Section 36b-31-6f - Supervision requirements(a) As used in this section, "manager" means (1) any person who supervises agents or investment adviser agents, as the case may be, either directly or indirectly or (2) any person responsible for the day-to-day operation and supervision of a broker-dealer or investment adviser office located in this state.(b) Each registered broker-dealer and investment adviser shall establish, enforce and maintain a system for supervising the activities of its agents, investment adviser agents and Connecticut office operations that is reasonably designed to achieve compliance with applicable securities laws and regulations.(c) The supervisory system shall provide, at a minimum, for the following: (1) The establishment, implementation and maintenance of written supervisory procedures in accordance with subsection (f) of this section;(2) The designation of a manager with authority to carry out the supervisory responsibilities of the broker-dealer or investment adviser for each type of business in which it engages and for which broker-dealer or investment adviser registration is required;(3) For each Connecticut branch office and principal place of business, the designation of a manager who shall be responsible for its day-to-day operation and supervision and, unless otherwise allowed by the commissioner under subsection (d) of this section, who shall be located on the premises of such office on a full time basis;(4) The assignment of each agent or investment adviser agent to a manager who shall be responsible for supervising the activities of such agent or investment adviser agent;(5) Reasonable efforts to determine that all supervisory personnel are qualified by virtue of experience or training to carry out their assigned responsibilities; and(6) The participation by each agent or investment adviser agent, either individually or collectively and no less than annually, in an interview or meeting conducted by persons designated by the broker-dealer or investment adviser at which interview or meeting compliance matters relevant to the activities of the agent or investment adviser agent shall be discussed. The meeting or interview may occur in conjunction with a discussion of other matters and may be conducted at a central or regional location or at the agent's or investment adviser agent's place of business.(d)(1) Notwithstanding the requirements of subsection (c) (3) of this section, the commissioner may, in writing, allow no more than three Connecticut branch offices of a broker-dealer to be supervised by one designated manager, provided that such manager is employed in Connecticut on a full time basis. In making such a determination, the commissioner shall consider all relevant factors, including: (A) The number of agents located at each branch office to be supervised by the designated manager; (B) the nature and variety of securities products offered or sold from each such branch office; (C) the number of customer accounts at each such branch office; (D) the daily volume of securities transactions initiated at each such branch office; (E) the adequacy of the broker-dealer's existing or proposed supervisory system and procedures; and (F) the broker-dealer's disciplinary history and the disciplinary history of the agents located at each such branch office.(2) Any approval by the commissioner under this subsection is subject to immediate revocation if the commissioner determines that there has been a material change in any factor forming a basis for such approval.(3) Nothing in this subsection limits the commissioner's further authority under section 36b-31-31 c of the regulations.(e) Each broker-dealer and investment adviser shall designate one or more managers who shall review the supervisory system, procedures and inspections implemented by the broker-dealer or investment adviser and take or recommend to senior management appropriate action reasonably designed to achieve compliance with the Act and sections 36b-31-2 to 36b-31-33 of the regulations.(f)(1) Written supervisory procedures shall set forth the supervisory system established by the broker-dealer or investment adviser pursuant to this section, and shall include the titles, registration status and locations of required supervisory personnel as well as the responsibilities of each supervisory person as they relate to the type of business in which the broker-dealer or investment adviser is engaged. The broker-dealer or investment adviser shall maintain, on an internal record, the names of all persons designated as supervisory personnel and the dates on which such designation is or was effective. (2) Written supervisory procedures shall take into consideration the following factors: (A) Whether agents or investment adviser agents at the location engage in retail sales or other activities involving regular contact with public customers or clients; (B) whether a substantial number of agents or investment adviser agents conduct activities at, or are otherwise supervised from, the location; (C) whether the agents or investment adviser agents are geographically dispersed; and (D) whether the securities or advisory activities are diverse, complex, or both. (3) Each broker-dealer or investment adviser shall amend its written supervisory procedures as appropriate within a reasonable time after changes occur in applicable securities laws and regulations and as changes occur in its supervisory system, and shall communicate such amendments through its organization.(g) Each broker-dealer shall establish procedures for the review and endorsement, by a manager in writing and on an internal record, of all transactions and all correspondence of its agents relating to the solicitation or execution of any securities transaction.(h) Each broker-dealer and investment adviser shall establish procedures which ensure that each of their agents and investment adviser agents has complied with section 36b-31-7 e of the regulations.Conn. Agencies Regs. § 36b-31-6f
Effective August 22, 1994; Transferred July 3, 1995