(a) For any broker-dealer that participates
in the Central Registration Depository ("CRD"), the application for a
certificate as a broker-dealer shall be filed as follows:
(1) INITIAL APPLICATION: The application for
a certificate as a broker-dealer pursuant to subsection (a) of Section 25211 of
the Code and an amendment to such application pursuant to Section 260.241.4
shall be filed upon Form BD (Uniform Application for Broker-Dealer
Registration,
17 C.F.R. § 249.501 ) in accordance with the form
instructions and by filing the form with CRD for transmission to the
Commissioner.
(A) An applicant that files an
application through CRD shall complete a Customer Authorization of Disclosure
of Financial Records, set forth in Section
260.231(i) of these rules, and
maintain the form in the applicant's books and records as provided in Section
25241 of the Code. The applicant shall provide the form to the Commissioner
upon request.
(B) Upon reviewing
the application, the Commissioner may require the applicant to submit the
following information:
1.A balance sheet as
of a date within 45 days prior to the filing of the application, which need not
be audited. If the balance sheet is not audited, the applicant shall file, in
addition, an audited balance sheet as of the end of applicant's last fiscal
year.
2.A calculation of the net
capital and the ratio of net capital to aggregate indebtedness of the
applicant, in accordance with Section 260.216.12 of these rules, as of the same
date as the balance sheets submitted under paragraph (B)1. above.
3.Copies of all currently effective
subordination agreements. If any are substantially similar, attach one copy of
the most standard form(s) and a schedule(s) showing the name and address of
each lender and the dollar value of the subordinated items on each agreement.
(C) The Commissioner
may request additional information, documentation or detail pertaining to Form
BD (Uniform Application for Broker-Dealer Registration,
17 C.F.R. §
249.501 ) to be filed directly with the Commissioner.
(2) FILING FEE: The fee for filing an initial
application is $300 as prescribed in Section 25608(o) of the Code. The
applicant shall remit the fee directly with CRD in accordance with its
procedures for transmission to the Commissioner. Fees are not refundable except
pursuant to Section 250.15 of these rules.
(3) COMPLETION OF FILING: For the purposes of
Section 250.51, an application for a certificate as a broker-dealer is not
deemed filed until the required fee and all required submissions are received
by the Commissioner. The filing of Form BD (Uniform Application for
Broker-Dealer Registration,
17 C.F.R. § 249.501 ) with CRD does not
constitute automatic approval. The broker-dealer shall not consider the
application approved until approved by the Commissioner and the approval is
received through CRD.
(b) For any broker-dealer that does NOT
participate in the CRD, the application for a certificate as a broker-dealer
shall be filed as follows:
(1) INITIAL
APPLICATION: The application for a certificate as a broker-dealer pursuant to
subsection (a) of Section 25211 of the Code and an amendment to such
application pursuant to Section 260.241.4(a) of these rules shall be filed upon
Form BD (Uniform Application for Broker-Dealer Registration,
17 C.F.R. §
249.501 ) in accordance with the form instructions and by filing the form
directly with the Commissioner at the Department of Business Oversight, 1515 K
Street, Suite 200, Sacramento, CA 95814-4052. In addition to Form BD, the
application shall include the additional documentation prescribed in
subsections (b)(1)(A) through (b)(1)(D) of this rule.
(A) Financial Statements:
1.Attach a balance sheet as of a date within
45 days prior to the filing of the application, which need not be audited. If
the balance sheet is not audited, the applicant shall file, in addition, an
audited balance sheet as of the end of applicant's last fiscal year.
2.Attach a calculation of the net capital and
the ratio of net capital to aggregate indebtedness of the applicant, in
accordance with Section 260.216.12 of these rules, as of the same date as the
balance sheets submitted under paragraph (A)1. above.
3.Attach copies of all currently effective
subordination agreements. If any are substantially similar, attach one copy of
the most standard form(s) and a schedule(s) showing the name and address of
each lender, and the dollar value of the subordinated items on each agreement.
4.Furnish the date applicant's
fiscal year ends.
5.Furnish
applicant's minimum net capital requirement.
A broker-dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934 may file a copy of its most recent annual
report of financial condition and its most recent quarterly financial report
required under 17 CFR
240.17a-5 in lieu of paragraphs (A)1. and
(A)2. above.
(B)
Organizational Information and Other Exhibits.
1.If applicant is a corporation, attach
copies of articles, by-laws, amendments and certification.
2.If applicant is a partnership, attach
partnership agreement and amendments.
3.If applicant is a limited liability
company, attach copies of its articles of organization and amendments.
4.If applicant will conduct
business under a fictitious name, attach a certified copy of the Fictitious
Business Name Statement required by Business and Professions Code Section
17910.
5.Attach a completed Customer
Authorization of Disclosure of Financial Records, set forth in Section
260.231(i) of these rules.
(C) Exhibits Required by Applicants Not
Registered Under The Securities Exchange Act of 1934 (
15 U.S.C. 78 a et seq.)
or Applicants Whose Agent Records are not on File with CRD.
1.Attach a statement demonstrating compliance
with the examination requirements of Section 260.217 of these rules.
2.Attach fingerprint information pursuant to
California Penal Code Section
11077.1 for
each person listed on Schedule A, B or C of Form BD (Uniform Application for
Broker-Dealer Registration,
17 C.F.R. § 249.501 ).
(D) The Commissioner may request additional
information, documentation or detail pertaining to Form BD (Uniform Application
for Broker-Dealer Registration,
17 C.F.R. § 249.501 ) to be filed with the
Commissioner.
(2)
FILING FEE: The fee for filing an initial application is $300 as prescribed in
Section 25608(o) of the Code. Checks shall be made payable to the DEPARTMENT OF
BUSINESS OVERSIGHT. Fees are not refundable except pursuant to Section 250.15
of these rules.
(3) COMPLETION OF
FILING: For the purposes of Sections 250.51 of these rules, an application for
a certificate as a broker-dealer is not considered filed until the required fee
and all required submissions are received by the Commissioner.
(e) SUCCESSIONS: In the event that a
broker-dealer succeeds to and continues the business of a broker-dealer holding
a current certificate, both the predecessor broker-dealer and the successor
broker-dealer shall follow Rule 15b1-3 under the Securities Exchange Act of
1934 (
17 C.F.R. § 240.15b1-3 ) for the filing of Form BD (Uniform
Application for Broker-Dealer Registration,
17 C.F.R. § 249.501 ), an
amendment to Form BD, or Form BDW (Uniform Application for Broker-Dealer
Withdrawal,
17 C.F.R. § 249.501a ), as applicable. Form BD shall be filed
in the manner set forth in subsection (a) or (b) of this section, as
applicable. An amendment to Form BD shall be filed in the manner set forth in
subsection (c) of this section. Form BDW shall be filed in the manner set forth
in Section 260.242 of these rules.
(f) The following notices required by state
and federal law are hereby incorporated as part of any uniform form:
NOTICES REQUIRED UNDER STATE AND FEDERAL LAW INFORMATION
PRACTICES ACT OF 1977 (California Civil Code Section
1798.17)
(a) The Department of Business
Oversight of the State of California, Securities Regulation Division, is
requesting the information specified in the application for registration,
qualification, a certificate or a license.
(b) The Chief Administrative Officer, the
Department of Business Oversight, 1515 K Street, Suite 200, Sacramento, CA
95814, telephone (916) 445-5541, is responsible for the system of records and
shall, upon request, inform individuals regarding the location of the
Department of Business Oversight's records and the categories of persons who
use the information in the records.
(c) The records are maintained pursuant to
the Corporate Securities Law of 1968 (Corporations Code Section
25000,
et seq.).
(d) The submission of all
items of information is mandatory unless otherwise noted. The Department of
Business Oversight is required to collect from all applicants social security
numbers under Family Code Section
17520, and
social security numbers or federal taxpayer identification numbers under
Business and Professions Code Section
494.5.
The Privacy Act of 1974 prohibits a state agency from denying an individual any
right, benefit or privilege provided by law because of the individual's refusal
to disclose the individual's social security account number.
(e) Failure to provide all or any part of the
information requested may preclude the Department of Business Oversight from
approving the application.
(f) The
principal purposes within the Department of Business Oversight for which the
information is to be used are to determine whether (1) a license,
qualification, registration, certificate or other authority should be accepted,
granted, approved, denied, revoked or limited in any way; (2) business entities
or individuals licensed or otherwise regulated by the Department of Business
Oversight are conducting themselves in accordance with applicable laws; and/or
(3) laws administered by the Department of Business Oversight are being or have
been violated and whether administrative action, civil action, or referral to
appropriate federal, state or local law enforcement or regulatory agencies, or
to a self-regulatory organization, as authorized by law, is
appropriate.
(g) Any known or
foreseeable disclosures of the information pursuant to subdivision (e) or (f)
of Civil Code Section
1798.24 may
include transfers to other federal, state, or local law enforcement or
regulatory agencies, or to a self-regulatory organization, as authorized by
law.
(h) Subject to certain
exceptions or exemptions, the Information Practices Act grants an individual a
right of access to personal information concerning the requesting individual
that is maintained by the Department of Business Oversight.
FEDERAL PRIVACY ACT OF 1974 ( Public Law 93-579 )
In accordance with Section 7 of the Privacy Act of 1974
(found at 5 U.S.C. § 552a note (Disclosure of Social Security Number)),
the following is information on whether the disclosure of a social security
account number is voluntary or mandatory, by what statutory or other authority
such number is solicited, and what uses will be made of it.
(1) The Department of Business Oversight is
required to collect from all applicants social security numbers under Family
Code Section
17520, and
social security numbers or federal taxpayer identification numbers under
Business and Professions Code Section
494.5.
The Privacy Act of 1974 prohibits a state agency from denying an individual any
right, benefit or privilege provided by law because of the individual's refusal
to disclose the individual's social security account number.
(2) A social security account number or
federal taxpayer identification number is solicited pursuant to one or more of
the following authorities: Sections 25210, 25211,25230, 25230.1, 25231, and
25241 of the Corporations Code; Sections 260.211, 260.211.1,
260.231,260.231.2,
260.236.1, and
260.236.2 of Title 10, California
Code of Regulations; Section
17520 of the
Family Code; and Section
494.5
of the Business and Professions Code.
(3) For all persons disclosing a social
security account number or federal taxpayer identification number, the number
is used to match the information to the names on the list provided by the
Department of Child Support Services under Family Code Section
17520, and the
lists of tax delinquencies provided by the State Board of Equalization and the
Franchise Tax Board under Business and Professions Code Section
494.5
The social security number may be used, in addition to other information
provided, to conduct a background investigation of the individual by the
Department of Justice's Identification and Information Branch or by other
federal, state or local law enforcement agencies, or a self-regulatory
organization, as authorized by law. The social security number may also be used
to respond to requests for this number made by child support agencies.
NOTICES REGARDING TAXPAYER INFORMATION
(4) The State Board of Equalization and the
Franchise Tax board are authorized to share taxpayer information with the
Department of Business Oversight and in the event the state tax obligation is
not paid by a certificate holder after a certificate is issued, the Department
of Business Oversight may be required to suspend the certificate.