Ameriprise 2008 Annual Report Download - page 43

and compliance programs of broker-dealers, including certification by senior officers regarding the effectiveness of these
procedures and programs.
Our Advice & Wealth Management business is regulated by the SEC, FINRA, the Commodity Futures Trading Commission, the
National Futures Association, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision (‘‘OTS’’), state
securities regulators and state insurance regulators. Additionally, the U.S. Departments of Labor and Treasury regulate certain
aspects of our retirement services business. Because our independent contractor branded advisor platform is structured as a
franchise system, we are also subject to Federal Trade Commission and state franchise requirements. Compliance with these
and other regulatory requirements adds to the cost and complexity of operating our business.
AFSI and AASI are registered as broker-dealers and investment advisers with the SEC, are members of FINRA and do business
as broker-dealers and investment advisers in all 50 states and the District of Columbia. AASI is also a member of the New York
Stock Exchange. RiverSource Distributors, which serves as the principal underwriter and distributor of our annuities and
insurance products and a principal underwriter and distributor of our mutual funds, is registered as a broker-dealer with the
SEC, each of the 50 states and the District of Columbia, and is a member of FINRA. RiverSource Fund Distributors, Inc. is also
a registered broker-dealer and FINRA member. AFSI, AASI and RiverSource Distributors are also licensed as insurance
agencies under state law. The SEC and FINRA have stringent rules with respect to the net capital requirements and activities of
broker-dealers. Our financial advisors and other personnel must obtain all required state and FINRA licenses and registrations.
SEC regulations also impose notice requirements and capital limitations on the payment of dividends by a broker-dealer to a
parent. Our subsidiary, AEIS, is also registered as a broker-dealer with the SEC and appropriate states, is a member of FINRA
and the Boston Stock Exchange and a stockholder in the Chicago Stock Exchange. Two subsidiaries that use our independent
financial advisor platform, SAI and Brecek & Young, are also registered as broker-dealers, are members of FINRA, and are
licensed as insurance agencies under state law. Certain of our subsidiaries also do business as registered investment advisers
and are regulated by the SEC and state securities regulators where required.
Ameriprise Certificate Company, our face-amount certificate company, is regulated as an investment company under the
Investment Company Act of 1940, as amended. Ameriprise Certificate Company pays dividends to the parent company and is
subject to capital requirements under applicable law and understandings with the SEC and the Minnesota Department of
Commerce.
Our banking subsidiary, Ameriprise Bank, is subject to regulation by the OTS, which is the primary regulator of federal savings
banks, and by the FDIC in its role as insurer of Ameriprise Bank’s deposits. As its controlling company, we are a savings and
loan holding company, and we are subject to supervision by the OTS. Furthermore, our ownership of Threadneedle subjects us
to the European Union (‘‘EU’’) Financial Conglomerates Directive to designate a global consolidated supervisory regulator, and
we have designated the OTS for this purpose. Because of our status as a savings and loan holding company, our activities are
limited to those that are financial in nature, and the OTS has authority to oversee our capital and debt, although there are no
specific holding company capital requirements. Ameriprise Bank is subject to specific capital rules, and Ameriprise Financial
has entered into a Source of Strength Agreement with Ameriprise Bank to reflect that it will commit such capital and
managerial resources to support the subsidiary as the OTS may determine necessary under applicable regulations and
supervisory standards. In the event of the appointment of a receiver or conservator for Ameriprise Bank, the FDIC would be
entitled to enforce Ameriprise Financial’s Source of Strength Agreement. If Ameriprise Bank’s capital falls below certain levels,
the OTS is required to take remedial actions and may take other actions, including the imposition of limits on dividends or
business activities, and a directive to us to divest the subsidiary. Ameriprise Bank is also subject to limits on capital
distributions, including payment of dividends to us and on transactions with affiliates. In addition, an array of community
reinvestment, fair lending, and other consumer protection laws and regulations apply to Ameriprise Bank. Either of the OTS or
the FDIC may bring administrative enforcement actions against Ameriprise Bank or its officers, directors or employees if any of
them are found to be in violation of the law or engaged in an unsafe or unsound practice.
In addition, the SEC, OTS, U.S. Departments of Labor and Treasury, FINRA, other self-regulatory organizations and state
securities, banking and insurance regulators may conduct periodic examinations. We may or may not receive advance notice
of periodic examinations, and these examinations may result in administrative proceedings, which could lead to, among other
things, censure, fine, the issuance of cease-and-desist orders or suspension or expulsion of a broker-dealer or an investment
adviser and its officers or employees. Individual investors also can bring complaints against our company and can file those
complaints with regulators.
Our Asset Management business is regulated by the SEC and the UK Financial Services Authority (‘‘FSA’’). Our European fund
distribution activities are also subject to local country regulations. Our Australian CDO management business is regulated by
the Australian Securities and Investment Commission (‘‘ASIC’’).
Our trust company is primarily regulated by the Minnesota Department of Commerce (Banking Division) and is subject to
capital adequacy requirements under Minnesota law. It may not accept deposits or make personal or commercial loans. As a
provider of products and services to tax-qualified retirement plans and IRAs, certain aspects of our business, including the
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