SR-FINRA-2019-009 has been approved by the SEC. Effective May 8, 2019, this rule will no longer be applicable. Please consult the appropriate FINRA rule.
(a) Except with the permission of the Exchange, or as otherwise provided by this paragraph, member organizations shall send to their customers statements of account showing security and money positions and entries at least quarterly to all accounts having an entry, money or security position during the preceding quarter. Quarterly statements need not be sent to a customer pursuant to
[Rule 409](a) if:
1) the customer's account is carried solely for the purpose of execution on a Delivery versus Payment/Receive versus Payment basis (DVP/RVP);
2) all transactions effected for the account are done on a DVP/RVP basis in conformity with [Rule 387];
3) the account does not show security or money positions at the end of the quarter;
4) the customer consents to the suspension of such statements in writing. Such consents must be maintained by the member organization in a manner consistent with Exchange [Rule 440] and Rule 17a-4 under the Securities Exchange Act of 1934;
5) the member organization undertakes to provide any particular statement or statements to the customer promptly upon request; and
6) the member organization undertakes to promptly reinstate the delivery of such statements to the customer upon request.
Nothing in this rule shall be seen to qualify or condition the obligations of a member organization under SEC Rule 15c3-2 concerning quarterly notices of free credit balances on statements.
For purposes of this rule, a DVP/RVP account is an arrangement whereby payment for securities purchased is to be made to the selling customer's agent and/or delivery of securities sold is to be made to the buying customer's agent in exchange for payment at time of settlement, usually in the form of cash.
(b) No member organization shall address confirmations, statements or other communications to a nonmember customer
(1) in care of a person holding power of attorney over the customer's account unless either (A) the customer has instructed the member organization in writing to send such confirmations, statements or other communications in care of such person, or (B) duplicate copies are sent to the customer at some other address designated in writing by him; or
(2) at the address of any member, member organization, or in care of a partner, stockholder who is actively engaged in the member corporation's business or employee of any member organization. The Exchange may upon written request therefore waive these requirements.
(c) Rescinded October 6, 1978. (See SEC Rule 10b-10).
(d) Rescinded July 1, 1970. (See SEC Rule 10b-16).
(e) Each statement of account sent to a customer pursuant to this rule shall bear a legend as follows:
(1) A legend that reads: "A financial statement of this organization is available for your personal inspection at its offices, or a copy of it will be mailed upon your written request."
(2) A legend that advises customers to report promptly any inaccuracy or discrepancy in that person's account to his or her brokerage firm. If a customer's account is subject to a clearing agreement pursuant to [Rule 382], the legend must advise that such notification be sent to both the introducing firm and the clearing firm. The legend must also advise the customer that any oral communications with either the introducing firm or the clearing firm should be re-confirmed in writing in order to further protect the customer's rights, including its rights under the Securities Investor Protection Act (SIPA).
(g) Member organizations carrying margin accounts for customers should send duplicate copies of monthly statements of guaranteed accounts to the respective guarantors unless such guarantors have specifically declared in writing that they do not wish such statements sent to them.
• • • Supplementary Material: --------------
.10 Exceptions to Rule 409(b) [¶2409]
The provisions of
[Rule 409](b), above, are not considered applicable to the following:
(1) General or special partners or holders of voting or non-voting stock other than any freely transferable security of member organizations.
(2) Employees of member organizations.
(3) Persons who maintain desk space at the office of a member or member organization and who thereby establish such office as their place of business.
(4) Corporations of which partners, stockholders or employees are officers or directors, and corporation accounts over which such persons have powers of attorney, provided, in each such case, the partner, stockholder or employee is duly authorized by the corporation to receive communications covering the account.
(5) Trust accounts, when a partner, stockholder or employee of a member organization is a trustee and has been duly authorized by all other trustees to receive communications covering the account.
(6) Estate accounts, when a partner, stockholder or employee of a member organization is an executor or administrator of the estate and has been duly authorized by all other executors or administrators to receive communications covering the account.
(7) Upon the written instructions of a customer and with the written approval of a member or supervisor of a member organization, a member organization may hold mail for a customer who will not be at his usual address for the period of his absence, but (a) not to exceed two months if the organization is advised that such customer will be on vacation or travelling or (b) not be exceed three months if the customer is going abroad.
