RCA - July 1996 - Ask The Analyst - Securities Business In Financial Institutions

Q: Suppose a member firm conducts a securities business in a bank and intends to prepare a joint communication with the bank. Assuming the member firm can assure that its part of the communication complies with the Rules, what responsibility, if any, does the member firm have for the bank's portion of the piece? For example, would the member be responsible for a discussion of mutual funds and government securities offered by the bank trust department to its trust clients?

A: The member firm bears responsibility for those portions of the communication that promote its securities business. In the example, the member firm would not be responsible for the bank trust department's discussion of securities in the joint communication. However, the Rules obligate the member firm to assure that the communication clearly distinguishes those securities products and services the member firm offers from those offered by the bank trust department.