Utah Administrative Code
The Utah Administrative Code is the body of all effective administrative rules as compiled and organized by the Division of Administrative Rules (see Subsection 63G-3-102(5); see also Sections 63G-3-701 and 702).
NOTE: For a list of rules that have been made effective since October 1, 2019, please see the codification segue page.
NOTE TO RULEFILING AGENCIES: Use the RTF version for submitting rule changes.
R333. Financial Institutions, Banks.
Rule R333-5. Discount Securities Brokerage Service by Banks.
As in effect on October 1, 2019
Table of Contents
- R333-5-1. Authority, Scope, and Purpose.
- R333-5-2. Definitions.
- R333-5-3. Discount Brokerage Services.
- Date of Enactment or Last Substantive Amendment
- Notice of Continuation
- Authorizing, Implemented, or Interpreted Law
(1) This rule is issued pursuant to Subsection 7-1-301(3)(a) and Section 7-3-3.2.
(2) This rule governs the type of securities brokerage service state chartered banks may offer.
(3) The purpose of this rule is to limit securities activities to "discount brokerage" services and to give state chartered banks competitive equality with national banks which have their principal office in this state by granting the same rights and privileges to state chartered banks as are enjoyed by Utah's national banks.
"Discount brokerage" means the practice of executing securities transactions solely at the direction of a bank customer but not providing that customer with any investment advice.
A state chartered bank may enter into a contractual arrangement with unrelated discount brokers where the broker executes securities transactions for bank customers and the bank shares the commissions generated by the transaction. This service is restricted as outlined below:
(1) The bank clearly acts solely at the customer's direction;
(2) The transactions are for the account of the customer and not the account of the bank;
(3) The transactions are without recourse;
(4) The bank makes no warranty as to the performance or quality of any security;
(5) The bank does not advise customers to make any particular investment;
(6) The bank's promotional material clearly explains the bank's limited role in the service; and
(7) The bank's promotional material clearly explains that the transactions are not federally insured.
banks and banking, securities
December 2, 1997
September 15, 2017
For questions regarding the content or application of rules under Title R333, please contact the promulgating agency (Financial Institutions, Banks). A list of agencies with links to their homepages is available at http://www.utah.gov/government/agencylist.html or from http://www.rules.utah.gov/contact/agencycontacts.htm.