Question

An agent of a broker-dealer puts up a website that promotes the benefits of dollar cost averaging, including the caveat that it is suitable for investors only if they can maintain their periodic payments regardless of economic conditions and that it requires a long-term investment time horizon. If the website is viewed by an individual in another State where both the broker-dealer and agent are not registered, which disclosures are required on the site in order not to be in violation of the Uniform Securities Act in that State?

Answer 1

Answer:

"The broker-dealer or agent may only transact business in the State if registered in the State or if exempted or excluded from registration" and "Follow ups or individualized responses to persons in the State that involve either effecting or attempting to effect transactions in securities will not be made absent compliance with State registration requirements or an applicable exemption or exclusion"

Explanation:

Uniform securities act is a state level regulation of transactions in securities at the state level. It effectively prevents securities fraud and contributes to Securities and Exchange Commission (SEC) function of enforcing regulation.

Registration is required when there are initial publica offerings. Registration is also required from agents such as broker dealers and investment advisers.

In this case an agent of a broker-dealer puts up a website that promotes the benefits of dollar cost averaging, including the caveat that it is suitable for investors only if they can maintain their periodic payments regardless of economic conditions and that it requires a long-term investment time horizon.

There is need for disclosure in a state where the agent is not registered. So that when clients view the website they do not violate the Uniform Securities Act.

The disclosure chosen above is sufficient to cover the agent