Minimum requirements under NASD Rule 3010 if a member centralizes its supervisory oversight function over the firm's employees who are both acting as registered representatives and as investment advisers.
August 9, 1996
This letter is in follow-up to our July 30, 1996, telephone conversation and your letter of August 1, 1996. Based on the facts discussed on July 30 and recited in your letter, it is within the parameters of Rule 3010 (formerly Article III, Section 27 of the Rules of Fair Practice) for [Broker/dealer] to centralize its supervisory oversight of RR/IA activity. As we discussed, [Broker/dealer] supervisory procedures for this area of its business must be written and should clearly articulate the manner in which the supervision will be implemented and identify the principal in charge of RR/IA oversight. Additionally, a branch office principal or manager must understand his or her obligations to remain vigilant and report to [Broker/dealer] central oversight location any conduct known or believed to be problematic, even if outside of his or her specified scope of supervisory responsibility.
Very truly yours,
Daniel M. Sibears, Esq.