* See Memorandum to Investment Advisers Committee No. 10-97 and to State Liaison Committee No. 3-97, dated
February 13, 1997.
March 13, 1997
TO: INVESTMENT ADVISERS COMMITTEE No. 12-97
STATE LIAISON COMMITTEE No. 5-97
RE: INSTITUTE COMMENTS ON MASSACHUSETTS RULE PROPOSAL
______________________________________________________________________________
As we previously informed you, in February the Massachusetts Securities Division
proposed for comment amendments to rules under the Massachusetts Uniform Securities Act
that would revise and update various rules under the Act relating to broker-dealers, investment
advisers, and their agents.* Several of the rule revisions are intended to accommodate
provisions from the National Securities Markets Improvement Act of 1996 ("NSMIA").
Attached is a copy of the comment letter the Institute filed with the Division.
In its letter, the Institute recommends that the Division amend its proposal to:
Exclude from the definition of "agent" those agents of a broker-dealer who effect
de minimis transactions as permitted by the amendments in NSMIA to the Securities
Exchange Act of 1934;
Clarify the requirement that broker-dealers file a copy of their FOCUS report with the
Division;
Ensure that the Division’s ability to "restrict or condition" a broker-dealer’s business not be
exercised in a manner that would be inconsistent with NSMIA;
Expand the examination options available to supervisors of broker-dealers and to
investment adviser representatives;
Delete provisions relating to the use of supplementary sales materials;
Limit provisions governing maintenance of customer complaints, the delivery of customer
account statements, and the maintenance of a list of customers who do not want to be
solicited, to be consistent with NSMIA;
Clarify certain exclusions from the definition of "broker-dealer";
Replace the Division’s current manual exemption with the Revised Manual Exemption as
adopted by NASAA in 1996. [The major difference between the current exemption and the
revised exemption is that the revised exemption is available to issuers if information
concerning their offering is available through the SEC’s EDGAR system.]; and
Amend the exemption for internet offerings to permit such offerings if a notice filing has
been filed with the Division.
Tamara Cain Reed
Associate Counsel
Attachment (in .pdf format)
Note: Not all recipients of this memo will receive an attachment. If you wish to obtain a copy
of the attachment referred to in this memo, please call the Institute’s Information Resource
Center at (202)326-8304, and ask for this memo’s attachment number: 8721.