In accordance with Governor Lamont's emergency declaration, employees and the public are asked to observe social distancing measures to ensure communal safety and to slow the spread of the novel coronavirus (COVID-19). People are asked to work from home and telecommute wherever possible. Adhering to these instructions, the Department of Banking has closed its offices to the public. However, agency staff will continue to provide services to consumers and industry through telework. When contacting the Department, please use electronic communication whenever possible. Agency staff will continue to check voicemails during this time. Consumers are encouraged to use our online form for complaints. If you are unsure where to send an inquiry, you may send it to Department.Banking@ct.gov and it will be routed appropriately. Thank you for your patience during this time.

Interpretive Order Concerning Broker-Dealers, Investment Advisers,
Broker-Dealer Agents And Investment Adviser Agents
Using The Internet For General Dissemination
Of Information On Products And Services

WHEREAS the Commissioner of Banking (the "Commissioner") is charged with the administration of Chapter 672a of the Connecticut General Statutes, the Connecticut Uniform Securities Act, (the "Act"), as amended by P.A. 97-220, and Sections 36b-31-2 et seq. of the Regulations of Connecticut State Agencies promulgated under the Act;

WHEREAS Section 36b-31(a) of the Act provides, in part, that "[t]he commissioner may from time to time make, amend and rescind such ... orders as are necessary to carry out the provisions of [the Act] ...;"

WHEREAS Section 36b-6(a) of the Act, as amended by P.A. 97-220, provides, in part that: "No person shall transact business in this state as a broker-dealer unless he is registered under ... [the Act]. No individual shall transact business as an agent in this state unless he is (1) registered as an agent of the broker-dealer ... whom he represents in transacting such business or (2) an associated person who represents a broker-dealer in effecting transactions described in subdivisions (2) and (3) of section 15(h) of the Securities Exchange Act of 1934;"

WHEREAS Section 36b-6(c) of the Act, as amended by P.A. 97-220, states, in part, that: "No person shall transact business as an investment adviser, within or from this state, unless registered as such by the commissioner as provided in sections 36b-2 to 36b-33, inclusive, or exempted pursuant to subsection (e) of this section. No individual shall transact business as an investment adviser agent, within or from this state unless he is registered as an investment adviser agent of the investment adviser for whom he acts in transacting such business."

WHEREAS the Commissioner acknowledges that the Internet, the World Wide Web, and similar proprietary or common carrier electronic systems (collectively, the "Internet") have facilitated greatly the ability of broker-dealers, investment advisers, broker-dealer agents and investment adviser agents to advertise and otherwise disseminate information on products and services to prospective customers and clients;

WHEREAS the Commissioner also acknowledges that certain communications made on the Internet are directed generally to anyone having access to the Internet and may be transmitted through postings on Bulletin Boards, displays on "Home Pages" or similar methods (hereinafter, "Internet Communications");

WHEREAS the Commissioner further acknowledges that in certain instances, by distributing information on available products and services through Internet Communications available to persons in this state, broker-dealers, investment advisers, their broker-dealer agents and their investment adviser agents could be construed as "transacting business" for purposes of Sections 36b-6(a) and 36b-6(c) of the Act so as to require registration in this state, since the Internet Communications would be received in this state regardless of the intent of the person originating such communication; and

WHEREAS the Commissioner finds that the issuance of this Order is necessary and appropriate in the public interest and for the protection of investors and consistent with the purposes fairly intended by the policy and provisions of the Act;

NOW THEREFORE, IT IS HEREBY ORDERED AS FOLLOWS:
1. Broker-dealers, investment advisers, broker-dealer agents (hereinafter "BD Agents") and investment adviser agents (hereinafter "IA Agents") who use the Internet, the World Wide Web, and similar proprietary or common carrier electronic systems (collectively, hereinafter the "Internet") to distribute information on available products and services through certain communications made on the Internet directed generally to anyone having access to the Internet, and transmitted through postings on Bulletin Boards, displays on "Home Pages" or similar methods (hereinafter, "Internet Communications") shall not be deemed to be "transacting business" in this state for purposes of Sections 36b-6(a) and 36b-6(c) of the Act based solely on that fact if the following conditions are observed:
A. The Internet Communication contains a legend in which it is clearly stated that
(1) the broker-dealer, investment adviser, BD Agent or IA Agent in question may only transact business in this state if first registered, excluded or exempted from state broker-dealer, investment adviser, BD Agent or IA Agent registration requirements, as the case may be; and
(2) follow-up, individualized responses to persons in this state by such broker-dealer, investment adviser, BD Agent or IA Agent that involve either the effecting or attempting to effect transactions in securities, or the rendering of personalized investment advice for compensation, as the case may be, will not be made absent compliance with state broker-dealer, investment adviser, BD Agent or IA Agent registration requirements, or an applicable exemption or exclusion;
B. The Internet Communication contains a mechanism, including and without limitation, technical "firewalls" or other implemented policies and procedures, designed reasonably to ensure that prior to any subsequent, direct communication with prospective customers or clients in this state, said broker-dealer, investment adviser, BD Agent or IA Agent is first registered in this state or qualifies for an exemption or exclusion from such requirement. Nothing in this paragraph shall be construed to relieve a state registered broker-dealer, investment adviser, BD Agent or IA Agent from any applicable securities registration requirement in this state;
C. The Internet Communication does not involve either effecting or attempting to effect transactions in securities, or the rendering of personalized investment advice for compensation, as the case may be, in this state over the Internet, but is limited to the dissemination of general information on products and services; and
D. In the case of a BD Agent or IA Agent:
(1) the affiliation with the broker-dealer or investment adviser of the BD Agent or IA Agent is prominently disclosed within the Internet Communication;
(2) the broker-dealer or investment adviser with whom the BD Agent or IA Agent is associated retains responsibility for reviewing and approving the content of any Internet Communication by a BD Agent or IA Agent;
(3) the broker-dealer or investment adviser with whom the BD Agent or IA Agent is associated first authorizes the distribution of information on the particular products and services through the Internet Communication; and
(4) in disseminating information through the Internet Communication, the BD Agent or IA Agent acts within the scope of the authority granted by the broker-dealer or investment adviser;
2. The position expressed in this Interpretive Order extends to state broker-dealer, investment adviser, BD Agent and IA Agent registration requirements only, and does not excuse compliance with applicable securities registration, antifraud or related provisions;
3. Nothing in this Order shall be construed to affect the activities of any broker-dealer, investment adviser, BD Agent and IA Agent engaged in business in this state that is not subject to the jurisdiction of the Commissioner as a result of the National Securities Markets Improvements Act of 1996, as amended; and
4. This Order shall remain in effect unless and until subsequently amended or rescinded.
So ordered at Hartford, Connecticut
this third day of October, 1997
John P. Burke
Banking Commissioner