15A-6 Chaperoning Agreement

The scope of Rule 15a-6 has been expanded over the years by a number of related letters of no action, in particular the „Letter from the Seven Undertakings“ and the „Letter from the Nine Undertakings“. The Letter from the Seven Companies, issued on January 30, 1996, provided relief to foreign broker-dealers who transact 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 foreign clients would not reasonably expect the requirements of U.S. broker-dealers to apply to their transactions in non-U.S. securities simply because their accounts were managed by U.S.-based trustees. Therefore, foreign broker-dealers are allowed to transact in non-U.S. securities with U.S.-based trustees for foreign clients without registering as a broker-dealer in the U.S. or conducting the transactions through a U.S.-registered broker-dealer in accordance with the rule.

[5] Answer: Determining whether a foreign person temporarily resides in the United States ultimately depends on the specific facts and circumstances of the situation in question.10 However, the SEC noted in Rule 15a-6 Adopt Release that a foreign person who is not otherwise considered a resident of the United States under applicable law is deemed to be otherwise a resident of the United States for the purposes of Rule 15a-6(a)(4)(iii) that he resides temporarily in that country.11 11 See rule 15a-6 Discharge of the Assumption at FR 54 30030. This presumption would be rebutted in light of all the facts and circumstances surrounding the foreign person`s presence in the United States. SEC staff have already taken certain positions to facilitate the usefulness of the rule in light of practical issues. For example, seven Firms` letter allowed foreign comics to solicit and transact „foreign securities“[11] with non-U.S. citizens. Accounts receivable held by U.S. trustees, such as . B investment advisors, outside of accompanying arrangements. Answer: No. An introductory broker-dealer cannot invoke the exemption of Rule 15c3-3(k)(2)(i) and maintain a net capital of $100,000 while acting as a companion of a foreign broker-dealer under Rule 15a-6(a)(3) and relying on the letter of the nine companies. The general staff opinion with respect to the term „U.S. major institutional investor“ applies to all provisions of Rule 15a-6, including paragraphs (a)(2) and (a)(3) of rule.19 Answer: Yes.

To the extent required by foreign law or a company`s internal policies and procedures for its global operations, a foreign broker-dealer may send confirmations and account statements directly to U.S. counterparties. However, notwithstanding the issuance of a document to the investor by the foreign broker-dealer, the accompanying broker-dealer is required to ensure that the investor receives confirmations and account statements that comply with all applicable U.S. requirements, including Rule 10b-10 of the Exchange Act and applicable self-regulatory organizations. In addition, any confirmation or statement sent by a foreign broker-dealer to a U.S. counterparty on behalf of an accompanying broker-dealer must uniquely identify the U.S. broker-dealer on whose behalf the document is sent. Despite the helpful guidance contained in the FAQ, compliance with Rule 15a-6 remains complex, especially given the many different activities conducted around the world by companies that qualify as „foreign broker-dealers“ under the rule.

Therefore, foreign broker-dealers who wish to avail themselves of Rule 15a-6 should continue to pay particular attention to the material and mechanical aspects of the Rule. Answer: Yes. Rule 15a-6(a)(2) allows a foreign broker-dealer to provide research reports to large U.S. institutional investors and to transact with the securities mentioned in the dealings with or for those large U.S. institutional investors, provided that certain conditions are met.17 The rule does not require that the distribution be made by a registered broker-dealer. even if the foreign broker-dealer has an accompanying agreement with a registered broker-dealer. In addition, the supervising broker-dealer would have no obligation with respect to a research report if the accompanying broker-dealer was not involved in the distribution (i.e., if the research was distributed directly from the foreign broker-dealer to large U.S. institutional investors) and would not be required to keep a copy of a research report that it never owned. [16] The relationship described in Rule 15a-6(a)(3) requires a relationship between the foreign broker-dealer and a broker-dealer registered in the United States to, among other things, (a) conduct transactions under Rule 15a-6 (except to negotiate their terms), (b) provide the U.S. investor with all necessary confirmations and statements, and (c) maintain the necessary books and records of transactions. and (d) obtain from the foreign broker certain personal and professional information about any person associated with the foreign country, including consent to service of the proceeding. (back) Pursuant to Rule 15a-6(a)(4)(iii), a foreign broker-dealer may solicit transactions from non-U.S.

persons who are temporarily resident in the United States and with whom the foreign broker-dealer already had an existing relationship. The question asked of staff was whether a person who was in the United States for a limited period of time (p.B for employment or training purposes) and who confirms a pre-existing relationship with a foreign broker-dealer can be considered „temporarily present“ for the purposes of the rule. While it is recognized that these findings are factual, staff are of the view that under the exception in Rule 15a-6(a)(4)(iii), a foreign broker-dealer may transact with such a person as long as that person (i) is not a U.S. citizen and (ii) is not a lawful permanent resident of the United States (i.e., . . .