Comments on NASD Notice to Members 04-55

Dear Sir or Madam:

 

I am writing to comment on the proposed new Form BR.

 

Under item number 2, the form states that "[a]ny application submitted without a supervisor/person-in-charge is deemed an incomplete application and may not receive final approval." Does this mean that a firm must designate someone at each branch office location as a Person-In-Charge?

 

For example, two representatives share an office space while acting independently of each other (i.e., they do not have common clients or share commissions), neither has a principal's license, neither has any control over or interest in the other's business, and both are assigned to a supervising principal located at an OSJ office.

 

In a situation where an office location has only one representative, must that representative be designated as the Person-In-Charge?

 

Will there be instructions provided on how to complete Form BR? Specifically, what information goes in the boxes marked:
   -Type
   -Disclosure
   -SD
   -Independent Contractor


Under item number 4, the second question reads: "Is this a business location that will operate pursuant to a written agreement or contract (other than an insurance agency agreement) with the main office?" Does the term 'business location' refer to the financial institution? Does the term 'main office' refer to the broker-dealer? Does the written agreement or contract refer to an agreement or contract between the broker-dealer and financial institution?

 

In the third sentence, to whom does the terms 'business location' and 'main office' refer?

 

In sentence number five, does the question refer only to expenses associated with the branch office location?

 

In sentence number six, does the question include costs associated with the office space located on the premises of a financial institution (e.g., utilities and rent) that the bank pays--in other words, the bank does not charge the broker-dealer rent or prorate the utilities?

 

NASD should consider re-writing the questions to clarify what information is being sought and the parties to whom each question refers.

 

Under the Explanation of Terms, a Supervisor is defined in part as someone physically located at an OSJ. Does this mean that a representative with a principal's license located at a non-OSJ branch office who is designated by the broker-dealer as a supervising principal is not considered a 'supervisor' for the purposes of Form BR?

 

Ric Bennett
Compliance Department
Signal Securities, Inc.
700 Throckmorton Street
Fort Worth, Texas 76102
817.820.1210