as those terms are defined in R.I. Gen. Laws § 7-11-101(1) (11),(12) and (20)) who use the Internet to distribute information on available products and services through certain communications made on the Internet directed generally to anyone having access to the Internet, and transmitted through postings on Bulletin Boards, displays on "Home Pages" or similar methods (hereinafter "Internet Communications") shall not be deemed as "transacting business" in this state for the purposes of R.I. Gen. Laws §§ 7-11-201 and 7-11-203 if the all following conditions are observed:

1. The Internet Communication does not involve either affecting or attempting to affect transactions in securities, or the rendering of personalized investment advice for compensation, but is limited to the dissemination of general information on products and services;

2. The Internet Communication indicates, either directly or indirectly, that the Representatives' services are not being offered to residents of the State of Rhode Island;

3. The Internet Communication is not otherwise directed to any person in Rhode Island by or on behalf of the Representatives;

4. No services are rendered by Representatives in Rhode Island until they are duly licensed under R.I. Gen. Laws §§ 7-11-201, 7-11-203; or exempt from licensing under R.I. Gen. Laws §§ 7-11-202, 7-11-204;

5. Follow-up, individualized responses to persons in Rhode Island by such Representatives that involve either the affecting or attempting to affect transactions in securities, or the rendering of personalized investment advice for compensation, as may be, will not be made absent compliance with state broker-dealer, investment adviser, or Representatives registration requirements, or an applicable exemption or exclusion;

6. The Internet Communication contains a mechanism, including and without limitation, technical "firewalls" or other implemented policies and procedures, designed reasonably to ensure that prior to any direct communication with prospective customers or clients in this state, said broker-dealer, investment adviser, or Representative is first registered in Rhode Island or qualifies for an exemption or exclusion form such requirement. Nothing in this paragraph shall be construed to relieve a state registered broker-dealer, investment adviser, or Representative from any applicable securities registration requirement in Rhode Island; and

B. In the case of Representatives:

1. The identities of the Representatives are prominently disclosed within the Internet Communication;

2. The broker-dealer or investment adviser with whom the Representatives are associated retains the responsibility for reviewing and approving the content of any Internet Communication by its Representatives;

3. The broker-dealer or investment adviser with whom the Representatives are associated first authorized the distribution of information on the particular products and services through the Internet Communication; and

4. In disseminating information through the Internet Communication, the Representatives act within the scope of the authority granted by the broker-dealer or investment adviser.

C. Reliance on any exemption from registration under this Part does not preclude a Representative from relying on any other exemption provided under the Rhode Island General Laws or this Part.

230 R.I. Code R. 230-RICR-50-05-1.7