BRANCH OFFICE INSPECTION CHECKLIST

Transcription

1 BRANCH OFFICE INSPECTION CHECKLIST MANAGER DATE EXAMINER OSJ PRINCIPAL IN CHARGE OF THIS LOCATION: PERSON WHO CAN EXPLAIN RECORDS AT THIS LOCATION: I. Files A. Representative Files 1. Is there on file for each representative and prospective representative: a. A copy of FINRA and state License information (U-4) b. A copy of U-5 from previous firm (if applicable) c. A copy of a signed applicant affidavit, acknowledging that no solicitation will be made until prospect is fully licensed d. Other correspondence relating to that representative B. Office Records and Customer Files 1. Are there, for all of the Branch Office clients, of both the manager and representatives, files containing: New Account Form Order Ticket for each purchase/sale Confirmation or Receipt of Order for each purchase/sale Copies of Correspondence to and from each customer Copies of Confirmations from Issuers Customer Holding Record 2. Are there Office Files Containing: Cash/Checks Received/Disbursed Blotter Are copies of both sides of the check attached to the blotter? Page 1

2 Were any checks held overnight? If yes, were they forwarded by ON the next business day? Securities Received/Delivered Blotter Were copies of Securities Certificates and other documentation attached to the Blotter? Were any securities held overnight? If yes, were they forwarded by ON the next business day? 3. Advertisements and Sales Literature Have all Advertisements and Sales Literature been by a Principal? 4. Changes in Address or Account Information Has all documentation requesting any change to account information been forwarded to the Main Office Location for processing? C. Complaint File 1. Is a complaint file maintained? (A complaint is any written or verbal notice of displeasure with the firm, any of its' representatives, a custodian bank or an issuer) Page 2

3 2. Does the complaint file contain 1) actual correspondence or 2) a list of complaints cross-referenced to a customer's file? Provide a brief summary of any complaints found in the complaint file. D. Correspondence, Advertising and Sales Literature 1. Have all the investor prospecting and salesman-recruiting ads published in newspapers or magazines been given separate approval from the Home Office? 2. Have all of the mass-mailing pieces been given separate approval from the Home Office? 3. Are copies of all correspondence periodically sent to the Home Office? 4. Are any other forms of communication with the public used by the office? If so, please explain or attach a sample. E. Seminars 1. Have any Seminars been presented by anyone at this location? If Yes, Do Seminar files contain the following: Invitation Invitee List List of Attendees Page 3

4 Outline of Seminar Handout Materials F. Cold Calling and Do Not Call Lists 1. Does anyone at this location cold call individuals? 2. Are individuals at this location utilizing the Firm Do Not Call Procedures? II. Office Procedures A. Supervision 1. Does the Branch Manager supervise the activities of his representatives by: (CHECK ALL THAT APPLY) a. Accompanying them on sales calls b. Contacting their clients if deemed necessary c. Reviewing their client files d. Holding sales meetings e. Reviewing and initializing incoming and outgoing correspondence, order forms, applications, etc. f. Other B. Publications 1. Is there a copy of the following publications on file in your office: a. NASD Manual b. MSRB Manual c. Written Supervisory Procedures C. Supplies 1. Product Prospectuses 2. Order Forms 3. New Account Forms (NAF) 4. Supply Order Forms 5. Correction Forms Page 4

5 6. Account Information Change Forms 7. Stationery with proper letterhead (Attach sample) 8. Business Cards (Attach sample) D. Telephone Listing 1. How is your office listed in the telephone directory: a. Yellow Pages (Attach copy) b. White Pages (Attach copy) E. Office Identification 1. How do you identify your office as a branch of : a. On the outside of the building b. On the building directory c. On the window or door F. Signage 1. Does the office display the appropriate signage? a. SIPC Sign G. Web Sites 1. Does any registered person at this location have a personal web site? If yes, please give web address: H. Outside Business Activities 1. Does any registered person at this location have an outside business activity? If yes, please list below and verify prior approval of the activity: Page 5

6 I. Outside Accounts 1. Does any registered person at this location have accounts at other Broker Dealers? If yes, please list individual s name and verify approval with Home Office J. Reports to Investors 1. Does your office use a form to report results to clients? If yes, attach a copy. K. Contract Examination 1. Are any contractual commitments of the branch office in some name other than that of? a. Office Lease b. Equipment Leases c. Advertising Contracts d. Supply Agreements (Stationery business cards, etc.) Page 6

7 e. Secretarial and clerical contracts f. Telephone If other than WRIS, Please provide copy of current contract. L. Order Processing 1. Does the Manager take steps to insure that orders are transmitted as rapidly as possible and that payments and securities are transmitted in a timely manner? 2. If the Branch Office engages in stock and bond business, has the Manager established an efficient system of monitoring open orders? M. OSJ Branch Offices (For branches which have supervisory jurisdiction over other branches.) 1. Does the OSJ Manager periodically review the operations of subordinate Branch Offices? If yes, please attach copy of latest report 2. Has the OSJ Manager established a follow-up procedure to insure that deficiencies noted in supervisory reviews are remedied in an efficient and effective manner? N. Location Information 1. Is the office located on the premises of a Financial Institution? If yes, contact Home Office for Additional checklist. Page 7

8 2. Does anyone at this location utilize Locations of Convenience? If Yes, Please list all Locations of Convenience used: III. Products Recommended by the Branch A. Which Products are Offered by the Branch Location? Mutual Funds Commodity Pools Public Offerings Commodity Pools Private Placements Registered Investment Companies Closed Ended Investment Advisory Services B. Mutual Funds If Mutual Funds are recommended: a. Have there been any Switches? b. If Yes, Was the Switch: PRIOR to transaction? Was Switch Letter Sent to Customer? Page 8

9 PLEASE LIST SAMPLING OF MUTUAL FUND TRANSACTIONS/FILES REVIEWED FOR EACH TRANSACTION/FILE PLEASE TE THE FOLLOWING ITEMS: (REPORT RESULTS ON SEPARATE SHEET AND ATTACH TO CHECKLIST) Breakpoint Analysis Completed Mutual Fund Calculator Utilized Class Shares Reviewed with Customer Notes of Client Conversations C. Variable Products PLEASE LIST SAMPLING OF VA TRANSACTIONS/FILES REVIEWED FOR EACH TRANSACTION/FILE, PLEASE TE THE FOLLOWING ITEMS: (REPORT RESULTS ON SEPARATE SHEET AND ATTACH TO CHECKLIST) Page 9

10 Variable Annuity Pre-Sale Form Completed Signed by Rep Signed by Principal Variable Annuity Exchange Form: Completed Signed by Rep Signed by Principal D. Municipal Securities and 529 Plans LIST OF TRANSACTIONS/FILES REVIEWED For Municipal Securities: Account Form by Municipal Principal? Transactions by Municipal Principal? For 529 Plans Application Form by Municipal Principal? Transactions by Municipal Principal? Prospectus Delivery Noted on 529 Blotter? Page 10

11 Does the Customer Live in the State of the Plan? E. Options LIST OF OPTIONS TRANSACTIONS/FILES REVIEWED (Note Options Level Approval): Account Documents by Options Principal? Transactions by Options Principal? Account Prior to First Transaction? III. Areas of Special Concern and Attention A. Does the office charge any type of fees to clients for any service? If yes, give details on a separate sheet. B. Has this office or any representative in it participated in the sale of any product that could be considered a security without receiving prior Home Office approval? Page 11

12 C. Is this office familiar with the company's policy regarding the sale of non-approved products? D. Are there any complaints in the complaint file you would consider significant? If yes, give details. E. Does the manager or any representative in the branch office handle tangible or hard asset transactions? COMMENTS AND TES: DATE: BRANCH OFFICE MANAGER EXAMINER Page 12