2024 SEC Certification Webinar PDF

Securities Regulation Code (SRC) Rules on Business Conduct Atty. Oliver O. Leonardo Director, Markets and Securities Regulation Department DISCLAIMER: Views expressed herein are those of the author. They do not necessarily reflect the views of the Securities and Exchange Commission, or other staf...

Securities Regulation Code (SRC) Rules on Business Conduct Atty. Oliver O. Leonardo Director, Markets and Securities Regulation Department DISCLAIMER: Views expressed herein are those of the author. They do not necessarily reflect the views of the Securities and Exchange Commission, or other staff members of the Commission. This presentation is intended for this seminar only and should not be published, reproduced nor disseminated in any manner without permission from the presenter/author. 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) SRC RULES ON BUSINESS CONDUCT OBJECTIVE: Upon completion, attendees are expected to understand: The Ethical Standard Rules Suitability Rule Confirmation of Orders Customer Account Statements Other SRC Rules that pertain to dealing with customers and investing public 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) History of Business Conduct Rules In 1990, the Technical Committee of IOSCO published the” International Conduct of Business Principles containing 7 rules of conduct or set of principles of ethical conduct for all of its member countries. 1. Honest and Fairness 2. Diligence 3. Capabilities 4. Information about Customers 5. Information for Customer 6. Conflict of Interest 7. Compliance 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) Conduct of Business Principles Those principles of conduct which should govern the activities of those who provide financial services and which have the objective of protecting the interests of their customers and the integrity of the market. Market intermediaries should conduct themselves in a way that protects the interests of their clients and helps to preserve the integrity of the market. 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I. SRC Rule 30.2 – Transactions and Responsibilities of Broker Dealers 1. Ethical Standard Rule 2. Confirmation of Customer Order 3. Client Agreement 4. Suitability Rule II. SRC Rule 52.1.8 – Customer Account Statements III. SRC Rule 30.2.5 – Commissions and Charges for Services Performed by a Broker Dealer IV. SRC Rule 52.1.9 – Customer Complaint Rule Others V. Others 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I. 1 Ethical Standard Rule ( SRC Rule 30.2.1) 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I.1 Ethical Standard Rule ( SRC Rule 30.2.1) Honesty and Fairness In conducting his business activities, a registered person shall act honestly, fairly and in the best interest of his client and for the integrity of the market. In advising or acting on behalf of a client, he shall ensure at all times that any representations or other communications made and information provided to the client are accurate and not misleading, and do not violate SRC Rule 24.1(d). 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I.1 Ethical Standard Rule ( SRC Rule 30.2.1) (1) Honesty and Fairness ……and do not violate SRC Rule 24.1(d). A. All communications with the public shall be based on principles of fair dealing and good faith and they should provide a sound basis for evaluating the facts in regard to any particular security or securities or type of security, industry discussed, or service offered. No material fact or qualification may be omitted if the omission, in the light of the context of the material presented, would cause the advertising or sales literature to be misleading. 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I.1 Ethical Standard Rule ( SRC Rule 30.2.1) (1) Honesty and Fairness ……and do not violate SRC Rule 24.1(d). B. Exaggerated, unwarranted or misleading statements or claims are prohibited in all public communications of registered persons. In preparing such literature, it must be borne in mind by registered persons that inherent in investment are the risks of fluctuating prices and the uncertainty of dividends, rates of return and yield, and Thus, no registered person shall, directly or indirectly, publish, circulate or distribute any public communication that he knows, or had reason to know, contains any untrue statement of a material fact or is otherwise false or misleading. 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I.1 Ethical Standard Rule ( SRC Rule 30.2.1) (1) Honesty and Fairness ……and do not violate SRC Rule 24.1(d). C. Communications with the public shall not contain: i. promises of specific results, exaggerated or unwarranted claims or unwarranted superlatives, ii. opinions for which there is no reasonable basis, or iii. forecasts of future events which are unwarranted, or which are not clearly labeled as forecasts. 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I.1 Ethical Standard Rule ( SRC Rule 30.2.1) (1) Honesty and Fairness ……and do not violate SRC Rule 24.1(d). D. In judging whether a communication or a particular element of a communication may be misleading, several factors should be considered, including but not limited to: a. Overall Context b. Audience c. Overall Clarity 1. the overall context in which the statement or statements are made. A statement made in one context may be misleading even though such a statement could be perfectly appropriate in another context. An essential test in this regard is the balance of treatment of risks and potential benefits; 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I.1 Ethical Standard Rule ( SRC Rule 30.2.1) (1) Honesty and Fairness ……and do not violate SRC Rule 24.1(d). D. …..: a. Overall Context b. Audience c. Overall Clarity 2. the audience to which the communication is directed. Different levels of explanation or detail may be necessary depending on the audience to which a communication is directed and the ability of the registered person given the nature of the media used, to restrict the audience appropriately. If the statements made in a communication would be applicable only to a limited audience, or if additional information might be necessary for other audiences, it should be kept in mind that it is not always possible to restrict the readership of a particular communication; and/or 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I.1 Ethical Standard Rule ( SRC Rule 30.2.1) (1) Honesty and Fairness ……and do not violate SRC Rule 24.1(d). D. …..: a. Overall Context b. Audience c. Overall Clarity 3. the overall clarity of the communication. A statement or disclosure made in an unclear manner obviously can result in a lack of understanding of the statement, or in a serious misunderstanding. A complex or overly technical explanation may be worse than too little information. Likewise material disclosure relegated to legends or footnotes realistically may not enhance the reader's understanding of the communication. 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I.1 Ethical Standard Rule ( SRC Rule 30.2.1) (2) Diligence A registered person should act with due skill, care and diligence, in the best interests of his clients and the integrity of the market. 1) One shall take all reasonable steps to execute promptly client orders in accordance with the instruction of clients (Prompt Execution Rule). 2) One shall always execute client orders on the best available terms in compliance with SRC Rule 30.2.13 (Best Execution Rule). 3) One shall ensure that done transactions are promptly and fairly allocated to the accounts of the clients. 4) When providing advice to a client, one shall act diligently and ensure that his advice and recommendations in relation to clients are based on thorough analysis and take into account available alternatives. 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I.1 Ethical Standard Rule ( SRC Rule 30.2.1) (3) Capabilities a)One shall employ or appoint qualified persons only. The person should have relevant training or experience to act in the capacity so employed or appointed in compliance with SRC Rules 28.1 and 28.2. 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I.1 Ethical Standard Rule ( SRC Rule 30.2.1) (3) Capabilities b)One shall ensure that at all times, pursuant to SRC Rule 30.2.6 he has: 1. adequate resources to supervise diligently; and 2. satisfactory internal control procedures and financial and operational capabilities which can be reasonably expected to protect his operations, his clients and other registered persons from financial loss arising from the theft, fraud and other dishonest acts, professional misconduct or omissions. 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I.1 Ethical Standard Rule (SRC Rule 30.2.1) (4) Information About Clients a)One should seek relevant information from his clients pursuant to SRC rule 52.1. 6 (Customer Account Information Rule), specifically: 1. financial situation 2. investment experience and 3. investment objectives 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I.1 Ethical Standard Rule ( SRC Rule 30.2.1) (4) Information About Clients b) Information obtained from clients shall be treated with utmost confidentiality and shall not be disclosed to unauthorized persons; Provided that, such treatment of confidentiality shall not apply to the Commission, SROs, Exchanges, clearing agencies, depositories and their authorized representatives that exercise regulatory and supervisory responsibilities, or to any order issued by the Commission pursuant to SRC Rule 30.2.9. All requests for information by the Commission about trading activities shall be complied with strictly by the registered persons in a form and style prescribed by the Commission, notwithstanding any confidentiality agreement between and among the registered persons and clients. 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I.1 Ethical Standard Rule ( SRC Rule 30.2.1) (4) Information About Clients c) One shall take all reasonable steps to establish the true and full identity of each of his clients, their financial situation, investment experience, and investment objectives. d)Based on the above information and other circumstances which the registered person is or should be aware of through the exercise of due diligence, the registered person shall, when making a recommendation or solicitation, ensure the suitability of such recommendation or solicitation for that client is reasonable in all circumstances pursuant to SRC Rule 30.2.4 (Suitability Rule). 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I.1 Ethical Standard Rule ( SRC Rule 30.2.1) (4) Information About Clients e) One who provides services to any client, in relation to derivatives, including options and warrants, or any leveraged transaction, shall assure himself that the client understands the nature and risks of these instruments and has sufficient net worth to be able to assume the risks and bear the potential losses of trading in such instruments. 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I.1 Ethical Standard Rule ( SRC Rule 30.2.1) (4) Information About Clients f) One shall be satisfied on reasonable grounds about the identity, address and contact details of the person ultimately responsible for originating the instruction in relation to a transaction, the person who stands to gain the commercial or economic benefit of the transaction and/or bears the commercial or economic risk; provided, however, that in relation to an investment company, or discretionary account, the person referred to above is the investment company or account, not those who hold a beneficial interest therein. 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I.1 Ethical Standard Rule ( SRC Rule 30.2.1) (4) Information About Clients g)One shall keep in the Philippines a record of the details referred to above and provide the Commission with access to those records upon request pursuant to Section 52 of the SRC and SRC Rule 52.1.1. (Books and Records Rule) h) As required in SRC Rule 30.2.4 (Suitability Rule), a registered person shall not do any thing to effect a transaction unless he has first complied with the requirements of this Rule. 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I.1 Ethical Standard Rule ( SRC Rule 30.2.1) (5) Information For Clients A registered person shall make adequate disclosure of material information in his dealings with his clients. a) One shall ensure that a written agreement which complies with SRC Rule 30.2.3 (Client Agreement Rule) is entered into with a client before any services are provided to that client. b) One shall provide clients with adequate information about his firm, including his business address, any relevant conditions or restrictions under which the registered person conducts his business, and the identity or status of employees and others acting on his behalf with whom the client may have contact. 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I.1 Ethical Standard Rule ( SRC Rule 30.2.1) (5) Information For Clients A registered person shall make adequate disclosure of material information in his dealings with his clients. c) After one has effected a transaction for a client, he shall endeavor to confirm promptly with the client, in writing, the essential features of the transaction pursuant to SRC Rule 30.2 (Confirmation of Customer Orders Rule) d) One shall comply with SRC Rule 52-1.8, regarding customer account statements (Customer Account Statement Rule). 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I.1 Ethical Standard Rule ( SRC Rule 30.2.1) (5) Information For Clients A registered person shall make adequate disclosure of material information in his dealings with his clients. e) One shall disclose the financial condition of his business to a client upon request by providing a copy of the most recent report required to be filed with the Commission under 1. SRC Rule 52.1.5 (Audited Financial Statements) and 2. SRC Rule 49.1 Risk Based Capital Adequacy Report (Net Capital) and disclose any material changes which adversely affect the registered person’s financial condition after the date of such filing. 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I.1 Ethical Standard Rule ( SRC Rule 30.2.1) (6) Conflicts of Interest A registered person should avoid conflicts of interest and when they cannot be avoided, should ensure that his clients are fairly treated and properly informed of such conflicts of interest. a) Client priority - A registered person shall handle orders of clients fairly and in the order in which they are received in compliance with SRC Rule 34.1 (“Customer First” Policy). 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I.1 Ethical Standard Rule ( SRC Rule 30.2.1) (6) Conflicts of Interest b) Conflicts of Interest - Where a registered person has a material interest in a transaction with or for a client, or a relationship which gives rise to an actual or potential conflict of interest in relation to such transaction, he shall neither advise, nor deal in relation to the transaction unless he has disclosed that material interest or conflict to the client and has taken all reasonable steps to ensure fair treatment of the client 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I.1 Ethical Standard Rule ( SRC Rule 30.2.1) (6) Conflicts of Interest c) Client Assets – A registered person shall, in the handling of client transactions and assets, act to ensure that client assets are accounted for properly and promptly and comply with SRC Rule 52.1.10 (Monthly Securities Count Rule). Where the registered person, or a third party on behalf of the registered person, is in possession or control of client positions or assets, the registered person shall ensure that client positions or assets are adequately safeguarded. 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I.1 Ethical Standard Rule ( SRC Rule 30.2.1) (7) Compliance A registered person shall comply with all regulatory requirements applicable to the conduct of his business activities so as to promote the best interest of clients and the integrity of the market. a) A registered person shall comply with the Code, rules and regulations adopted thereunder, and rules of any Exchange, clearing agency, or other SRO, of which he is a member of or participant. 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I.1 Ethical Standard Rule ( SRC Rule 30.2.1) (7) Compliance b) A registered person shall have a policy, which has been communicated to employees in writing, on whether employees are permitted to deal for their own accounts in securities. If employees are permitted to deal, the conditions on which they may do so, including those imposed under SRC Rule 34.1.1 (“Customer First” Policy), shall be set out in writing and communicated to each employee. 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I.1 Ethical Standard Rule ( SRC Rule 30.2.1) (7) Compliance c) A registered person shall ensure that complaints from clients relating to his business are adequately addressed in compliance with SRC Rule 30.2.6.2.7 (BD System of Supervision) and sufficient records of such complaints are made in compliance with SRC Rule 52.1.9 (Customer Complaint Rule). d) A registered person shall at all times be responsible for the acts or omissions of his employees and agents in respect to the conduct of his business, pursuant to Section 51 of the Code (Liabilities of Controlling Persons, Aider, Abettor and Other Secondary Liability). e) All registered persons, as a condition of their registration, shall undertake in writing to uphold the Code, and rules and regulations adopted thereunder. 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I. SRC Rule 30.2 – Transactions and Responsibilities of Broker Dealers 1. Ethical Standard Rule 2. Confirmation of Customer Order 3. Client Agreement 4. Suitability Rule II. SRC Rule 52.1.8 – Customer Account Statements III. SRC Rule 30.2.5 – Commissions and Charges for Services Performed by a Broker Dealer IV. SRC Rule 52.1.9 – Customer Complaint Rule Others V. Others 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I.2 Confirmation of Customer Orders (SRC Rule 30.2.2 A. Broker Dealer shall report to its customers all transactions entered into for the customer's account, and to this end, shall send the customer a written confirmation of purchases and sales as promptly as possible. The written confirmation shall preferably be by electronic mail, facsimile or any other means as may be approved by the Commission. The Broker Dealer shall adopt written procedures to ensure that written confirmations are received promptly by the customer. An employee or salesman of a Broker Dealer shall not be authorized to accept a confirmation for or on behalf of a customer. 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I.2 Confirmation of Customer Orders (SRC Rule 30.2.2 B. Notwithstanding the electronic format approved by the Commission, the Broker Dealer shall provide his customer a confirmation of purchases and sales in paper format if requested by such customer. The Broker Dealer shall ensure that the electronic copies of the confirmation receipt or its equivalent are kept current and made available to the Commission, Exchange, or SRO concerned, and upon the request of the Commission, the Exchange, or SRO concerned, prepare or print hard copies of such document and submit without delay. 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I.2 Confirmation of Customer Orders (SRC Rule 30.2.2 C. Broker Dealers shall send to their clients their confirmations during office hours and on the day of the transactions but not later than the next business day after the transaction. Clients are required to attest to the accuracy of the information communicated in the confirmation not later than next business day after they received the confirmation. The Broker Dealer shall then keep a printout of such reply together with the file notifications and transaction data being confirmed. 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I.2 Confirmation of Customer Orders (SRC Rule 30.2.2 D. minimum content of Confirmation Orders…. For facsimile transmission and electronic confirmations, the reminder that clients must confirm their orders, not later than the next business day after they received the confirmation; The Commission, when it deems necessary, may require a Broker Dealer to submit a report of his commission or remuneration on a particular transaction; and All payments to customers must be through electronic fund transfer or checks issued in the name of the payee customer and/or the beneficial owner indicated in the CAIF. In no case shall checks be payable “To Cash” or similar designations. 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I. SRC Rule 30.2 – Transactions and Responsibilities of Broker Dealers 1. Ethical Standard Rule 2. Confirmation of Customer Order 3. Client Agreement 4. Suitability Rule II. SRC Rule 52.1.8 – Customer Account Statements III. SRC Rule 30.2.5 – Commissions and Charges for Services Performed by a Broker Dealer IV. SRC Rule 52.1.9 – Customer Complaint Rule Others V. Others 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I.3 Client Agreement (SRC Rule 30.2.3) A. A Broker Dealer and its registered persons who deal directly with clients shall ensure that a written agreement (hereinafter “Client Agreement”) is entered into with a client before any service is provided to that client. B. The Client Agreement shall be in a language understood by the client. The registered persons who deal directly with clients shall explain to the client the contents of the agreement. 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I.3 Client Agreement (SRC Rule 30.2.3) C. Minimum content of the Client Agreement… D. A registered person shall ensure that he complies with his obligations under the rule and the Client Agreement and that the Client Agreement shall state the nature of the account, whether directory or discretionary. 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I. SRC Rule 30.2 – Transactions and Responsibilities of Broker Dealers 1. Ethical Standard Rule 2. Confirmation of Customer Order 3. Client Agreement 4. Suitability Rule II. SRC Rule 52.1.8 – Customer Account Statements III. SRC Rule 30.2.5 – Commissions and Charges for Services Performed by a Broker Dealer IV. SRC Rule 52.1.9 – Customer Complaint Rule Others V. Others 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I.4 Suitability Rule (SRC Rule 30.2.4) In recommending to a customer the purchase, sale or exchange of any security, a Broker Dealer or an associated person or salesman of a Broker Dealer, shall have reasonable grounds for believing that the recommendation is suitable for such customer upon the basis of the facts disclosed by such customer as to his other security holdings and as to his financial situation and needs. Except as provided in SRC Rule 52.1.6 (Customer Account Information Rule), prior to the execution of a transaction recommended to a customer, a Broker Dealer shall execute a customer account information form which complies with SRC Rule 52.1.6. 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I. SRC Rule 30.2 – Transactions and Responsibilities of Broker Dealers 1. Ethical Standard Rule 2. Confirmation of Customer Order 3. Client Agreement 4. Suitability Rule II. SRC Rule 52.1.8 – Customer Account Statements III. SRC Rule 30.2.5 – Commissions and Charges for Services Performed by a Broker Dealer IV. SRC Rule 52.1.9 – Customer Complaint Rule Others V. Others 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) Customer Account Statements (SRC Rule 52.1.8) A Broker Dealer shall, at least once a month, send a statement of account containing a description of any securities positions, money balances, or account activity to each customer whose account has trades during the period since the last such statement was sent to the customer. Upon written request of the customer, the Broker Dealer may issue quarterly statements in lieu of monthly statements, provided such written request shall be kept in the company’s files for audit/investigation purposes. 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) Customer Account Statements (SRC Rule 52.1.8) Subject to prior approval by the Commission, a Broker Dealer may opt to use a statement of account in electronic format, provided, that the broker dealer shall provide his client a statement of account in paper format if requested by such client. A Broker Dealer shall ensure that the electronic copies of the account statement or the equivalent will be kept current and made available to the Commission, the Exchange, or SRO during the conduct of an audit or for any valid reason, and upon request of the Commission, the Exchange, or SRO concerned, prepare or print hard copies of such document and submit the same without delay. 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I. SRC Rule 30.2 – Transactions and Responsibilities of Broker Dealers 1. Ethical Standard Rule 2. Confirmation of Customer Order 3. Client Agreement 4. Suitability Rule II. SRC Rule 52.1.8 – Customer Account Statements III. SRC Rule 30.2.5 – Commissions and Charges for Services Performed by a Broker Dealer IV. SRC Rule 52.1.9 – Customer Complaint Rule Others V. Others 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) III. Charges for Services Performed (SRC Rule 30.2.5) SRC Rule 30.2.5 stipulates that charges by a broker or dealer, if any, for services performed, including i. miscellaneous services such as collection of monies due for principal, dividends, or interest; ii. exchange or transfer of securities; iii. appraisals, safekeeping or custody of securities, and other services, shall be reasonable. The same Rule also states that all Broker Dealers shall file a schedule of their minimum commission rates with the Commission and that no discounts and/or rebates shall be permitted from such minimum rates. 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) III. Charges for Services Performed (SRC Rule 30.2.5) A Broker Dealer shall not effect transaction unless he has disclosed and explained to his customer the various fees, if any, involved in effecting such transaction and the customer has agreed to said fees. The fees should be presented in the confirmation advice in an unbundled manner. Clients should signify in writing their assent to the various fees being charged by the Broker Dealer. 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I. SRC Rule 30.2 – Transactions and Responsibilities of Broker Dealers 1. Ethical Standard Rule 2. Confirmation of Customer Order 3. Client Agreement 4. Suitability Rule II. SRC Rule 52.1.8 – Customer Account Statements III. SRC Rule 30.2.5 – Commissions and Charges for Services Performed by a Broker Dealer IV. SRC Rule 52.1.9 – Customer Complaint Rule Others V. Others 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) IV. Customer Complaint Rule (SRC Rule 52.1.9) 1. Every Broker Dealer shall keep and preserve in each of its offices either i. a separate file of all written complaints of customers received by that office and the action taken by the Broker Dealer, or ii. a separate record of such complaints, properly indexed and referenced to the files containing the correspondence connected with such complaint. 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) IV. Customer Complaint Rule (SRC Rule 52.1.9) 2. Every Broker Dealer shall keep in its main office either a duplicate copy of all written complaints of customers received by all offices of the Broker Dealer and the action taken in respect thereto or a separate record of such complaints properly indexed and referenced to the files containing the correspondence connected with such complaint. 3. Every Broker Dealer shall notify in writing the SRO and the Commission of any written complaints received from the client and the action taken thereon by the Broker Dealer with respect thereto every 15th of the month. Duplicate copies of the complaint shall be attached to the report. 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) IV. Customer Complaint Rule (SRC Rule 52.1.9) 4. Complaint shall mean any written statement and/or a transcript/written summary of the oral/verbal statements of a customer or any person acting on behalf of a customer alleging a grievance involving the activities of those persons under the control of the Broker Dealer in connection with the a. solicitation or execution of any transaction, b. the disposition of securities or funds of that customer or c. any other aspect of the Broker Dealer's business. 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) I. SRC Rule 30.2 – Transactions and Responsibilities of Broker Dealers 1. Ethical Standard Rule 2. Confirmation of Customer Order 3. Client Agreement 4. Suitability Rule II. SRC Rule 52.1.8 – Customer Account Statements III. SRC Rule 30.2.5 – Commissions and Charges for Services Performed by a Broker Dealer IV. SRC Rule 52.1.9 – Customer Complaint Rule Others V. Others 2024 SEC CERTIFICATION WEBINAR Equities Securities Salesmen (ESS) DISCLedvedlvAIMER: feokfekofef Equities Securities Salesmen (ESS) 2024 SEC CERTIFICATION WEBINAR Securities Regulation Code (SRC) Rules on Business Conduct Atty. Oliver O. Leonardo Director, Markets and Securities Regulation Department