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  • 300. SUPERVISION AND RESPONSIBILITIES RELATING TO ASSOCIATED

    • 311. Capital Acquisition Broker Compliance and Supervision

      (a) All capital acquisition brokers are subject to paragraphs (a)(1) through (a)(6), (b)(1), (b)(4), (b)(5), (b)(7), (e) and (f) of FINRA Rule 3110, and Supplementary Materials .01 through .03, .06 through .09, and .11 following FINRA Rule 3110.
      (b) A capital acquisition broker must permit the examination and inspection of its premises, systems, platforms, and records by representatives of FINRA and the Commission, and must cooperate with the examination, inspection, or investigation of any persons directly or indirectly using its platform.
      Adopted by SR-FINRA-2015-054 eff. April 14, 2017.

      Selected Notice: 16-37.

    • 313. Designation of Chief Compliance Officer

      Each capital acquisition broker must designate and specifically identify to FINRA on Schedule A of Form BD one or more principals to serve as a chief compliance officer.
      Adopted by SR-FINRA-2015-054 eff. April 14, 2017.

      Selected Notice: 16-37.

    • 322. Influencing or Rewarding Employees of Others

      All capital acquisition brokers are subject to FINRA Rule 3220.
      Adopted by SR-FINRA-2015-054 eff. April 14, 2017.

      Selected Notice: 16-37.

    • 324. Borrowing From or Lending to Customers

      All capital acquisition brokers are subject to FINRA Rule 3240.
      Adopted by SR-FINRA-2015-054 eff. April 14, 2017.

      Selected Notice: 16-37.

    • 327. Outside Business Activities of Registered Persons

      All capital acquisition brokers are subject to FINRA Rule 3270.
      Adopted by SR-FINRA-2015-054 eff. April 14, 2017.

      Selected Notice: 16-37.

    • 328. Private Securities Transactions of an Associated Person

      No person associated with a capital acquisition broker shall participate in any manner in a private securities transaction as defined in FINRA Rule 3280(e).
      Adopted by SR-FINRA-2015-054 eff. April 14, 2017.

      Selected Notice: 16-37.

    • 331. Anti-Money Laundering Compliance Program

      Each capital acquisition broker shall develop and implement a written anti-money laundering program reasonably designed to achieve and monitor its compliance with the requirements of the Bank Secrecy Act (31 U.S.C. 5311, et seq.), and the implementing regulations promulgated thereunder by the Department of the Treasury. Each capital acquisition broker's anti-money laundering program must be approved, in writing, by a member of senior management. The anti-money laundering programs required by this Rule must, at a minimum,
      (a) Establish and implement policies and procedures that can be reasonably expected to detect and cause the reporting of transactions required under 31 U.S.C. 5318(g) and the implementing regulations thereunder;
      (b) Establish and implement policies, procedures, and internal controls reasonably designed to achieve compliance with the Bank Secrecy Act and the implementing regulations thereunder;
      (c) Provide for independent testing for compliance, no less frequently than every two years, to be conducted by capital acquisition broker personnel or by a qualified outside party;
      (d) Designate and identify to FINRA (by name, title, mailing address, e-mail address, telephone number, and facsimile number) an individual or individuals responsible for implementing and monitoring the day-to-day operations and internal controls of the program (such individual or individuals must be an associated person of the capital acquisition broker) and provide prompt notification to FINRA regarding any change in such designation(s);
      (e) Provide ongoing training for appropriate personnel; and
      (f) Include appropriate risk-based procedures for conducting ongoing customer due diligence, to include, but not be limited to:
      (i) Understanding the nature and purpose of customer relationships for the purpose of developing a customer risk profile; and
      (ii) Conducting ongoing monitoring to identify and report suspicious transactions and, on a risk basis, to maintain and update customer information. For purposes of paragraph (f)(ii), customer information shall include information regarding the beneficial owners of legal entity customers (as defined in 31 CFR 1010.230(e)).

      • • • Supplementary Material: --------------

      .01 Independent Testing Requirements

      (a) All capital acquisition brokers should undertake more frequent testing than required if circumstances warrant.
      (b) Independent testing, pursuant to Rule 331(c), must be conducted by a designated person with a working knowledge of applicable requirements under the Bank Secrecy Act and its implementing regulations.
      (c) Independent testing may not be conducted by:
      (1) a person who performs the functions being tested,
      (2) the designated anti-money laundering compliance person, or
      (3) a person who reports to a person described in either subparagraphs (1) or (2) above.

      .02 Review of Anti-Money Laundering Compliance Person Information

      Each capital acquisition broker must identify, review, and, if necessary, update the information regarding its anti-money laundering compliance person designated pursuant to Rule 331(d) in the manner prescribed by FINRA Rule 4517.
      Amended by SR-FINRA-2018-035 eff. Nov. 19, 2018.
      Adopted by SR-FINRA-2015-054 eff. April 14, 2017.

      Selected Notice: 16-37, 18-36.