Mutual Securities, Inc. (“MSI”) is not registered as a broker-dealer outside of the United States (“U.S.”), Puerto Rico and the U.S. Virgin Islands; therefore, registered representatives  (“RRs”) are prohibited from engaging in any securities related sales activity in person, on the telephone or via email with existing clients or prospective clients who reside outside of the U.S., Puerto Rico and the U.S. Virgin Islands unless the situation of the clients or prospective clients meet one of the following circumstances.

U.S. Citizens and Permanent Resident Aliens (aka Green Card Holder) Abroad

MSI will allow RRs to conduct securities business with U.S. citizens or permanent resident aliens who are out of the country due to their job, personal travel, or otherwise reside outside of the United States for short periods of time (less than six months of the year), with certain restrictions outlined below.

RRs may correspond with U.S. citizens or permanent resident aliens abroad both in sending and receiving written communications. They may also communicate with these U.S. citizens or permanent resident aliens abroad verbally over the telephone. Trading instructions may be taken verbally over the telephone, except as noted in the below restrictions.

In order to continue servicing U.S. citizens or permanent resident aliens abroad, the relationship with the client must have been established via a face-to-face meeting in the U.S. and the client must maintain a U.S. residential legal address on the account and reside a majority of the year in the U.S. (six consecutive months or more of the year).

If a U.S. citizen or permanent resident alien resides outside the U.S. for a majority of the year (six months or more of the year), they are considered a non-U.S. resident and must appoint a Power of Attorney (POA) who is a U.S. citizen or permanent resident alien (residing in the U.S.) for their account(s). RRs may correspond with these U.S. citizens or permanent resident aliens while living abroad, but must only take instructions on the account from the appointed U.S. citizen or permanent resident alien POA while the U.S. citizen is living abroad. The following restrictions apply.

Restrictions:

RRs are not permitted to open or maintain accounts or accept transaction instructions with U.S. citizens living or travelling in:

• OFAC Sanctioned countries, including Balkans, Belarus, Burma, Cuba, Democratic Republic of Congo, Iran, Iraq,  Ivory Coast, Liberia, North Korea, Syria and Zimbabwe
• A country identified as high or medium-high risk by the firm, unless an exception is granted
• Canada or certain other countries due to strict registration requirements, or countries that have not yet been vetted, even if the person has a U.S. citizen/resident alien POA

For countries that have not yet been vetted with regard to their registration requirements, accounts will not be opened for that country until the firm can complete a review.  Once vetted, if the country does not have strict registration requirements, or fall within one of the other restrictions above, the account may be allowed.

APO and FPO Addresses for U.S. Citizens

For U.S. citizens abroad, MSI will treat Army Post Office ("APO") and Fleet Post Office ("FPO") addresses as a U.S. residential address. These addresses are commonly used by U.S. government personnel stationed abroad (e.g., U.S. military personnel, U.S. Embassy personnel, State Department personnel, Defense Department contractors, etc.) and their family members.

Non-Resident Alien

A non-resident alien is a foreign citizen who resides outside of the U.S. for six months or more a year. RRs are permitted to open and maintain accounts for non-resident aliens once their countries have been vetted and do not have strict registration requirements or fall within one of restrictions referenced below. For countries that have not yet been vetted regarding their registration requirements, accounts will not be opened for that country until the firm can complete a review.

Additionally, non-resident alien accounts are subject to the following requirements and restrictions:

• A POA who is a U.S. citizen or permanent resident alien (residing in the U.S.) must be appointed for the account(s). RRs may not act as the client’s legal POA.
• The client relationship must be established in the U.S. during a face-to-face meeting with the RR, the client and the client’s U.S. citizen or permanent resident alien POA.
• The RR must be registered/licensed in the state where the face-to-face meeting takes place and in any other state where securities transactions may be conducted.
• The following documents are required to accompany the new account application:
• A copy of two non-resident alien’s identification documents (must be government issued with a photo, e.g., passport, identification card, driver license, etc.)
• A copy of the address of record verification document (such as an utility bill issued within the last 30 days with the address of record listed as the service address)
• Form W8 that corresponds to the account registration type
• Completion of MSI’s Enhanced Due Diligence Questionnaire
• While the client is living abroad, the RR may only conduct business with the U.S. citizen or permanent resident alien POA. The only exceptions are previously established dollar cost averaging programs or systematic withdrawal and payment plans.
• RRs may not solicit or accept business or any other transaction instructions directly from non-resident alien clients when they are not residing in the U.S.

Restrictions:

RRs are not permitted to open or maintain accounts or accept transaction instructions with persons residing or travelling in:

• OFAC Sanctioned countries, include Balkans, Belarus, Burma, Cuba, Democratic Republic of Congo, Iran, Iraq, Ivory Coast, Liberia, North Korea, Syria and Zimbabwe
• A country identified as high or medium-high risk by the firm, unless an exception is granted
• Canada or certain other countries due to strict registration requirements, or countries that have not yet been vetted, even if the person has a U.S. resident POA

Resident Alien

A resident alien is a foreign citizen who legally resides in the U.S. for six consecutive months or more a year.  

RRs may conduct securities business with a resident alien (foreign citizen living in the U.S.) so long as the individual has a verifiable U.S. legal resident address (at which they reside for at least six consecutive months of the year), U.S. Social Security number and the RR is properly registered/licensed to do so.

Additional Information

Additional information on our policies can be found on the Power Portal Knowledgebase.

If you have questions about this guidance or any particular scenario, please reach out to Compliance to schedule time with us.

Thank you,

The Mutual Compliance Team