Utah Admin. Code R628-16-6 - Application to Become a Certified Dealer

Current through Bulletin No. 2021-18, September 15, 2021

A. Any broker-dealer wishing to become a certified dealer under the State Money Management Act must submit an application to the Utah Securities Division.
B. The application must include:
(1) Primary Reporting Dealers: Proof of status as a primary reporting dealer, including proof of recognition by the Federal Reserve Bank, if applicant is a primary reporting dealer.
(2) Office Address: The address of the applicant's principal office. Broker-dealers who are not primary reporting dealers must have and maintain an office and a resident principal in Utah; the application shall include the address of the Utah office and the identity of the resident principal.
(3) Broker-Dealer Registration: Proof of registration with the Division under its laws and rules, effective as of the date of the application, of the following:
(a) the broker-dealer;
(b) its resident principal (if one is required); and
(c) any agents of a firm doing business in the state of Utah.
(4) Corporate Authority: A Certificate of Good Standing, obtained from the state in which the applicant is incorporated. An applicant who is a foreign corporation also must submit a copy of its Certificate of Authority to do business in Utah, obtained from the Corporations Division of the Department of Commerce (hereinafter the "Corporations Division").
(5) Financial Statements: With respect to applicants who are not primary reporting dealers, financial statements, prepared by an independent certified public accountant in accordance with generally accepted accounting principles, indicating that the applicant has, as of its most recent fiscal year end:
(a) Net Capital: Minimum net capital, as calculated under rule 15c3-1 of the General Rules and Regulations under the Securities and Exchange Act of 1934 (the Uniform Net Capital Rule), of at least 5% of the applicant's aggregate debt balances, as defined in the rule, and;
(b) Total Capital: Total capital as follows:
(i) of at least $10 million or;
(ii) of at least $25 million, calculated on a consolidated basis, with respect to an applicant which is a wholly-owned subsidiary.
(6) Government Securities Act Registration: Proof of the firm's registration under the Government Securities Act of 1986 (100 Stat 3208).
(7) Account Documents: Copies of all agreements, contracts, or other documents that the applicant requires or intends to require to be signed by the public treasurer to open or maintain an account. These documents must meet the following requirements:
(a) The Director shall not certify any applicant who requires, or proposes to require, that any dispute arising out of transactions between the applicant and the public treasurer must be submitted to arbitration. The applicant must provide copies of agreements signed or to be signed, which allow the public treasurer to select the forum and method for dispute resolution, whether that forum be arbitration, mediation or litigation in any state or federal court.
(b) Any customer agreement shall provide that suit may be litigated in a Utah court, and that Utah law shall apply in settling disputes, where relevant.
(8) Knowledge of Money Management Act: A notarized statement, signed by a principal and by any agent who has any contact with a public treasurer or its account, that the agent is familiar with the authorized investments as enumerated in Section 51-7-11(3) and the rules of the Council, and with the investment objectives of the public treasurer, as set forth in Section 51-7-17(1).
(9) Fee: A non-refundable fee as described in Section 51-7-18.3(2), payable to the Division.

Notes

Utah Admin. Code R628-16-6

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