Securities Lawyer's Deskbook                          published by The University of Cincinnati College of Law

Rule 500 -- Definitions

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• Covered person of a broker or dealer means an associated person of that broker or dealer but does not include:
  
  
  1. An associated person:
     
     
     1. If the associated person has no officers (or persons performing similar functions) or employees in common with the broker or dealer who can influence the activities of research analysts or the content of research reports; and
        
        
     2. If the broker or dealer maintains and enforces written policies and procedures reasonably designed to prevent the broker or dealer, any controlling persons, officers (or persons performing similar functions), and employees of the broker or dealer from influencing the activities of research analysts and the content of research reports prepared by the associated person.
        
        
  2. An associated person who is an investment adviser:
     
     
     1. Not registered with the Commission as an investment adviser because of the prohibition of section 203A of the Investment Advisers Act of 1940; and
        
        
     2. Not registered or required to be registered with the Commission as a broker or dealer.
        
        

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  Note to definition of covered person: An associated person of a broker or dealer who is not a covered person continues to be subject to the federal securities laws, including the anti-fraud provisions of the federal securities laws.

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• Foreign person means any person who is not a U.S. person.
  
  
• Foreign security means a security issued by a foreign issuer for which a U.S. market is not the principal trading market.
  
  
• Public appearance means any participation by a research analyst in a seminar, forum (including an interactive electronic forum), or radio or television or other interview, in which the research analyst makes a specific recommendation or provides information reasonably sufficient upon which to base an investment decision about a security or an issuer.
  
  
• Registered broker or dealer means a broker or dealer registered or required to register pursuant to section 15 or section 15B of the Securities Exchange Act of 1934 or a government securities broker or government securities dealer registered or required to register pursuant to section 15C(a)(1)(A) of the Securities Exchange Act of 1934.
  
  
• Research analyst means any natural person who is primarily responsible for the preparation of the content of a research report.
  
  
• Research report means a written communication (including an electronic communication) that includes an analysis of a security or an issuer and provides information reasonably sufficient upon which to base an investment decision.
  
  
• Third party research analyst means:
  
  
  1. With respect to a broker or dealer, any research analyst not employed by that broker or dealer or any associated person of that broker or dealer; and
     
     
  2. With respect to a covered person of a broker or dealer, any research analyst not employed by that covered person, by the broker or dealer with whom that covered person is associated, or by any other associated person of the broker or dealer with whom that covered person is associated.
     
     
• United States has the meaning contained in Rule 902(l) under the Securities Act of 1933.
  
  
• U.S. person has the meaning contained in Rule 902(k) under the Securities Act of 1933.
  
  

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