(1)
Definitions:
(a) "Division" means the
Division of Insurance, South Dakota Department of Labor and
Regulation.
(b) "CRD" means the
Central Registration Depository.
(c) "NASAA" means the North American
Securities Administrators Association, Inc.
(d) "OSJ" means Office of Supervisory
Jurisdiction as referenced in the FINRA Manual IM-1000-4 under Rule 3010 and
defined in Rule 3010(g)(1).
(e)
"FINRA" means the Financial Industry Regulatory Authority, Inc.
(2) Broker-dealer registration,
supervision, post registration, renewal, and withdrawal requirements:
(A) Registration: Except as set forth in
subdivision (2)(F) of this section, to register as a broker-dealer the
applicant must be a member of FINRA, and file with the CRD the following:
(i) SEC Form BD (Uniform Application for
Broker-Dealer Registration); and
(ii) The registration fee pursuant to SDCL
47-31B-410(a).
A certificate of registration will not be issued. Proof of
status is available from the CRD.
(B) Supervision:
(i) Every registered broker-dealer must
employ at its principal office and at each office of supervisory jurisdiction
(OSJ) in this state, at least one person designated to act in a supervisory
capacity, who is registered as an agent in this state and has satisfied the
supervisory examination requirements of FINRA. For any other office in this
state, not designated as an OSJ, a supervisor must be designated to supervise
the office; however, the supervisor need not be located in this state, but must
be registered in this state as an agent and satisfy the supervisory examination
requirements of FINRA.
Failure to abide by this subdivision for more than 30 days,
may result in revocation or the suspension of the registered broker-dealer
until such time as there is compliance with this rule.
(C) Post registration:
(i) The applicant must file amendments to SEC
Form BD in accordance with the instructions on those forms with the CRD only.
(ii) The applicant must file SEC
Form X-17A-5 FOCUS reports in a timely manner with FINRA. However, the division
may request applicant to provide a copy of the FOCUS report.
(D) Registration renewal
requirements:
(i) All registrations expire on
December 31 of each year.
(ii) To
renew registration, the applicant must submit to the CRD the registration fee
pursuant to SDCL
47-31B-410(a)
before December 31.
(E)
Registration withdrawals:
(i) To withdraw a
registration, the applicant must file with the CRD, or with the division if not
required by the CRD, SEC Form BDW (Uniform Request for Withdrawal from
Registration as a Broker-Dealer).
(ii) A withdrawal is effective 30 days
following receipt of SEC Form BDW, unless the division notifies the applicant
otherwise.
(F)
Intrastate broker-dealers:
Every broker-dealer registered or required to be registered
under SDCL chapter 47-31 B, whose business is exclusively intrastate, who does
not make use of any facility of a national securities exchange and who is not
registered under section 15 of the Securities Exchange Act of 1934, shall be
subject to the same broker-dealer requirements as set forth above, except that
an intrastate broker-dealer does not need to be a member of FINRA and those
documents required to be filed with the CRD shall be filed with the
division.
(3)
Broker-dealer agent registration, post registration, renewal and withdrawal
requirements.
(A) Broker-dealer agent
registration:
To register as a broker-dealer agent, the applicant or the
sponsoring broker-dealer must file with the CRD the following, in addition to
any information required by FINRA, the CRD, or the SEC:
(i) FINRA Form U-4 (Uniform Application for
Securities Industry Registration or Transfer);
(ii) Proof that the applicant passed the
Series 63 examination (Uniform Securities Agent State Law Examination) or the
Series 66 examination (Uniform Combined State Law Exam) which are administered
by FINRA, and any other exams required by the SEC or FINRA; and
(iii) The registration fee pursuant to SDCL
47-31B-410(b)
and in the form of payment prescribed by the CRD.
A broker-dealer agent must re-take and pass the Series 63
Exam or the Series 66 Exam if the agent's most recent registration terminated
two or more years before the date of receipt by the division of a new
application.
A broker-dealer agent, who has been registered as a
broker-dealer agent in any jurisdiction in the United States prior to January
1, 1989, is not required to pass the Series 63 examination provided there has
never been a lapse of registration of more than two years. The director may
require additional examinations for any individual found to have violated any
state or federal securities law.
An out-of-state agent must be registered or exempt from
registration in the agent's home state as a precondition of being considered
for registration in South Dakota. The burden of proof for claiming an exemption
is on the agent.
A certificate of registration will not be issued. Proof of
status is available from the CRD.
(B) Broker-dealer agent post registration:
(i) The applicant must file amendments to
FINRA Form U-4 in accordance with the instructions on this form with the CRD
only.
(C) Broker-dealer
agent renewal requirements:
(i) All
registrations expire on December 31 of each year.
(ii) To renew registration, the applicant
must submit to the CRD the renewal fee pursuant to SDCL
47-31B-410(b)
before December 31.
(D)
Broker-dealer agent withdrawal requirements:
(i) To withdraw a registration or
application, the applicant must file with the CRD, FINRA Form U-5 (Uniform
Termination Notice for Securities Industry Registration).
(ii) A withdrawal is effective 30 days
following receipt of FINRA Form U-5, unless the division notifies the applicant
otherwise.
(E) Dual
registration:
A dual registration may be allowed by the director if:
(i) The applicant requests a dual
registration in writing to the division which identifies the broker-dealers
with which the applicant will associate and set forth the reasons for the dual
registration;
(ii) Both
broker-dealers with which applicant intends to associate represent in writing
to the division that each assumes full responsibility for applicant at all
times; and
(iii) The applicant
discloses the dual registration to each client.
(F) Agents of an Intrastate Broker-Dealer:
Every agent of a broker-dealer registered or required to be
registered under SDCL chapter 47-31B whose business is exclusively intrastate,
who does not make use of any facility of a national securities exchange and who
is not registered under section 15 of the Securities Exchange Act of 1934, is
subject to the same broker-dealer agent requirements as set forth in ยง
20:08:03:01, except that an agent of an intrastate broker-dealer does not need
to be a member of FINRA and those documents required to be filed with the CRD
shall be filed with the division.
(4) Agent of the issuer, registration
requirements:
(A) To register as an agent of
the issuer, the applicant or the sponsoring issuer must file with the division
the following:
(i) FINRA Form U-4 with
original signatures;
(ii) Proof
that the applicant passed the Series 63 Exam or the Series 66 Exam; and
(iii) The fee as set forth in SDCL
47-31B-410(b).
An agent of the issuer must re-take and pass the Series 63
Exam or the Series 66 Exam if the agent's most recent registration terminated
two or more years before the date of receipt by the division of a new
application.
A certificate of registration will not be issued.
(B) Agent of the issuer
post registration:
(i) An agent of the issuer
must promptly file with the division amendments to FINRA Form U-4 or any other
information which materially changes the information on file with the
division.
(C)
Registration renewals for agents of the issuer:
To renew a registration, the applicant must file the
following with the division before December 31 of each year;
(i) FINRA Form U-4 with original signatures;
and
(ii) The fee as set forth in
SDCL
47-31B-410(b),
to be submitted to the South Dakota Division of Insurance.
All registrations expire on December 31 of each year.
(D) Registration
withdrawal requirements:
(i) To withdraw a
registration, the applicant must file a written request for withdrawal with the
Division on Form U-5.
(ii) A
withdrawal is effective 30 days following receipt of the written request for
withdrawal, unless the division notifies the applicant otherwise.
(iii) If an agent of the issuer applies for
registration with two or more issuers in a twelve-month period, the division
may deem the agent to be a broker-dealer and require the agent to register as a
broker-dealer.
(5)
Registration transfers:
A broker-dealer or broker-dealer agent may transfer a
registration by following CRD procedures. The division recognizes and
participates in the NASAA/CRD Temporary Agent Transfer ("TAT") program and will
honor transfers effected through TAT procedures.
Notes
S.D. Admin. R.
20:08:03:01
27 SDR 5, effective
July 31, 2000; 28 SDR 48, effective October 10, 2001; 30 SDR 58, effective
November 5, 2003; 30 SDR 211, effective July 1, 2004; 37 SDR 112, effective
December 9, 2010;
44
SDR 99, effective
12/11/2017
General Authority: SDCL
47-31B-402(e),
47-31B-410(f),
47-31B-411(b),
47-31B-412(e),
47-31B-503,
47-31B-605(a)(1)
to (3), inclusive,
47-31B-605(b).
Law Implemented: SDCL
47-31B-103,
47-31B-401,
47-31B-402,
47-31B-406,
47-31B-408,
47-31B-409,
47-31B-410,
47-31B-412(e).
