Section 26-B101. INTERNET COMMUNICATIONS

 

101.1Broker-dealers and agents who use the Internet to distribute information on available products and services through communications made on the Internet directed generally to anyone having access to the Internet, and transmitted through Internet communications shall not be considered to be transacting business "in the District" for purposes of the Securities Act of 2000 (D.C. Law 13-203, 47 DCR 7387) ("the Act"), provided that:

 

(a)The Internet communication contains a legend in which it is clearly stated that:

 

(1)The broker-dealer or agent in question may only transact business in the District if licensed, excluded, or exempted from broker-dealer or agent licensing requirements; and,

 

(2)Follow-up, individualized responses to persons in the District by the broker-dealer or agent that involve either effecting or attempting to effect transactions in securities, or rendering of personalized investment advice for compensation, will not be made without compliance with broker-dealer or agent licensing requirements, or an applicable exemption or exclusion; and,

 

(b)The Internet communication contains a mechanism which includes, but is not limited to, technical "firewalls" or other implemented policies and procedures, designed reasonably to ensure that before any subsequent, direct communication with prospective customers or clients in the District, the broker-dealer and agent are first licensed in the District or qualify for an exemption or exclusion from the licensing requirement; and,

 

(c)The Internet communication is limited to the dissemination of general information on products and services and does not involve either effecting or attempting to effect transactions in securities, or rendering personalized investment advice for compensation in the District over the Internet; and,

 

(d)With respect to agent Internet communications:

 

(1)The broker-dealer affiliation of the agent is prominently disclosed within the Internet communication;

 

(2)The broker-dealer with whom the agent is associated retains responsibility for reviewing and approving the content of any Internet communication by an agent;

 

(3)The broker-dealer with whom the agent is associated first authorizes the distribution of information on the particular products and services through the Internet communication; and

 

(4)When disseminating information through the Internet communication, the agent acts within the scope of the authority granted by the broker-dealer.

 

source

Final Rulemaking published at 40 DCR 6732 (September 24, 1993); as amended by Emergency Rulemaking published at 48 DCR 1987 (March 2, 2001) [EXPIRED]; as amended by Final Rulemaking published at 48 DCR 4106 (May 11, 2001).