Chaperone Agreement Broker Dealer

Chaperone Agreement Broker Dealer

The scope of Rule 15a-6 has been expanded over the years by a series of unrelated letters without action, including the «letter from seven companies» and the «letter from nine companies.» The «Seven Firms Letter» of January 30, 1996 granted facilities to foreign brokers who trade in non-U.S. securities with U.S.-based trustees, such as investment advisors, on behalf of non-U.S. clients. [4] It acknowledged that offshore clients did not expect the requirements of U.S. brokers to be applied to their non-U.S. securities transactions simply because their accounts are managed by U.S.-based trustees. As a result, foreign brokers are allowed to trade in non-U.S. securities with U.S.-based trustees for offshore clients, either without registering as brokers in the United States or without conducting transactions through a U.S.-registered broker, in accordance with the general rule. [5] U.S. regulators have sued foreign brokers for illegal transactions in the United States. In 2012, a remarkable complaint was filed against a number of Indian brokers who do not have good brokerage arrangements de Chaperone.

See the 2012-241 SEC Press Release «SEC Charges India-based Brokerage Firms with Violating U.S. Registration Requirements» of November 27, 2012. See SEC Press Release 2014-39 «Credit Suisse agrees to pay US$196 million and acknowledges misconduct in the provision of unregistered services to U.S. customers» from February 21, 2014. In the face of these enforcement measures, foreign brokers must ensure that they and their American companions follow the rules. Question 8.1: Does the answer to question 8 mean that a foreign broker should have a cover agreement with a registered broker to rely on the Seven Firms Letter? Despite the useful guidelines in the FAQs, compliance with Rule 15a-6 remains complex, especially given the many companies managed around the world by companies that are generally considered «foreign broker-dealers». Therefore, foreign brokers who wish to benefit from the benefits of Rule 15a-6 should continue to pay close attention to the material and mechanical aspects of the rule.

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