Registration & Licensing - Requirements Flashcards
Can a broker-dealer or agent transact business in a State as such without being registered there?
No.
What do broker-dealers use to register with the SEC?
Form BD
Do BDs register with the SEC or a SRO (self-regulatory organization) first?
The SEC. Then the BD registers with an SRO like FINRA. Form BD has the broker-dealer check off the SRO(s) to which it is applying for membership.
How does a BD register in the State?
Form BD has the broker-dealer check off the States it wants to register in. The State(s) then uses the SEC approved BD application as the basis for registering the BD in the State so long as the registration fee is paid.
Can an agent be employed by a broker-dealer without being registered?
No.
What happens if an agent is no longer employed by a given firm?
His registration ceases to be effective in the State.
Can agents be affiliated with more than one BD at a time?
No - though some states allow “dual registration”
What is required of an agent if the State Administrator allows multiple registrations for an agent?
A separate registration application is filed by the agent through each broker-dealer. Part of the application is a disclosure to the broker-dealer of any other current registrations held by that agent.
What is an agent required to do when he begins or terminates employment with a broker-dealer?
Promptly notify the State’s Administrator.
What happens if a broker-dealer loses its registration?
Its agents are no longer registered with that firm, but they may associate with another firm who “picks up” their registration.
What happens to a broker-dealer if an agent loses his or her registration?
No effect.
Can agents register individually with the State Administrator?
No - their registration is performed through the broker-dealer.
Firms EXCLUDED from the definition of broker-dealer - broad summary
A broker-dealer is excluded from registration if:
The firm has no place of business in a State and transacts solely with issuers, other broker-dealers, and institutional investors;
The firm has no place of business in a State where an existing customer is vacationing and contacts the customer in that State.
Firms considered EXEMPT from definition of broker-dealer
Canadian broker-dealers with no place of business in a State, whose customers are temporarily residing in that State for less than 1/2 year and who intend to return to Canada.
Are agents associated with excluded or exempt broker-dealers required to register with the State?
No.