Securities: Statement Of Policy - COVID-19 Outbreak
The Tennessee Securities Division (“Division”) sets forth this Statement of Policy regarding business disruptions caused by the COVID-19 pandemic that affect broker-dealers, investment advisers, federal covered investment advisers, and their registered agents or representatives (collectively “financial professionals”).
The Division understands that responses to the COVID-19 pandemic may have unintended regulatory consequences; accordingly, the Division is issuing this Statement of Policy. This Statement of Policy shall remain in effect during the time of the declared national emergency due to COVID-19.
In reviewing actions by financial professionals in response to the COVID-19 pandemic that have unintended regulatory consequences, the Division will look at each situation individually and will consider whether:
- The financial professional’s actions were in response to the COVID-19 outbreak;
- The financial professional was properly registered and/or notice filed with all required securities regulators and self-regulatory organizations as of March 1, 2020;
- The financial professional was the subject of an ongoing enforcement proceeding in any jurisdiction and is not in violation of the Tennessee Securities Act and related regulations, except for those provisions included within the scope of this Statement of Policy;
- The financial professional limited activities to existing customers or clients; and
- The financial professional’s actions were reasonable.
The Division understands that financial professionals may not be able to obtain physical signatures on Forms U4 timely as required by FINRA rules1 and similar provisions of the Tennessee Securities Act and related regulations. Such firms may submit Forms U4 electronically, without first obtaining physical signatures from individual agents or representatives, provided that the firm (a) provides the individual with a copy of the completed Form U4 prior to filing, (b) obtains the individual’s written agreement prior to filing that the form’s content is accurate and complete, (c) retains the written acknowledgment in accordance with Tennessee’s laws and regulations, and (d) obtains the applicant’s physical signature as soon as practicable.
Financial professionals who rely on this Statement of Policy should keep any documentation explaining or supporting their actions. Any activities that, in the opinion of the Division, do not meet the conditions outlined above will be subject to enforcement action.
Any questions about this Statement of Policy should be directed to the Tennessee Securities Division by email at Securities1@tn.gov, by mail to the Tennessee Securities Division at Davy Crockett Tower, 10th Floor, 500 James Robertson Parkway, Nashville, Tennessee, 37243, or by telephone number (615) 741-2947.