New Account/Engagement Compliance Procedures
The following procedures must be followed for all applicable accounts/engagements. In addition, any material amendments to existing engagements should be referred to the Designated Supervisory Principal (“DSP”) and the Chief Compliance Officer (“CCO”) for guidance on the need for additional paperwork.
All proposed new engagements and the Commitments Committee Memorandum must be presented to, and approved by, the NexBank Capital Advisors Commitment Committee.
The Registered Representative (“RR”) must complete all applicable sections of both pages of the New Account Form and collect the required AML documents for verification. Please see page 4 for the "AML Procedures". THE RR IS NOT PERMITTED TO EXECUTE AN ENGAGEMENT AGREEMENT UNTIL THE REQUIRED AML INFORMATION IS OBTAINED.
The agreement (engagement or consulting agreement) signed by the RR, the principal, and the client; the New Account Form – must be completed for all engagements including sell-side, buy-side and financing – signed by the RR; and the AML documentation should be sent to Compliance for review and confirmation that all required documentation has been provided and that the engagement can proceed. The New Account Form should also be sent to the Controller for new account set up.
Please note that transactions such as a capital raise might require additional documentation since a suitability determination (Institutional Suitability Form included in packet) might be required. Any questions about the documentation required should be directed to Compliance BEFORE executing an engagement agreement or amending an existing agreement.
Compliance will conduct the AML background check. If the background check is acceptable, the account documents will be reviewed by the DSP and approved by Compliance.
Once approved, the New Account Form is signed by Compliance and the RR is notified. The RR will be responsible for emailing the required “New Account Notifications and Disclosures” document to the client and submitting the email for documentation.
The USA PATRIOT Act (the “Rule”) requires that we obtain specific information from customers in order to verify their identity. The Rule applies both to individual account and accounts where the customer is not a natural person. The Rule defines “customer” as: (a) person that opens a new account; and (b) an individual who opens an account for an entity that is not a legal person. The following procedures MUST be followed PRIOR to opening an account:
Determine the “customer” for the account (should generally be the person listed first on the New Account Form). For accounts where the client is an entity, then the individual who possesses the legal authority to act on behalf of the entity.
Provide customer, preferably by email, with the USA PATRIOT Act Disclosure, included in New Account Packet.
At a minimum, obtain the following information for the customer:
Date of Birth, for an individual account
Physical Address, home address for individual or business address
Identification Number – For a U.S. Person should be the Social Security Number
Document Verification – The Rule requires that firms verify the identity, using documentary methods. All documents must be noted and copies must be provided with the New Account Form. The following documents are examples of documents that may be used:
For an individual, an unexpired government-issued identification such as a drivers license or passport
For a customer other than an individual, documents showing the existence of the entity, such as:
Certified Articles of Incorporation
Government Issued Business License
Please contact the Compliance Department with any questions on AML procedures or acceptable verification documents.
USA PATRIOT Act Disclosure
The USA PATRIOT Act, enacted in 2001, is designed to detect, deter, and punish terrorists in the United States and abroad. The USA PATRIOT Act imposed new anti-money laundering requirements on brokerage firms and financial institutions. By April 24, 2002, all brokerage firms were required to have new, comprehensive anti-money laundering programs.
To help you understand these efforts, we want to provide you with some information about money laundering and our steps to implement the requirements of the USA PATRIOT Act.
What is Money Laundering?
Money laundering is the process of disguising illegally obtained money so that the funds appear to come from legitimate sources or activities. Money laundering occurs in connection with a wide variety of crimes, including illegal arms sales, drug trafficking, robbery, fraud, racketeering, and terrorism.
How Big is the Problem and Why is it Important?
The use of the U.S. financial system by criminals to facilitate terrorism or other crimes could well taint our financial markets. According to the U.S. State Department, one recent estimate puts the amount of worldwide money laundering activity at $1 trillion per year.
NexBank Capital Advisors is committed to complying fully with all applicable laws and regulations relating to combating money laundering and any activity which facilitates the funding of terrorist or other criminal enterprises.
Our Anti-Money Laundering Policies and Procedures
NexBank Capital Advisors has adopted policies and procedures to detect and prevent money laundering, which are summarized below:
• NexBank Capital Advisors has established a comprehensive anti-money laundering program that meets applicable rules and regulations in the jurisdictions where it conducts business
• NexBank Capital Advisors has appointed money laundering compliance officer(s) to oversee the Firm’s anti-money laundering efforts
• NexBank Capital Advisors utilizes both manual and automated systems to monitor transactions within the Firm for suspicious activity
• NexBank Capital Advisors has established a program to train its relevant employees in the Firm’s anti-money laundering policies and procedures, detect money laundering, and report any suspicious activity
• NexBank Capital Advisors has established independent, third party compliance testing to evaluate the Firm’s anti-money laundering program
Important Information You Need to Know about Opening a New Account
To help the government fight the funding of terrorism and money laundering activities, federal law requires financial institutions to obtain, verify and record information that identifies each person who opens an account.
The following section answers some questions about NexBank Capital Advisors’ Customer Identification Program.
What types of information will I need to provide?
When you open an account, NexBank Capital Advisors is required to collect the following information:
Date of birth
U.S. citizen: taxpayer identification number (Social Security number or employer identification number)
Non-U.S. citizen: taxpayer identification number; passport number and country of issuance; alien identification card number; or government-issued identification showing nationality, residence and a photograph of you.
You may also need to show your driver’s license or other identifying documents.
A corporation, partnership, trust or other legal entity may need to provide other information, such as its principal place of business, local office, employer identification number, certified articles of incorporation, government-issued business license, a partnership agreement or a trust agreement.
U.S. Department of the Treasury, Securities and Exchange Commission, and FINRA rules already require you to provide most of this information. These rules also may require you to provide additional information, such as your net worth, annual income, occupation, employment information, investment experience and objectives, and risk tolerance.
What happens if I don’t provide the information requested or my identity can’t be verified?
NexBank Capital Advisors may not be able to open an account or carry out transactions for you. If NexBank Capital Advisors has already opened an account for you, we may have to close it.
If you have any questions about the USA Patriot Act or NexBank Capital Advisors’ commitment, policies or procedures in regards to the USA Patriot Act please contact Eric Holt, Chief Compliance Officer, at (972) 763-4000.
NEW ACCOUNT NOTIFICATIONS AND DISCLOSURES
NexBank Securities, Inc. (“NSI”) is a member of the Financial Industry Regulatory Authority (“FINRA”) and the Securities Investor Protection Corporation (“SIPC”) and is subject to the oversight of these organizations, the Securities Exchange Commission (“SEC”), and other regulatory agencies. NexBank Capital Advisors is a d/b/a of NexBank Securities, Inc. We are required by various rules and regulations to provide to you with the following notifications (i) at the time you sign an agreement with NSI; (ii) at least once annually thereafter while that agreement is still active; and (iii) at any time there is a material change in any of our policies.
NexBank Capital Advisors and its affiliates recognize and respect the privacy concerns and expectations of our customers. We are providing this notice to you so that you will know what kinds of personal information we may collect about you, the circumstances in which that information may be disclosed to third parties and the steps we take to safeguard the information to protect your privacy.
Collection of Customer Information
We may collect non-public personal information about our customers from the following sources:
Account application and other forms, which may include a customer’s name, address, social security number, and driver’s license, and information about a customer’s income, business, source of wealth, net worth, investment goals and experience, and risk tolerance.
- Account history, including information about transactions and positions in customer accounts.
- Communications, including written, telephonic, and electronic communications, between a customer and NexBank Capital Advisors or service providers to NexBank Capital Advisors.
- Information we receive from a consumer reporting agency or from our affiliates.
- While we make every effort to ensure that all information we have about you is accurate, complete and up to date, you can help us considerably in this regard by promptly notifying us if there are any changes to your personal information. Also, we may be unable to open or maintain your account or to provide services to you if you fail to provide the personal information we request.
Disclosure of Customer Information
We do not disclose nonpublic personal information about a customer or former customer to anyone, except as permitted by law. We may disclose some or all of the nonpublic personal information we collect to our affiliates who are engaged in the financial services sector, but we do not disclose such information to non-affiliated third parties except under one or more of the following circumstances:
- If a customer authorizes the disclosure of the information.
- To non-affiliated third parties who provide support services for your account or facilitate your transactions with NexBank Capital Advisors, including lawyers, accountants and others who provide professional services to NexBank Capital Advisors. Non-affiliated third parties who perform such support services for your account or who facilitate your transactions with NSI are required to maintain the confidentiality of such information and to use it only for the purpose of providing such services.
- To non-affiliated companies that perform marketing services on our behalf or to other financial institutions with whom we have joint marketing agreements.
- As otherwise permitted or required by law, including, by way of example, to effect or administer a transaction authorized by a consumer; in connection with processing or servicing a financial product or service that a customer requests or authorizes; or in response to regulatory requirements.
Security of Customer Information
We restrict access to nonpublic personal information about you within NexBank Capital Advisors to those employees who need to know that information in order to provide products and services to you or to comply with regulatory requirements. We maintain physical, electronic and procedural safeguards that comply with federal standards to protect such information. We monitor our systems to detect weakness and potential intrusions. We provide relevant training to our employees and update our security practices in light of new risks and developments in technology. NexBank Capital Advisors also has procedures to identify, authenticate and authorize access to various systems or sites.
Please know that NexBank Capital Advisors will not sell your personal information.
Opt Out Provisions
The law allows you to "opt out" of certain kinds of information sharing with third parties. The Firm does not share personal information about you with any third party that triggers this opt-out right.
Important Information about Procedures for Opening a New Account
To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account.
When you open an account, we will ask for your name, address, date of birth and other information that will allow us to identify you. We may also ask to see your driver's license or other identifying documents. The information gathered during this process also falls under this policy.
If you have any questions about NexBank Capital Advisors’ privacy policies, please contact Eric Holt, Chief Compliance Officer, at (972) 763-4000.
BUSINESS CONTINUITY PLAN
NexBank Capital Advisors has created a plan on how we would respond to an event that significantly impacted our ability to conduct business. The unpredictability of such an event requires NSI to be flexible in responding and adjusting to various circumstances and events. Our plan is to resume operations as quickly and as effectively as possible. The entire Business Continuity Plan is available by contacting Eric Holt at firstname.lastname@example.org or 972-763-4000.
NSI is a member of the Securities Investor Protection Corporation (“SIPC”). Information about coverage provided by SIPC can be obtained by calling SIPC at (202) 371-8300 and requesting a brochure or visiting their website at www.SIPC.org.
FINRA INVESTOR EDUCATION / BROKERCHECK
NSI is a member of FINRA and is required to inform you of the availability of the FINRA Investor Brochure, which contains information on the FINRA Public Disclosure Program. You may contact FINRA BrokerCheck Hotline at (800) 289-9999 or via the internet at www.FINRA.org.
QUESTIONS, INQUIRIES OR COMPLAINTS
Call or write to:
NexBank Securities, Inc.
2515 McKinney Ave, Suite 1100
Dallas, Texas 75201
Phone: (972) 763-4000