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  • Temporary Dual FINRA-NYSE Member Rule Series

    The Temporary Dual FINRA-NYSE Member Rule Series (formerly Incorporated NYSE Rules and Incorporated NYSE Rule Interpretations) will apply solely to those members of FINRA that are also members of NYSE on or after July 30, 2007 ("Dual Members"). The Temporary Dual FINRA-NYSE Member Rule Series will apply to the same categories of persons to which they apply as of July 30, 2007.

    • RULES

      • Rule 1T. "The Exchange"

        The term "the Exchange," when used with reference to the administration of any rule, means the New York Stock Exchange LLC or the officer, employee, person, entity or committee to whom appropriate authority to administer such rule has been delegated by the Exchange.
        Unless otherwise indicated in the rule, the terms Board, Board of Directors, Chairman, Chairman of the Board, Chief Executive Officer, or CEO refer to the Board, Board of Directors, Chairman, Chairman of the Board, Chief Executive Officer and CEO of the Exchange.
        Amended:
        February 27, 2006, effective March 8, 2006 (NYSE-2005-77).
        Amended by SR-FINRA-2019-009 eff. May 8, 2019.

      • Rule 2T. "Member," "Membership," "Member Firm," etc.

        (a) The term "member," when used to denote a natural person approved by the Exchange, means a natural person associated with a member organization who has been approved by the Exchange and designated by such member organization to effect transactions on the floor of the Exchange or any facility thereof.
        (b)
        (i) The term "member organization" means a registered broker or dealer (unless exempt pursuant to the Securities Exchange Act of 1934) that is a member of the Financial Industry Regulatory Authority ("FINRA") and approved by the Exchange and authorized to designate an associated natural person to effect transactions on the floor of the Exchange or any facility thereof. This term shall include a natural person so registered, approved and licensed who directly effects transactions on the floor of the Exchange or any facility thereof.
        (ii) The term "member organization" also includes a registered broker or dealer that is a member of FINRA, which does not own a trading license and agrees to be regulated by the Exchange as a member organization and which the Exchange has agreed to regulate.
        (iii) The term "member organization" includes "member firm" and "member corporation."
        (c) The term "approved person" means a person, other than a member, principal executive or employee of a member organization who controls a member organization or is engaged in a securities or kindred business that is controlled by, or under common control with a member or member organization who has been approved by the Exchange as an approved person.
        (d) The term "person" shall mean a natural person, corporation, limited liability company, partnership, association, joint stock company, trust, fund or any organized group of persons whether incorporated or not.
        (e) The term "control" means the power to direct or cause the direction of the management or policies of a person whether through ownership of securities, by contract or otherwise. A person shall be presumed to control another person if such person, directly or indirectly,
        (i) has the right to vote 25 percent or more of the voting securities,
        (ii) is entitled to receive 25 percent or more of the net profits, or
        (iii) is a director, general partner or principal executive (or person occupying a similar status or performing similar functions) of the other person.
        Any person who does not so own voting securities, participate in profits or function as a director, general partner or principal executive of another person shall be presumed not to control such other person. Any presumption may be rebutted by evidence, but shall continue until a determination to the contrary has been made by the Exchange.
        (f) The term "engaged in a securities or kindred business" shall mean transacting business generally as a broker or dealer in securities, including but not limited to, servicing customer accounts or introducing them to another person.
        (g) The term "State" shall mean any state of the United States, the District of Columbia, Puerto Rico, the Virgin Islands, or any other possession of the United States.
        (i) The term "Designated Market Maker" ("DMM") shall mean an individual member, officer, partner, employee or associated person of a Designated Market Maker Unit who is approved by the Exchange to act in the capacity of a DMM.
        (j) The term "DMM unit" is a member organization or unit within a member organization that has been approved to act as a DMM unit under Rule 98.
        Amended:
        March 26, 1970;
        February 1, 1973;
        August 9, 1976;
        July 13, 1978;
        April 2, 1979;
        January 21, 1981;
        February 27, 2006, effective March 8, 2006 (NYSE-2005-77),
        Amended by FINRA-2007-019 eff. Oct. 12, 2007.
        Amended by SR-FINRA-2008-036 eff. Nov. 11, 2008.
        Amended by SR-FINRA-2009-025 eff. Apr. 7, 2009.
        Amended by SR-FINRA-2019-009 eff. May 8, 2019.

        Selected Notices: 07-52, 08-64.

      • Rule 3T. "Security"

        The term "security" or "securities" shall have the meaning given those terms in the Securities Exchange Act of 1934, as amended, and the General Rules and Regulations thereunder.
        Amended:
        March 14, 1977.
        Amended by SR-FINRA-2019-009 eff. May 8, 2019.

      • Rule 6T. "Floor"

        The term "Floor" means the trading Floor of the Exchange and the premises immediately adjacent thereto, such as the various entrances and lobbies of the 11 Wall Street, 18 New Street, 8 Broad Street, 12 Broad Street and 18 Broad Street Buildings, and also means the telephone facilities available in these locations.
        Amended:
        June 14, 2007 (NYSE-2007-51).
        Amended by SR-FINRA-2019-009 eff. May 8, 2019.

      • Rule 8T. "Delivery"

        The term "delivery" means the delivery of securities on Exchange contracts, unless otherwise stated.
        Amended by SR-FINRA-2019-009 eff. May 8, 2019.

      • Rule 11T. Effect of Definitions

        Unless the context requires otherwise, the terms defined in Exchange Rules shall, for all purposes of the Exchange Rules, have the meanings therein specified.
        Amended:
        February 27, 2006, effective March 8, 2006 (NYSE-2005-77).
        Amended by SR-FINRA-2019-009 eff. May 8, 2019.

      • Rule 311T. Formation and Approval of Member Organizations

        (a) Any person who proposes to form a member organization and any member organization which proposes to admit therein any approved person shall notify the Exchange in writing before any such formation or admission and shall submit such information as may be required by the Rules of the Exchange. No such member organization shall become or remain a member organization unless all persons required to be approved are so approved and execute such agreements with the Exchange as the Rules of the Exchange may prescribe.
        (b) The Board of Directors shall not approve a partnership or corporation as a member organization unless:
        (1) each director of such corporation is a member, principal executive or an approved person; and
        (2) every person who controls such corporation is a member, principal executive or approved person; and
        (3) every natural person who is a general partner in such partnership is a member or principal executive and every other person who controls such partnership is a member, principal executive or approved person; and
        (4) every person who engages in a securities or kindred business and is controlled by or under common control with such partnership or corporation is an approved person; and
        (5) The Board of Directors of such corporation designates "principal executives"; and
        (6) such partnership or corporation complies with such additional requirements as the rules of the Exchange may prescribe.
        (7) every employee who is associated as a member with such member organization is designated with a title, such as vice president, consistent with his responsibilities and the usage of titles within such organization.
        (c) In the case of existing corporations making application to become member corporations, there shall be submitted to the Exchange:
        (1) A certified list of all holders of record of each class of stock, giving the name and address of the holder and the number of shares of each class of such stock held;
        (2) A certified list of all persons who are to become members, principal executives, directors or approved persons,
        (3) A certified list of all persons designated as principal executives of the corporation.
        In the case of corporations proposed to be organized, similar information shall be submitted to the Exchange.
        (d) The approval of a corporation as a member corporation constitutes only a revocable privilege and confers on the corporation no right or interest of any nature whatsoever to continue as a member corporation.
        (e) No member corporation shall issue any publicly held security in the form of non-voting common stock unless the Exchange determines that the non-voting common stock has normal and appropriate preferences which entitle it to be regarded as preferred stock.
        (f) Every member firm shall be a partnership and every member corporation shall be a corporation created or organized under the laws of, and shall maintain its principal place of business in, the United States or any State thereof. The Exchange may, in its discretion, and on such terms and conditions as the Exchange may prescribe, approve as a member organization entities that have characteristics essentially similar to corporations, partnerships, or both. Such entities, and persons associated therewith shall, upon approval, be fully, formally and effectively subject to the jurisdiction, and to the Rules of the Exchange to the same extent and degree as are any other member organization and person associated therewith.
        (g) Each member organization shall execute and file with the Exchange a written agreement in a form acceptable to the Exchange evidencing
        (1) the authority of any member who is an officer or employee of such member organization to transact business on the Floor on behalf of such member organization, and
        (2) such member organization's responsibility and obligation with respect to any contract entered into on the Floor by any such member.
        Amendments.
        March 26, 1970.
        July 11, 1974, effective July 18, 1974.
        August 9, 1976.
        July 13, 1978.
        April 2, 1979.
        January 21, 1981.
        March 29, 1989.
        September 13, 1994.
        February 27, 2006, effective March 8, 2006 (NYSE-2005-77), amended by SR-FINRA-2008-034 eff. Jan. 1, 2008.
        Amended by SR-FINRA-2008-036.

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

        .10 Rescinded effective February 15, 1979. (See Exchange Rule 351 for reporting requirements.)

        .11 Application

        The papers required to be submitted prior to approval of the formation or admission of a member organization are as follows:
        (1) Letter giving name and address of proposed or existing organization, date of proposed formation or admission, and names of all proposed or present officers and other parties required to be approved by the Exchange under Rule 311T and Exchange Rule 304; and
        (2) individually executed applications by all parties whose approval by the Exchange is required.
        The papers required to be submitted prior to approval of the admission to an existing member organization of any party requiring the approval of the Exchange under Rule 311T and Exchange Rule 304, are as follows:
        (1) Letter stating name of such proposed party and proposed date of admission to member organization; and
        (2) an individually executed application by such proposed party.

        .12 Authorization and Statement of Understanding

        Each member organization, or proposed member organization, must submit the following authorization and statement of understanding executed by each natural person requiring the approval of the Exchange under Exchange Rule 304:
        "In connection with my current application, I authorize the New York Stock Exchange, Inc. and any agent acting on its behalf, to conduct an investigation of my character, credit worthiness, ability, business activities, educational background, previous employment and reasons for termination thereof.

        "I authorize and request any and all of my former employers, and any other person to furnish to the Exchange, and any agent acting on its behalf, any information that they may have concerning my character, credit worthiness, ability, business activities, educational background, general reputation, previous employment and reasons for termination thereof . . . Moreover, I hereby release each such employer and each such other person from any and all liability of whatsoever nature by reason of furnishing such information to the Exchange and any agent acting on its behalf.

        "Further, I recognize that I will be the subject of an investigative report ordered by the Exchange and acknowledge that I have been informed of my right to request information from the Exchange concerning the nature and scope of the investigation requested."

        .13 Agreement with the Exchange

        Each member corporation and each member and approved person of the corporation must agree with the Exchange that if any person required to be approved by the Exchange as a member or approved person fails or ceases to be so approved, the corporation may be deprived by the Exchange of all the privileges of a member corporation unless the corporation redeems or converts the stock held by such person as required under Exchange Rule 312.

        .14 Partnership agreements

        For information regarding the submission of copies of proposed partnership articles, see ¶2313.10.

        .15 Corporate documents

        For information regarding the submission of copies of proposed or existing corporate documents and other agreements, see ¶2313.20.

        .16 Filing With Agent

        Any filing or submission required under this rule which is made with a properly authorized agent acting on behalf of the Exchange shall for purposes of this rule be deemed to be a filing with the Exchange.

        Amendments.
        March 26, 1970.
        July 11, 1974, effective July 18, 1974.
        August 9, 1976.
        July 13, 1978.
        April 2, 1979.
        January 21, 1981.
        March 29, 1989.
        September 13, 1994.
        February 27, 2006, effective March 8, 2006 (NYSE-2005-77), amended by SR-FINRA-2008-034 eff. Jan. 1, 2008.
        Amended by SR-FINRA-2008-036 eff. Nov. 11, 2008.
        Amended by SR-FINRA-2017-007 eff. Oct. 1, 2018.
        Amended by SR-FINRA-2019-009 eff. May 8, 2019.

        Selected Notice: 08-64, 17-30.

      • Rule 312T. Changes Within Member Organizations

        (a) Each member organization, shall promptly give to the Exchange notice in writing on such form as may be required by the Exchange (1) on Form U-5, of the death, retirement, or other termination of any party required to be approved under the Rules of the Exchange, (2) of the dissolution of the member organization.
        (b) In addition, in the case of a member corporation, such member corporation shall give written notice (1) of any material change in the stockholdings of any member, principal executive or approved person of such member corporation, (2) of any proposed change in the directors or officers, or (3) of any proposed change in the charter, certificate of incorporation, by-laws or other documents on file with the Exchange, or (4) of the failure to comply with all the conditions of approval specified in Exchange Rule 311.
        (c) Each member, principal executive and approved person of a member corporation shall promptly notify his member corporation of any material acquisition or disposition of shares of stock of such corporation.
        (d) Whenever a person who is required to be approved by the Board as a member, principal executive or approved person fails or ceases to be so approved, each member corporation shall promptly redeem or convert to a fixed income security such of its outstanding voting stock as may be necessary to reduce such party's ownership of voting stock in the member corporation below that level which enables such party to exercise controlling influence over the management or policies of such member corporation.
        (e) Unless permitted by the Exchange in order to protect investors and the public interest or to facilitate the administration of the Exchange, no person shall be a member or principal executive in a member organization unless all persons required to be approved by the Exchange are so approved.
        (f) Reserved.
        (g) A member corporation shall not without the prior written approval of the Exchange:
        (1) In any way amend its charter, certificate of incorporation or by-laws.
        (2) Issue any bonds, notes or other instruments evidencing funded indebtedness of the corporation except pursuant to the terms and provisions of such security or of any agreement between the member corporation and the holder of such security, which agreement has been previously filed with and approved by the Exchange.
        (3) Amend, modify or cancel any agreement made by it or any of its stockholders relating to the management of the corporation or the issue or transfer of securities of the corporation (other than agreements relating to ordinary securities and commodities transactions).
        The Exchange will approve any action described in (1), (2) or (3) above unless it determines that such action will impair the financial responsibility or operational capability of the member corporation.
        (h) Reserved.
        (i) In order to ensure the continued financial responsibility and operational capability of a member corporation, the Exchange may require such member corporation to file with the Exchange a written report showing the use made by the member organization of the proceeds of any offering of any security issued by such member organization.
        (j) No stock shall be issued by a member corporation except for cash or such other consideration as the Exchange determines will not impair the financial responsibility or operational capability of such member corporation.
        Amendments.
        December 19 1968, effective January 1, 1969.
        March 26, 1970.
        February 1, 1973.
        August 9, 1976.
        July 13, 1978.
        October 19, 1978.
        April 2, 1979.
        January 21, 1981.
        October 26, 1989.
        February 27, 2006, effective March 8, 2006 (NYSE-2005-77). August 25, 2006 (NYSE-2005-58).
        Amended by SR-FINRA-2008-036 eff. Nov. 11, 2008.
        Amended by SR-FINRA-2009-044 eff. Dec. 14, 2009.
        Amended by SR-FINRA-2008-067 eff. Feb. 8, 2010.
        Amended by SR-FINRA-2010-008 eff. Feb. 8, 2010.
        Amended by SR-FINRA-2019-009 eff. May 8, 2019.

        Selected Notices: 08-64, 09-60, 09-71.

      • Rule 313T. Submission of Partnership Articles—Submission of Corporate Documents

        (a) All partnership articles and all amendments thereto shall be submitted and be acceptable to the Exchange prior to becoming effective.
        (b) The charter or certificate of incorporation and all amendments thereto, the by-laws and all amendments thereto, forms of stock certificates and any and all agreements or other documents and amendments thereto relating to the business or affairs of the member corporation between a member corporation and any of its stockholders or between any of the members, principal executives or approved persons of a member corporation other than agreements relating to ordinary securities and commodities transactions shall be submitted to and be acceptable to the Exchange prior to becoming effective.
        (c) Any prospectus or other offering circular prepared by a member corporation and used in connection with the offering of any security issued by it shall, prior to such use, be submitted by such corporation to the Exchange.
        (d) Reserved.
        (e) Each member corporation shall, at such times as may be required by the Exchange, submit to the Exchange through its chief executive officer a certified list of its members, principal executives and approved persons showing to the best of his knowledge and belief the number of shares of each class of stock of such corporation held of record or beneficially or both by each such party.
        (f) Each member corporation shall, through its chief executive officer, submit to the Exchange at such times as the Exchange may require an affidavit listing to the best of his knowledge and belief the name of each party directly or indirectly beneficially owning 1% or more of the outstanding voting stock of such member corporation and showing the percentage of such ownership.
        Amendments.
        March 26, 1970.
        December 16, 1971.
        August 9, 1976.
        Amended by SR-FINRA-2008-036 eff. Nov. 11, 2008.
        Amended by SR-FINRA-2008-067 eff. Feb. 8, 2010.

        Selected Notices: 08-64, 09-71.

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

        Information Regarding Partnership Articles

        .10 Submission of partnership agreements

        Drafts of partnership articles or of changes in partnership articles proposed to be entered into in connection with the formation of a firm or the admission of a new partner should be submitted to Regulation & Surveillance at least one week in advance of the date on which the application will be acted upon by the Board of Directors. Drafts of other changes to be made in partnership articles should be submitted in advance of their effective date.
        The Exchange requires that a signed, photostatic or conformed copy of all partnership articles, including any amendments and supplements thereto, as executed, be filed with the Exchange.
        (See ¶2311 for procedure to be followed regarding approval of partners and partnerships.)

        .11 Withdrawal of capital

        The partnership articles of each member firm shall contain provisions that without the prior written approval of the Exchange the capital contribution of any partner may not be withdrawn on less than six months' written notice of withdrawal given no sooner than six months after such contribution was first made. Each member firm shall promptly notify the Exchange of the receipt of any notice of withdrawal of any part of a partner's capital contribution or if any withdrawal is not made because prohibited under the provisions of Securities and Exchange Commission Rule 15c3-1 (see 15c3-1(e)).

        Adopted.
        July 15, 1971.

        Amendments.
        January 20, 1972.
        October 16, 1975; effective January 1, 1976.

        .12 Deceased Partner's Interest in Continuing Firm

        I.   The Exchange cannot, upon a partner's death, regard his interest as continuing to be part of the net capital of the continuing or successor firm unless the partnership articles of the firm contain specific and legally adequate provisions to the effect that the claim of the personal representative of a deceased partner to the partner's interest in the firm shall be subordinated to the claims of all present or future creditors of the continuing firm (or any successor firm) arising out of matters occurring subsequent to the partner's death.

        If it is the desire and intent of the partners of any firm that the interest of a deceased partner shall be considered, without interruption after his death, as a part of the capital of the continuing or successor firm for a specified period, the partnership articles should effectively provide in substance:
        (1) That the payment of the deceased partner's interest in the firm to his estate can be deferred for a stated period; and
        (2) that until such payment, the interest of the deceased partner shall remain at the risk of the business of the continuing or successor firm and shall be considered as capital of such firm in the same manner and to the same extent as capital contributed by a limited partner; and
        (3) that any claim of the personal representative of the deceased partner to such interest shall be subordinated in right of payment and subject to the prior payment or provision for payment in full of claims of all present and future creditors of the continuing firm (or successor firm) arising out of any matters occurring before the end of the stated period.

        II.   If it is the desire of the partners to have a deceased partner's capital continued for a stated period immediately following his death, with the option in his personal representative to continue it for a longer period under the provisions of the deceased partner's Will, it is suggested that the stated period in the partnership agreement be made sufficiently long as to permit the conditions discussed below with respect to testamentary provisions to be complied with.

        Provisions in a deceased partner's Will (as distinguished from those in a partnership agreement) providing that the personal representative shall or may become a limited partner in the firm or subordinate the claims of the estate to decedent's interest to the claims of firm creditors who become such after the decedent's death, with respect to the Exchange's determination whether or not to allow a deceased partner's capital interest in computing the net capital of the firm will depend on the facts and circumstances of each case as they exist at the time of such determination. However, in no case will such testamentary provisions be considered as effective in connection with the Exchange's computation of net capital unless at least the following conditions are met:
        (1) The Will must contain provisions specifically authorizing the personal representative of the deceased partner either to continue the decedent's capital interest in the firm as limited capital, or otherwise to subordinate the estate's claims against the firm to the claims of creditors of the firm.
        (2) The Exchange must be furnished with a satisfactory opinion of counsel to the estate, to the effect that (A) the Will is valid and in full force and effect, (B) the named personal representative is duly qualified and is the executor administering the Will, (C) the personal representative is authorized by the Will to make or continue a capital contribution to the firm, (D) if the personal representative is a partner of, or otherwise interested in, the firm, said representative is authorized by the Will to deal with the estate for his own benefit, (E) all claims of present and future creditors and beneficiaries of the Estate and their successors are subordinate to the claims of all present and future creditors of the firm and its successors.
        (3) The personal representative of the decedent must have taken appropriate action either to become a limited partner in the firm or to subordinate the capital interest of the deceased partner as indicated above.

        III.   It is recommended that member firms consult their own counsel with respect to the advisability of incorporating in their partnership articles provisions of the sort discussed in this Section. Any member firm which decides to adopt such provisions should submit the proposed provisions, in draft form, to the Exchange. Such member firm will then be advised whether, upon the adoption of such provisions and in the event of the death of a partner, the Exchange will be in a position to consider his interest in the firm as part of its net capital for the specified period following his death.

        Amendment.
        October 16, 1975; effective January 1, 1976.

        Information Regarding Member Corporations

        .20 Submission by proposed member corporations of certificate of incorporation, by-laws and other corporate documents

        Existing corporations shall promptly submit certified copies (to the extent possible) of the documents referred to in Rule 313T(b) and corporations to be formed shall submit drafts thereof, prior to the time they become effective, to Regulation & Surveillance. Upon the formation of a corporation or when an amendment to any of such documents becomes effective, a duly certified copy of the certificate of incorporation and by-laws shall be filed with Regulation & Surveillance and signed, photostatic or conformed copies of the other documents shall be so filed.
        (See ¶2311 for procedure to be followed regarding approval of corporations.)
        There shall also be submitted an opinion of counsel in form and substance satisfactory to the Exchange stating, among other things, that the corporation is duly organized and existing and that its stock is validly issued and outstanding and that the restrictions and provisions required by the Exchange on the transfer, issuance, conversion and redemption of its stock have been made legally effective.
        Amendment.
        March 26, 1970.

        (See .23, below, for restrictions on corporations not incorporated under laws of the State of New York.)

        .21 Provisions concerning disposition of stock

        The certificate of incorporation of a member corporation may contain provisions that the corporation or its stockholders, or both, may have a prior right to purchase the stock of any stockholder upon such terms and conditions as may be specified therein.
        The Exchange will expect a member corporation, either through its certificate of incorporation or separate agreements, to be in a position at all times to comply with the provisions of Rule 312T(d).
        Each stock certificate of a member corporation shall carry on its face a statement of any such provisions or a full summary thereof.
        Amendments.
        March 26, 1970.
        March 16, 1972.
        August 9, 1976.
        April 2, 1979.

        .22 Provisions concerning redemption or conversion

        Each certificate of incorporation of a member corporation shall contain provisions authorizing the corporation to redeem or convert to a fixed income security all or any part of the outstanding shares of voting stock of such member corporation owned by any person required to be approved by the Board of Directors of the Exchange as a member or approved person who fails or ceases to be so approved as may be necessary to reduce such party's ownership of voting stock in the member corporation below that level which enables such party to exercise controlling influence over the management or policies of such member corporation.
        If the certificate of incorporation of a member corporation subject to Exchange Rule 325 provides that a stockholder may compel the redemption of his stock such certificate must provide that without the prior written approval of the Exchange, the redemption may only be effected on a date not less than six months after receipt by the member corporation of a written request for redemption given no sooner than six months after the date of the original issuance of such shares (or any predecessor shares). Each member corporation shall promptly notify the Exchange of the receipt of any request for redemption of any stock or if any redemption is not made because prohibited under the provisions of Securities and Exchange Commission Rule 15c3-1 (See 15c3-1(e)).
        Each stock certificate of a member corporation shall carry on its face a statement of the restrictions in SEC Rule 15c3-1(e) relating to the redemption of stock or a full summary thereof.
        Adopted.
        March 26, 1970.

        Amendments.
        July 15, 1971.
        January 20, 1972.
        October 16, 1975; effective January 1, 1976.
        August 9, 1976.
        Amended by SR-FINRA-2008-036 eff. Nov. 11, 2008.

        Selected Notice: 08-64.

        .23 Restrictions on corporations

        Corporations not organized under the laws of the State of New York shall effectively subject themselves to the following restrictions and the opinion of counsel submitted to the Exchange at the time the corporation applies for approval as a member corporation shall set forth the extent to which the following restrictions have been made legally effective:
        No dividend shall be declared or paid which shall impair the capital of the corporation nor shall any distribution of assets be made to any stockholder unless the value of the assets of the corporation remaining after such payment or distribution is at least equal to the aggregate of its debts and liabilities, including capital.
        Renumbered.
        March 26, 1970.

        Amended by SR-FINRA-2019-009 eff. May 8, 2019.

      • Rule 321T. Formation or Acquisition of Subsidiaries

        No member organization may, without the prior written approval of the Exchange, form or acquire a subsidiary company. The member organization shall require such subsidiary to comply with the following provisions.

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

        Information Regarding Subsidiary Companies of Member Organizations

        .10 Definition of subsidiary

        For purposes of this rule, the term "subsidiary" means an entity engaged in a securities or kindred business that is controlled by a member organization within the meaning of Exchange Rule 2. However, control shall not be presumed, for purposes of this rule, merely because a member is a director or principal executive of another person.
        Adopted.
        August 31, 1993.
        February 27, 2006, effective March 8, 2006 (NYSE-2005-77).
        Amended by SR-FINRA-2008-036 eff. Nov. 11, 2008.

        Selected Notice: 08-64.

        .11 Form of organization

        A subsidiary shall be an incorporated company or partnership.
        Amendments.
        August 31, 1993.
        August 19, 1994.

        .12 Name

        The name of the subsidiary and the name of the member organization must be sufficiently different to prevent confusion. The mere addition of "Inc." or "and Co." may not be sufficient.
        Amendments.
        August 31, 1993.
        August 19, 1994.

        .13 Severance of connection with subsidiary

        The Exchange may at any time require that the member organization and the partners or stockholders thereof sever all connections with the subsidiary including the disposition of all securities and other interests therein, or such amount thereof as determined by the Exchange. Concurrent with or at any time after directing such severance, the Exchange may require the member organization to change its name if the Exchange finds that the name of the former subsidiary may be confused with the name of such member organization.
        Amendment and Renumbered.

        August 31, 1993.
        February 27, 2006, effective March 8, 2006 (NYSE-2005-77).

        .14 List of stockholders

        A list of stockholders or partners of the subsidiary shall upon request be submitted to the Exchange.
        Amendment and Renumbered.

        August 31, 1993.

        .15 Reserved.

        Amendment and Renumbered.

        August 31, 1993.
        Amended by SR-FINRA-2017-007 eff. Oct. 1, 2018.

        Selected Notice: 17-30.

        .16 Capital requirements

        The Exchange will not prescribe capital requirements for a subsidiary. However, the Exchange will require a pro forma balance sheet of the subsidiary to be filed with it before any action is taken on a member or member organization's application to form such a subsidiary. The Exchange may, however, require the submission of subsequent financial statements.
        Amendment and Renumbered.

        August 31, 1993.

        .17 Banking commitments

        A subsidiary's banking and other commitments, loans and obligations shall be kept separate and distinct from those of the member or member organization with which it is affiliated.
        Amendment and Renumbered.

        August 31, 1993.

        .18 Functions of a subsidiary

        A subsidiary may be formed to do an underwriting, agency or dealer business, or any other business acceptable to the Exchange.
        Amendment and Renumbered.

        August 31, 1993.

        .19 Offices

        A subsidiary will be permitted, under the conditions set forth in Exchange Rule 343 to occupy the same quarters as those of the member organization.
        Amendment and Renumbered.

        August 31, 1993.

        .20 Books and records

        A subsidiary shall keep books and records separate and distinct from those of the member or member organization with which it is affiliated and such books and records shall, upon request, be made available by the member or member organization for inspection by the Exchange. However, such books and records may be maintained by the member or member organization.
        Amendment and Renumbered.

        August 31, 1993.

        .21 Transactions between members or member organizations and subsidiaries

        A subsidiary will not be prohibited by the Exchange from having cash or margin brokerage transactions effected for its account by the member or member organization (See Section 11(a) of the Securities Exchange Act of 1934). The rules and regulations applicable generally to customer's accounts shall be applicable to each such account.
        Amendment and Renumbered.

        August 31, 1993.

        .22 Conditions to be complied with after organization of subsidiary but prior to commencement of business

        No subsidiary shall commence business after its organization without the prior written approval of the Exchange. Before giving such approval there shall be submitted to the Exchange an opinion of counsel, in form and substance satisfactory to the Exchange, stating (1) that the subsidiary is duly organized and existing, and (2) that the securities, if any, of the subsidiary has been duly and validly issued and is fully paid and non-assessable.
        Amendment and Renumbered.

        August 31, 1993.

        .23 New issues

        The provisions of Section 11(d)(1) of the Securities Exchange Act of 1934, relating to the extension or maintenance of credit in connection with new issues, will apply to transactions by a member or member organization in new issues in the distribution of which its subsidiary participated with the same force and to the same extent as if the member or member organization itself had participated in the distribution of such new issues.
        Amendment and Renumbered.

        August 31, 1993.

        .24 Reserved.

        Amendment and Renumbered.

        August 31, 1993.
        March 22, 2001 (NYSE-2000-37).

        Amendments.
        August 31, 1993.
        August 19, 1994.
        Amended by SR-FINRA-2009-044 eff. Dec. 14, 2009.
        Amended by SR-FINRA-2019-009 eff. May 8, 2019.

        Selected Notice: 09-60.

      • Rule 408T. Discretionary Power in Customers' Accounts

        (a) No member or employee of a member organization shall exercise any discretionary power in any customer's account or accept orders for an account from a person other than the customer without first obtaining written authorization of the customer, the signature of the person or persons authorized to exercise discretion in the account (and of any substitute so authorized), and the date such discretionary authority was granted.
        (b) No member or employee of a member organization shall exercise any discretionary power in any customer's account, without first notifying and obtaining the approval of another person delegated under Exchange Rule 342(b)(1) with authority to approve the handling of such accounts. Every order entered on a discretionary basis by a member or employee of a member organization must be identified as discretionary on the order at the time of entry. Such discretionary accounts shall receive frequent appropriate supervisory review by a person delegated such responsibility under Exchange Rule 342(b)(1), who is not exercising the discretionary authority. A written statement of the supervisory procedures governing such accounts must be maintained.
        (c) No member or employee of a member organization exercising discretionary power in any customer's account shall (and no member organization shall permit any member or employee thereof exercising discretionary power in any customer's account to) effect purchases or sales of securities which are excessive in size or frequency in view of the financial resources of such customer.
        (d) The provisions of this rule shall not apply to discretion as to the price at which or the time when an order given by a customer for the purchase or sale of a definite amount of a specified security shall be executed. The authority to exercise time and price discretion will be considered to be in effect only until the end of the business day on which the customer granted such discretion, absent a specific, written, contrary indication signed and dated by the customer. This limitation shall not apply to time and price discretion exercised in an institutional account pursuant to valid Good-Till-Cancelled instructions issued on a "not-held" basis. Any exercise of time and price discretion must be reflected on the order ticket.

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

        .10 All discretionary orders in listed index warrants must be approved and initialed on the day entered by a Senior Registered Options Principal or Registered Options Principal.

        .11 For purposes of this rule, an "institutional account" shall mean the account of (i) a bank (as defined in Section 3(a)(6) of the Securities Exchange Act of 1934), (ii) a savings association (as defined in Section 3(b) of the Federal Deposit Insurance Act), the deposits of which are insured by the Federal Deposit Insurance Corporation, (iii) an insurance company (as defined in Section 2(a)(17) of the Investment Company Act of 1940), (iv) an investment company registered with the Securities and Exchange Commission under the Investment Company Act of 1940, (v) a state or a political subdivision thereof, (vi) a pension or profit sharing plan, subject to ERISA, with more than $25,000,000 total assets under management, or of an agency of the United States or of a political subdivision thereof, (vii) any person that has a net worth of at least forty-five million dollars and financial assets of at least forty million dollars, or (viii) an investment adviser registered under Section 203 of the Investment Advisers Act of 1940.

        Amendments.
        December 19, 1968.
        April 3, 1975.
        June 26, 1990.
        June 17, 2004 (Effective December 17, 2004) (SR-NYSE-2002-36).
        Amended by SR-FINRA-2008-036 eff. Nov. 11, 2008.
        Amended by SR-FINRA-2019-009 eff. May 8, 2019.

        Selected Notice: 08-64.

      • Rule 409T. Statements of Accounts to Customers

        (a) Except with the permission of the Exchange, or as otherwise provided by this paragraph, member organizations shall send to their customers statements of account showing security and money positions and entries at least quarterly to all accounts having an entry, money or security position during the preceding quarter. Quarterly statements need not be sent to a customer pursuant to Rule 409T(a) if:
        1)  the customer's account is carried solely for the purpose of execution on a Delivery versus Payment/Receive versus Payment basis (DVP/RVP);
        2)  all transactions effected for the account are done on a DVP/RVP basis in conformity with Exchange Rule 387;
        3)  the account does not show security or money positions at the end of the quarter;
        4)  the customer consents to the suspension of such statements in writing. Such consents must be maintained by the member organization in a manner consistent with Exchange Rule 440 and SEA Rule 17a-4;
        5)  the member organization undertakes to provide any particular statement or statements to the customer promptly upon request; and
        6)  the member organization undertakes to promptly reinstate the delivery of such statements to the customer upon request.
        Nothing in this rule shall be seen to qualify or condition the obligations of a member organization under SEA Rule 15c3-2 concerning quarterly notices of free credit balances on statements.
        For purposes of this rule, a DVP/RVP account is an arrangement whereby payment for securities purchased is to be made to the selling customer's agent and/or delivery of securities sold is to be made to the buying customer's agent in exchange for payment at time of settlement, usually in the form of cash.
        (b) No member organization shall address confirmations, statements or other communications to a nonmember customer
        (1) in care of a person holding power of attorney over the customer's account unless either (A) the customer has instructed the member organization in writing to send such confirmations, statements or other communications in care of such person, or (B) duplicate copies are sent to the customer at some other address designated in writing by him; or
        (2) at the address of any member, member organization, or in care of a partner, stockholder who is actively engaged in the member corporation's business or employee of any member organization. The Exchange may upon written request therefore waive these requirements.
        (c) Rescinded October 6, 1978. (See SEA Rule 10b-10).
        (d) Rescinded July 1, 1970. (See SEA Rule 10b-16).
        (e) Each statement of account sent to a customer pursuant to this rule shall bear a legend as follows:
        (1) A legend that reads: "A financial statement of this organization is available for your personal inspection at its offices, or a copy of it will be mailed upon your written request."
        (2) A legend that advises customers to report promptly any inaccuracy or discrepancy in that person's account to his or her brokerage firm. If a customer's account is subject to a clearing agreement pursuant to Exchange Rule 382, the legend must advise that such notification be sent to both the introducing firm and the clearing firm. The legend must also advise the customer that any oral communications with either the introducing firm or the clearing firm should be re-confirmed in writing in order to further protect the customer's rights, including its rights under the Securities Investor Protection Act (SIPA).
        (f) Reserved.
        (g) Member organizations carrying margin accounts for customers should send duplicate copies of monthly statements of guaranteed accounts to the respective guarantors unless such guarantors have specifically declared in writing that they do not wish such statements sent to them.
        Repositioned from Rule 411.50 with change effective May 28, 1982.

        Amendment.
        October 15, 1964, effective January 1, 1965;
        June 16, 1966;
        July 20, 1967;
        May 28, 1982;
        November 22, 2006 (NYSE-2005-90);
        December 8, 2006 (NYSE-2005-09);
        Amended by SR-FINRA-2007-037 eff. Jan. 1, 2008.
        Amended by SR-FINRA-2009-058 eff. June 17, 2011.
        Amended by SR-FINRA-2019-009 eff. May 8, 2019.

        Selected Notice: 07-65.

      • Rule 416T. Questionnaires and Reports

        (a) Each member and member organization shall submit to the Exchange at such times as may be designated in such form and within such time period as may be prescribed such information as the Exchange deems essential for the protection of investors and the public interest.
        (b) Reserved.
        (c) Any report filed pursuant to this Rule containing material inaccuracies shall, for purposes of this rule, be deemed not to have been filed until a corrected copy of the report has been resubmitted.
        Amended by SR-FINRA-2008-034 eff. Jan. 1, 2008.

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

        .10 Member organizations may be required to provide financial and operational reports as required by paragraph (a) of this Rule for affiliated organizations, including but not limited to, persons referred to in Exchange Rules 321 and 322.

        .20 Reserved.

        Amendment.
        August 31, 1993.
        March 30, 2001.
        Amended by SR-FINRA-2008-067 eff. Feb. 8, 2010.
        Amended by SR-FINRA-2019-009 eff. May 8, 2019.

        Selected Notice: 09-71.

      • Rule 416AT. Member And Member Organization Profile Information Updates And Quarterly Certifications Via The Electronic Filing Platform

        (a) Members and member organizations must furnish the Exchange with all of the profile information required by the Exchange's Electronic Filing Platform ("EFP"), and must comply with any Exchange request for such information promptly, but in any event not later than thirty days following such request.
        (b) Members and member organizations must update their required membership profile information promptly, but in any event not later than thirty days following any change in such information.
        (c) Each member and member organization shall designate to the Exchange an appropriate senior officer as referenced in Exchange Rule 351(e), or his or her designee, as its membership profile contact person.
        (d) Each member or member organization shall certify electronically once during each of the months of March, June, September, and December of every year that it has reviewed its required membership profile information, and that such information is complete and accurate.
        Amended:
        November 24, 2004 (NYSE-2004-48).
        Amended by SR-FINRA-2019-009 eff. May 8, 2019.

      • Rule 435T. Miscellaneous Prohibitions

        No member or member organization shall:

        (1) Reserved.
        (2) Reserved.
        (3) Reserved.
        (4) Reserved.
        (5) Circulation of rumors
        Circulate in any manner rumors of a sensational character which might reasonably be expected to affect market conditions on the Exchange. Discussion of unsubstantiated information published by a widely circulated public media is not prohibited when its source and unsubstantiated nature are also disclosed. Report shall be promptly made to the Exchange of any circumstance which gives reason to believe that any rumor or unsubstantiated information might have been originated or circulated for the purpose of influencing prices in listed securities.
        (6) Reserved.
        (7) Reserved.
        Amendments.
        April 21, 1966.
        December 19, 1968.
        March 26, 1970.
        December 11, 1975; effective March 12, 1976.
        Amended by SR-FINRA-2008-036 eff. Nov. 11, 2008.
        Amended by SR-FINRA-2008-028 eff. Dec. 15, 2008.
        Amended by SR-FINRA-2019-009 eff. May 8, 2019.

        Selected Notice: 08-57, 08-64.

    • INTERPRETATIONS

      • Rule 311T Formation and Approval of Member Organizations

        (b)

        (5) OFFICERS
        /01 Reserved.
        /02 Reserved.
        /03 Reserved.
        /06 Limitations on Principal Executives
        Principal Executives may be part-time employees, subject to the prior approval of the member organization pursuant to Exchange Rule 346(e).

        (f) PRINCIPAL PLACE OF BUSINESS

        /01 Criteria
        In order to satisfy the rule's requirement that a member organization's principal place of business be maintained within the U.S., at least the following must be located within the U.S., at a definite and manned physical location which is adequate to serve as the site for Exchange inspection of the organization:
        a) Assets of customers who are citizens or residents of the U.S. and assets associated with transactions effected in the U.S., except for: (1) funds which are ordinarily held in branch offices or in transit, and (2) securities which are held as provided for in SEA Rule 15c3-3(c).
        To the extent that the broker-dealer introduces customer accounts on a fully disclosed basis to a carrying firm which is located in the U. S., such customer assets may be located at the carrying firm.
        b) Books and records customarily maintained by brokers and dealers at their principal place of business and sufficient to permit the Exchange to conduct its inspection of the member organization.
        The utilization of a clearing broker, a bank, or a service bureau which prepares or maintains the member organizations' books and records in accordance with SEA Rules 17a-3 and 17a-4 would satisfy this criterion if such broker, bank or bureau is located in the U.S., and the records would be readily accessible to the Exchange.
        c) Member organization capital sufficient to meet applicable capital requirements.
        d) All allied members, qualified and authorized to perform Exchange Rule 342 functions.
        e) Clearance, settlement and securities handling operations which pertain to securities transactions effected in the U.S., to the extent that such operations are maintained by the broker-dealer.
        f) Operations pertaining to foreign securities transactions effected on behalf of customers who are citizens or residents of the U.S., to the extent that such operations are customarily maintained by a broker-dealer at a principal place of business.

        (g) MINIMUM OF ACTIVE PARTNERS IN MEMBER ORGANIZATIONS — USE OF MEMBER ORGANIZATION NAME

        /01 Reserved.
        /02 Divisions of Member Organizations — Names
        Divisions that are not separate legal entities may not be identified by the use of such words as "Company", "Corporation" or "Incorporation", which connote separate entities. Persons staffing such divisions should not have the title of "President", which indicates a separate entity. The titles, "Vice President" or "Assistant Vice President" are satisfactory when used in a context which does not convey the existence of authority on behalf of the member organization not, in fact, possessed by that individual.
        Amendment.
        Amended by SR-FINRA-2008-036 eff. Nov. 11, 2008.
        Amended by SR-FINRA-2008-030 eff. Dec. 15, 2008.
        Amended by SR-FINRA-2017-007 eff. Oct. 1, 2018.
        Amended by SR-FINRA-2019-009 eff. May 8, 2019.

        Selected Notices: 08-57, 08-64, 17-30.

      • Rule 401T Business Conduct

        /01 Trading Against Firm Recommendations

        Reserved.

        /02 Private Sales

        Reserved.

        /03 Conversions, Acquisitions and Changes in Business Activities

        Member organizations are expected to notify the Exchange when planning important organizational or operational changes, such as mergers with or acquisitions of other broker/dealers or the acquisition of a significant electronic data processing system conversion or a change in business activity involving the addition of new product lines such as municipal bonds, government securities, options or commodities, etc. By discussing these proposals with the Exchange well in advance of implementation, member organizations will have the benefit of the Exchange's insight and experience which may serve to aid in avoiding financial and operational problems.

        /04 Early Reporting of Developing Problems

        Exchange and SEC regulations presently require member organizations to give certain "early warning" notices when conditions fall outside of specified parameters. However, it has been our experience that in many cases an earlier informal notice can help resolve the difficulty before any formal notification would be required. The Exchange, therefore, expects notification from a member organization immediately upon discovery of any existing or impending condition(s) which it reasonably believes could lead to capital, liquidity or operational problems or impairment of record-keeping, clearance or control functions.
        A list of the kind of potential problems on which early notification is expected follows. It should be realized that this list is not intended to be all inclusive and that your coordinator may be of further assistance with regard to situations not specifically covered.

        Capital Problems

        Concentrations in securities or commodities positions, commitments or other contingencies wherein adverse results could reasonably be expected to create a loss or net capital deduction that would result in a violation of the net capital requirements.
        Accruals of expenses, deficits in customers' or brokers' accounts, liabilities, "Don't Know" trades, short security positions and similar items for which adequate reserves have not been provided and which, individually or in the aggregate, could have a material adverse effect on net capital.
        An acceleration clause or other default provision in a loan or subordinated loan agreement is expected to or has become operative.

        Reserve Requirements Problems

        Any condition that could result in a material failure to make a required deposit or cause a deficiency in the balance on deposit in the Special Reserve Bank Account for the Exclusive Benefit of Customers as required under SEA Rule 15c3-3.

        Liquidity Problems

        Any problem with liquidity, profitability or a cash or other asset shortage which could materially inhibit a broker or dealer from promptly meeting its obligations to customers, other broker/dealers or creditors.
        Impending circumstances which cause or might cause a bank to call its loans or to refuse to carry the firm's accounts in a normal fashion.
        Developing situations which cause or might cause a clearing corporation to limit the firm to cash settlements.
        Impending or actual inability to complete daily deliveries without the creation of deficit conditions pursuant to possession and control requirements under SEA Rule 15c3-3 for customers' securities.

        Recordkeeping Problems

        Any situation which may materially impair accurate maintenance of the member organization's Books and Records or the ability to account for possession or control of securities or commodities. This could be a computer breakdown, service agency problems, loss of key personnel, systems conversions, continuous inability to complete daily activities because of volume or personnel difficulties or similar reasons.

        Reputation Problems

        Loss of confidence in a broker-dealer may cause immediate returns of stock loans, refusals to trade or buy- ins by other broker-dealers, calling of bank loans or tightening of collateral requirements, customer account delivery requests and eventual profit deterioration.
        Reputation may be impaired either by direct events such as announcements of disciplinary actions or litigation against a member organization, or by indirect unfavorable developments such as personal bankruptcies or criminal prosecution of key personnel, or financial problems of other associated organizations for whom the member organization has no legal responsibility.
        Amendment.
        Amended by SR-FINRA-2008-028 eff. Dec. 15, 2008.
        Amended by SR-FINRA-2019-009 eff. May 8, 2019.

        Selected Notice: 08-57.

      • Rule 408T Discretionary Power in Customers' Accounts

        /01 Automatic Money Market Fund Redemptions

        Member organizations that establish an automatic money market fund redemption program for customers having both a securities and money fund account, wherein the customer may elect to have securities purchases paid for via an automatic liquidation of fund shares, will not be required to obtain a customer's written authorization provided that:
        1) written notice is sent to applicable customers which informs them of the existence of such programs and sets forth the procedures to be followed in order to participate in the program or to elect not to do so, and
        2) such written notice outlines the specific procedures followed by the member organization in effecting automatic redemptions including the steps a customer must take to override the automatic redemption procedure in any specific purchase transaction.
        It should be noted that this interpretation applies only to an established money market fund redemption program and should not be construed to permit member organizations or their associated persons to execute transactions in other types of securities without specified authorization from a customer.

        /02 Identification of Discretionary Orders

        A member organization will be deemed in compliance with the Rule 408T(b) requirement that every order entered on a discretionary basis must be identified as discretionary on the order at the time of entry, if it assigns a specific series of numbers or symbols to its discretionary accounts. All orders entered for such accounts will be considered "identified as discretionary" by the account numbers or symbols unless "DNE" (Discretion Not Exercised) is marked on the order tickets.
        A member organization's written statement of supervisory procedures and compliance manual should reflect such allocation of specific series of numbers or symbols as being assigned to discretionary accounts if such a system is used.
        Amended by SR-FINRA-2019-009 eff. May 8, 2019.

      • Rule 409T Statements of Accounts to Customers

        (a)

        /01 Reserved.
        /02 Information to be Disclosed
        Statements of accounts to customers must clearly and prominently disclose on the front of the statement:
        1. the identity of the introducing and carrying organization and their respective phone numbers for service1;
        2. that the carrying organization is a member of SIPC;
        3. the opening and closing balances for the account.
        /03 Use of Third Party Agents
        Prior to utilizing a "third party agent" to prepare and/or transmit statements of accounts to customers, a member organization shall represent/undertake in writing to the Exchange that:
        1. The third party is acting as agent for the member organization;
        2. the member organization retains responsibility for compliance with Rule 409T(a);
        3. the member organization has developed procedures/controls for reviewing and testing the accuracy of statements of accounts prepared and/or transmitted by the third party agent;
        4. the member organization will retain copies of statements of accounts prepared and/or transmitted by the third party agent in accordance with applicable books and records requirements.
        Allocation of responsibilities for preparation and/or transmissions of statements to any person other than a carrying organization pursuant to an agreement approved by the Exchange in accordance with Exchange Rule 382 (Carrying Agreements) shall be deemed to be utilization of a "third party agent."
        An introducing organization that is a provider of services included in a member organization's statements of accounts may not function as a "third party agent" and may not itself prepare and/or transmit such statements.
        /04 Assets Externally Held and Included on Statements Solely as a Service to Customers
        Where a statement of account includes assets as to which the member organization does not have fiduciary responsibility, does not have access to and which are not included on the member organization's books and records, such assets must be clearly and distinguishably separated on the statement. It must be clearly indicated on the statement that such externally held assets: are included on the statement solely as a courtesy to the customer, information (including valuation) is derived from the customer or other external source for which the member organization is not responsible, and are not covered by SIPC.
        /05 Use of Logos, Trademarks, etc.
        Where the logo, trademark or other similar identification of a person (other than the carrying or introducing organization) appears on a customer account statement, the identity of such person(s) and the relationship to the introducing, carrying or other organization included on the statement must be provided and may not be utilized in a manner which is misleading or causes customer confusion.
        /06 Use of Summary Statements
        Where a member organization carrying a customer's account and another person(s) who separately offers financial related products/services to the same customer (e.g. mutual fund sales/custodial services, banking products/services, insurance products/services, securities products/services, etc.) seek to jointly formulate and/or distribute their respective customer account statements together with a statement summarizing or combing assets held in different accounts ("summary statement"), the Exchange will require:
        1. That the summary statement:
        a. indicate that the "summary statement" is provided for informational purposes and includes assets held at different entities;
        b. identify each entity from which information is provided or assets being held are included, their relationship with each other (e.g., parent, subsidiary or affiliated organization), and their respective functions (introducing/carrying brokerage firms, fund distributor, banking/insurance product providers, etc.);
        c. clearly distinguish between assets held by each entity by use of columns, coloring or other distinct form of demarcation;
        d. identify the customer's account number at each entity2;
        e. provide a telephone number for customer service at each entity2
        f. disclose which entity carries each of the different assets or categories of assets included on the summary;
        g. identify each entity that is a member of SIPC.3
        2. To the extent that the summary statement aggregates the values of the various accounts summarized or portions thereof, such aggregation shall be recognizable as having been arithmetically derived from the separately stated totals or their components.
        3. That the beginning and end of each separate statement (e.g., summary, brokerage, mutual fund, banking, insurance, etc.) be clearly distinguishable by color, pagination or other distinct form of demarcation.
        4. That there be a written agreement between the carrying organization and each other person jointly formulating and/or distributing its respective customer account statements attesting that each such person has developed procedures/controls for reviewing and testing the accuracy of the information included on its respective statements.
        5. That the summary statement shall comply with Rule 409T and all interpretations thereof.

        (b)

        /01 Standards For Holding Mail For Foreign Customers — Rule 409T(b)(2) Waivers
        The Exchange will consider written requests from member organizations for the implementation of policies and procedures for the holding of confirmations, statements and broker-dealer financial statements ("communications") for foreign customers. Requests for waivers under Rule 409T(b) must include the following representations:
        1. that the member organization will obtain not less frequently than annually and will retain (in accordance with SEA Rule 17a-4(b)) a written statement from the customer who has requested such waiver, that it is not feasible for such customer to make alternative arrangements for the regular receipt of these communications and that by reason of inefficient local mail services or unstable political climates, the customer requests that such material temporarily be held on behalf of such customer at the premises of the member organization; and
        2. that the member organization has written procedures in place for the holding of mail that include, at a minimum, that:
        a. frequent supervisory review be conducted of any account for which waivers for transmissions of communications have been obtained, with special attention given to discretionary accounts.
        b. an annual review of the organization's system shall be conducted by the compliance/internal audit department or by the person(s) assigned or delegated such responsibility pursuant to Exchange Rule 342 (independent of the branch office) — such review should encompass a reasonable sampling of account documentation and account activity,
        c. a log of such communications will be maintained at the branch or (principal) sales office servicing the account, which will note the date of direct transmittal of such communications to the customer and where sent, and
        d. the member organization will endeavor to promptly communicate (orally) the substance of the communications directly to the customer and that a written record is kept of all meetings and conversations, etc., with the customer. Communications will be furnished to the customer at the earliest possible meeting.
        Each foreign customer for whom mail is held is required to state, in writing, that it is not feasible to make alternative arrangements for the regular receipt of the mail. In this regard, member organizations shall represent to the Exchange that it will take steps to determine that the foreign customer has no other U.S. location reasonably available for receipt of the communications. In making that determination, member organizations may rely on the customer's statement unless the member or member organization is on notice of facts to the contrary.
        Foreign customer accounts for which mail is held require frequent supervisory review by the member organization, i.e., a higher level of supervision and monitoring than is accorded other accounts. Additionally, the annual review conducted by the compliance/internal audit department (or other person(s) delegated such responsibility) must include a determination as to whether all the foreign customer communications are retained pursuant to written customer instructions.
        The foreign customer communications held in accordance with a waiver under 409T(b)(2) shall be made available to the customer for review at all times and at no special cost.

        1 The SEC has stated that under the SEA Rule 15c3-1(a)(2)(iv), certain carrying firms must issue customer account statements, and the account statements must contain the name and telephone number of a person at the carrying firm who the customer can contact with inquiries regarding the account (See SEA Release No. 34-31511, dated November 24, 1992). The phone number of the carrying organization may appear on the back of the statement. If it does, it must be in "bold" or "highlighted" letters.

        2 If the client's account number and the customer service telephone number at each entity are included on their respective account statements, such information need not be included on the summary statement.

        3 See, e.g., SIPC Bylaws (Article II) for possible ways to identify SIPC membership by using SIPC statements or symbols.

        Amended by SR-FINRA-2011-024 eff. Aug. 1, 2011.
        Amended by SR-FINRA-2010-061 eff. Aug. 1, 2011.
        Amended by SR-FINRA-2019-009 eff. May 8, 2019.

        Selected Notice: 11-26.

      • Rule 435(5)T Circulation of Rumors

        /01 Responsibility of Personnel
        Rule 435(5)T, which prohibits the circulation of rumors, extends personal responsibility for its observation to all member organization personnel. Those who service accounts, those who are handling the member organization's long distance wires and those on the trading desks must in particular exercise a high degree of individual responsibility as their conversations are less likely to receive the same degree of supervisory oversight as written messages.
        Amended by SR-FINRA-2019-009 eff. May 8, 2019.