Tenn. Comp. R. & Regs. 0780-04-02-.16

Current through June 26, 2024

Section 0780-04-02-.16 - UNSOLICITED TRANSACTION EXEMPTION

(1) Preliminary Notes:

(a) Nothing in this Rule is intended to relieve registered or exempt broker-dealers or agents from the due diligence, suitability, know-your-customer standards, or any other requirements of the law otherwise applicable to such registered or exempt persons.

(2) Exemption. By the authority delegated to the commissioner in T.C.A. §§ 48-1-103(b)(20) and 48-1-116, all registered or exempt broker-dealers who intend to rely upon the exemption afforded to unsolicited non-issuer transactions on the basis of T.C.A. § 48-1-103(b)(20) must comply with the following to be exempt from T.C.A. §§ 48-1-104 and 48-1-113:

(a) Shall retain the following information for each such unsolicited non-issuer transaction:

1. The CRD numbers for the broker-dealer firm and the agent;

2. The name of the broker-dealer;

3. The name of the agent;

4. The date of the transaction;

5. The dollar amount of the transaction, the number of shares, and the price per share;

6. The Cusip number for each security making up the order placed by the purchaser;

7. The name of each security making up the order placed by the purchaser;

8. The purchaser(s)'s account number at the broker-dealer;

9. The broker-dealer's office address;

10. The broker-dealer's branch office identification number (if applicable);

11. An indication that the transaction was not solicited in any way by the broker-dealer or any agent of the broker-dealer; and

12. An indication that the broker-dealer:

(i) Acted solely as an agent for the purchaser;

(ii) Had no direct or indirect interest in the sale or distribution of the security ordered by the purchaser; and

(iii) Received no commission, profit, or other compensation from any source other than the purchaser.

(b) The information in subparagraph (2)(a) of this Rule must be retained by the broker-dealer for a period of five (5) years from the date of the transaction, in a manner consistent with Rule 0780-04-03-.02(1)(b).

(c) Upon request by the Division, based on a complaint or as the result of a Division examination of the broker-dealer's books and records, the broker-dealer must provide the purchaser(s) with a document containing the information retained pursuant to subparagraph (2)(a) of this Rule and must obtain the purchaser(s) signed acknowledgement that the transaction was unsolicited. Such acknowledgement may be in the form of a manual or electronic signature.

Tenn. Comp. R. & Regs. 0780-04-02-.16

Original rule filed June 17, 2014; effective September 15, 2014. Repeal and new rule filed March 16, 2015; effective 6/14/2015.

Authority: T.C.A. §§ 48-1-103(b)(20), 48-1-111, 48-1-115, 48-1-116), and Public Acts of 2013, Chapter 261.