Regions Bank 2011 Annual Report Download - page 46

directors, officers and employees; record-keeping and recording; supervisory procedures to prevent improper
trading on material non-public information; qualification and licensing of sales personnel; and limitations on the
extension of credit in securities transactions. Rules and regulations for registered investment advisers include
limitations on the ability of investment advisers to charge performance-based or non-refundable fees to clients,
record-keeping and reporting requirements, disclosure requirements, limitations on principal transactions
between an adviser or its affiliates and advisory clients, and anti-fraud standards.
Morgan Keegan is subject to the net capital requirements set forth in Rule 15c3-1 of the Securities Exchange
Act of 1934. The net capital requirements measure the general financial condition and liquidity of a broker-dealer
by specifying a minimum level of net capital that a broker-dealer must maintain, and by requiring that a
significant portion of its assets be kept liquid. If Morgan Keegan failed to maintain its minimum required net
capital, it would be required to cease executing customer transactions until it came back into compliance. This
could also result in Morgan Keegan losing its FINRA membership, its registration with the SEC or require a
complete liquidation.
The SEC’s risk assessment rules also apply to Morgan Keegan as a registered broker-dealer. These rules
require broker-dealers to maintain and preserve records and certain information, describe risk management
policies and procedures, and report on the financial condition of affiliates whose financial and securities activities
are reasonably likely to have a material impact on the financial and operational condition of the broker-dealer.
Certain “material associated persons” of Morgan Keegan, as defined in the risk assessment rules, may also be
subject to SEC regulation.
In addition to federal registration, state securities commissions require the registration of certain broker-
dealers and investment advisers. Morgan Keegan is registered as a broker-dealer with every state, the District of
Columbia, and Puerto Rico. Morgan Keegan is registered as an investment adviser in 47 states and the District of
Columbia.
Violations of federal, state and SRO rules or regulations may result in the revocation of broker-dealer or
investment adviser licenses, imposition of censures or fines, the issuance of cease and desist orders, and the
suspension or expulsion of officers and employees from the securities business firm.
The Dodd-Frank Act contains several provisions which may affect Morgan Keegan’s business, including
registration of municipal advisors, increased regulation of investment advisors and conducting a study regarding
the fiduciary duties of investment advisors. Morgan Keegan’s business may be adversely affected by new rules
and regulations issued by the SEC or SROs, the implementation of provisions of the Dodd-Frank Act applicable
to Morgan Keegan, and any changes in the enforcement of existing laws and rules that affect its securities
business.
Competition
All aspects of Regions’ business are highly competitive. Regions’ subsidiaries compete with other financial
institutions located in the states in which they operate and other adjoining states, as well as large banks in major
financial centers and other financial intermediaries, such as savings and loan associations, credit unions,
consumer finance companies, brokerage firms, insurance companies, investment companies, mutual funds,
mortgage companies and financial service operations of major commercial and retail corporations. Regions
expects competition to intensify among financial services companies due to the recent consolidation of certain
competing financial institutions and the conversion of certain investment banks to bank holding companies.
Customers for banking services and other financial services offered by Regions’ subsidiaries are generally
influenced by convenience, quality of service, personal contacts, price of services and availability of products.
Although Regions’ position varies in different markets, Regions believes that its affiliates effectively compete
with other financial services companies in their relevant market areas.
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