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21 Cards in this Set
- Front
- Back
Initial application to register as a financial professional begins with:
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Name and address
Type of business to be conducted Qualifications and business history of any partner, officer, director, and any other person in a controlling position Financial condition and history Any injunction, admin order, felony conviction, or conviction of a securities-related misdemeanor Details regarding unsatisfied judgments or liens against the registrant Whether a bonding company has ever denied, paid out on, or revoked a bond for the registrant If info changes, file amendment (within 30 days) |
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Consent to Service of Process
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a document that irrevocably appoints the admin as the registered person's attorney for the service of legal papers
filed once, initially Can serve the Administrator as opposed to a person |
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Filing fee
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Paid at time of registration and annually upon renewal
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If two firms combine to become one firm
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The new firm can fill the unexpired portion of the registration term by filing an application - but the successor firm is not required to pay a new fee
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Examinations
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Applicants may be required to take an examination, but some people may be excused (CFA excused for Series 66)
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Surety bond
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insurance issued by a bonding company that agrees to pay the sum of money awarded by a court up to a certain amount, as a result of registrant's violations of the USA
applies to registered broker-dealers and agents that have custody of, or discretionary authority over, client funds or securities bonds not required of broker-dealers whose net capital exceeds specified minimum amounts as set by federal law registrants can deposit cash or securities instead of a bond also applies to investment advisers who have custody of/discretionary authority over client funds or securities - if their net worth exceeds a specified minimum amount set by the Administrator, a bond will not be required (IARs are not required to post bonds) |
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Provided no problems, registration becomes effective...
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...at noon on the 30th day after filing the application (or an amendment)
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All registrations of financial professionals expire on...
Annual renewal process is... |
...December 31st. Annual renewal = updating application and paying a fee. Consent to Service of Process doesn't have to be renewed.
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Net capital
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Admin may require broker-dealers to maintain at least a specified minimum amount of net capital (broker dealer's liquid net worth) - but it cannot exceed SEC regulations
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Advertising and sales literature
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Must be filed with Administrator, except for materials relating to exempt securities, exempt transactions, federal covered securities
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Maintenance requirements
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Account records, correspondence, books must be maintained as required by the Administrator -- records must be preserved for 3 years, with first 2 years in easily accessible location
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Financial reports
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filed with administrator quarterly, annually, or as often as determined
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Special examination
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All required records of a broker-dealer, whether located within or outside the state, are subject to periodic or special examination as determined by Admin
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Exclusions
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Some people do not meet the definition of broker-dealer, so they are not required to register
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Excluded from definition of broker-dealer
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Agents, issuers, banks, savings, and loan companies, savings institutions, and trust companies
Person that has no place of business in the state and only transacts business with issuers, other broker-dealers, financial institutions, or institutional buyers Person that has no place of business in the state and is registered where the person maintains her place of business and only conducts business with existing clients who are not residents of the state (eg on vacation, attending school) (essentially, if you have an office in the state you have to register in the state) Bank holding companies/bank subsidiaries are not excluded |
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Is a firm considered a broker-dealer in the state?
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1. identify the activity in which the firm is involved
2. determine if the firm has an office in the state yes - firm must register no - if clients are institutional, not required, if they are retail clients, the firm must register |
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Exclusions from agent of an issuer -- when the individual effects securities transactions:
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On behalf of an exempt issuer (US gov, Canadian gov, other specific foreign nat'l gov, securities of banks, trust companies, savings institutions)
When security is exempt (commercial paper, maturity of <9m, investment contracts for employees) When the sale is made through an exempt transaction -private placements -sales to qualified purchasers -transactions between an issuer and an underwriter -transactions with a trust company or savings institution -transactions involving the sale of the issuer's stock to partners, directors, or employees of the company, provided the transaction is initiated by the employee or an officer selling the stock of the company Individual cannot receive commission/compensation for the sale of the security to avoid reg as an agent |
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Agent of a broker-dealer
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The person must be registered, even if the security is exempt
Must be registered under USA, filing form U4 through CRD All parties must notify if transferring U5 filed if quitting |
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Agent can conduct business with an existing client without being registered in the state if:
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-(for up to 60 days) An agent's application for registration is pending in a state, provided: agent is eligible to register, agent's broker dealer is registered in that state, agent is registered with a national securities association (eg FINRA), agent is registered in at least one other state
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Partners, officers, directors of a broker-dealer are automatically registered as agents
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When the broker-dealer initially registers
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Canadian broker-dealers and agents
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broker-dealers and agents that are properly registered in canada and have no place of business in a state are exempt from certain provisions of USA (except antifraud)
Also with people from Canada who are temporarily in a state NAFTA did not expand this to Mexico **broker dealer summary -- 3-11** |