Rule 590-4-5-.01 Application Requirements
(1) | Broker-dealer application requirements. A complete application for broker-dealer registration consists of the following and must be filed in paper form with the Commissioner unless as otherwise required pursuant to subsection (4) of this Rule:
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(2) | Designated officer registration. Broker-dealers must file a Form U-4 application to register an officer or partner in connection with the registration of the broker-dealer. The officer or partner must be a control person of the broker-dealer as defined by federal law, rule, or regulation. The officer or partner must complete the necessary registration and examination requirements. An applicant may designate as its officer or partner a control person registered in Georgia via the Central Registration Depository ("CRD") System maintained by FINRA. If the officer or partner resigns or is otherwise removed from his or her position, the firm shall make an application to register another officer or partner within thirty (30) days of the effective date of said resignation or removal. |
(3) | Branch office registration and inspection. A request for registration of a branch office of a broker-dealer may be made upon initial application of the broker-dealer or by amendment to a current registration. No sales-related activity may occur in any branch office location until such time as the broker-dealer receives notification from the Commissioner that such location has been approved as a branch office. The request for registration of a branch office may be made by the submission of Uniform Branch Office Registration Form (Form BR) through CRD for FINRA member firms. For non-FINRA member firms, the request is made by submitting Form BR in paper form to the Commissioner. The fee for registration of each branch office is $25.00. Simultaneous with the request for registration of a branch office, a supervisor must be designated. A supervisor is not required to be registered as a FINRA principal, but must be registered in Georgia as an agent and is responsible for supervision of the activities of the branch office. A supervisor may not supervise sales activities encompassing a broader range of products than those covered by the supervisor's qualification examination(s). Within ten (10) business days from when a supervisor ceases to be employed or registered in such capacity by the broker-dealer, a new supervisor, qualified by passage of the appropriate examinations, must be designated. Absent the designation of a new supervisor to the Commissioner within the ten (10) business day period, the registration of a branch office whose supervisor ceases to be employed as such by a broker-dealer may be automatically terminated by the Commissioner. The branch office registration may be reinstated by the Commissioner upon the designation of a qualified supervisor and payment of the branch office registration fee. Each branch office registered with the Commissioner is subject to unannounced inspections at any time during normal business hours. |
(4) | Central Registration Depository System (CRD).
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Rule 590-4-5-.02 Examination
(1) | Broker-dealer. Unless specifically exempt as hereinafter provided, before a broker-dealer applicant will be considered eligible for registration, the broker-dealer examinations in the form and content prescribed or approved by the Commissioner must be passed, to the extent required by this Rule, by every principal as defined by federal law, rule, or regulation of a broker-dealer in order to test the principal's knowledge of the securities business, state and federal securities laws, and the responsibilities of a supervisor in the securities business. |
(2) | Examinations accepted. The Commissioner recognizes the following general examinations administered by FINRA, and an applicant applying to be registered as a broker-dealer shall provide proof to the Commissioner that its principals have passed:
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(3) | Broker-dealer agent. The Commissioner recognizes the following general examinations, and an applicant applying to be registered as an agent shall provide proof to the Commissioner that the applicant has passed within the two-year period immediately preceding the date of the application, except in regards to the Securities Industry Essentials (SIE) Exam which the applicant shall take and pass within the four-year period immediately preceding the date of the application:
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(4) | An applicant who wishes to rely upon his or her passing any examination other than those enumerated in Paragraphs (2) or (3) above or who wishes to request a waiver of the examination requirements of this Rule must submit a written request for consideration identifying the examination in question, its content, and the agency administering the examination, or the reason why a waiver should be granted by the Commissioner. The Commissioner may decide whether to accept such examination results or to grant a waiver of the examination requirements. |
(5) | Any person whose most recent registration as a broker-dealer or agent has been terminated for two (2) or more years immediately preceding application to the Commissioner for registration shall be required to pass the Series 63 Uniform Securities Agent State Law Examination administered by FINRA and any other examination required by the Commissioner pursuant to this Rule. The Commissioner may find the applicant qualified by other examinations or significant and comprehensive experience or expertise in the securities business. |
(6) | The Commissioner may cooperate with registered securities associations and national securities exchanges in devising and administering tests, and require that applicants pay such association or reasonable exchange fees or charges to defray the costs incurred by such association or exchange in administering the tests. |
Rule 590-4-5-.03 Termination or Withdrawal of Registration
(1) | If the Commissioner determines that a registrant or applicant for registration is no longer in existence, has ceased to act as a broker-dealer or agent, is the subject of an adjudication of incapacity, is subject to the control of a committee, conservator or guardian, or cannot reasonably be located, the Commissioner may issue an order that requires the registration to be canceled or terminated or the application to be denied or may cancel or terminate the registration or applicant's status on the CRD. The Commissioner may reinstate a canceled or terminated registration, with or without a hearing, and may make the registration retroactive. |
(2) | The entry of such an order by the Commissioner shall constitute a final order, shall be deemed to be in the public interest and shall not be deemed to constitute findings of fact or conclusions of law related to other persons. The entry of such an order shall not be deemed to be a waiver or estoppel on the part of the Commissioner from proceeding in individual actions against any persons who may have violated the Act, nor shall such an order prevent the Commissioner from bringing individual actions against any persons who have violated the Act or Rules, if such violation was not known to the Commissioner at the time the order was issued. |
(3) | No broker-dealer or issuer shall employ any agent who is not registered as required by the Act, and each such broker-dealer or issuer shall promptly notify the Commissioner of its termination of such agent's employment. The registration of such agent shall automatically be terminated from the time of termination of employment. Said notification may be accomplished by filing the necessary documents with the CRD. If the agent is not registered with the CRD, notification shall be accomplished by filing a Uniform Termination Notice for Securities Industry Registration (U-5 Form) with the Commissioner. As used herein, the word "promptly" means that the U-5 Form should be filed as soon as possible, consistent with the time period specified in the CRD filing procedures. |
(4) | To withdraw a broker-dealer registration, a broker-dealer that is a FINRA member must submit a Form BDW (Uniform Request for Broker-Dealer Withdrawal) to the CRD. Non-FINRA member broker-dealers must submit Form BDW to the Commissioner's office. |
(5) | Effective Date. Every notice of withdrawal filed pursuant to this Rule shall become effective sixty (60) days after the filing with CRD, or within such shorter period of time as the Commissioner may determine. If, prior to the effective date of any notice of withdrawal, the Commissioner has instituted a proceeding to suspend or revoke registration or to impose terms or conditions upon withdrawal pursuant to Section 10-5-41 of the Act, the notice of withdrawal shall not become effective except at such time, and upon such terms and conditions, as the Commissioner deems necessary or appropriate considering the public interest or the protection of investors. |
Rule 590-4-5-.04 Incomplete and Abandoned Applications
(1) | An application for registration as a broker-dealer or agent pursuant to the Act is considered filed when the Commissioner receives the application and required filing fees. |
(2) | Any application for registration as a broker-dealer or agent is deficient if any of the following conditions exist:
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(3) | When an application is found to be deficient, the Commissioner may send a deficiency letter to the applicant stating the grounds of deficiency and, if the applicant is an agent, to the broker-dealer or issuer who employs or proposes to employ such applicant. Any application for registration as a broker-dealer or agent shall be deemed to be abandoned by the applicant if the Commissioner receives no communication from the applicant for a period of sixty (60) days. Upon declaring that the application is abandoned, the Commissioner may unilaterally and without further notice to the applicant dismiss the application and change the status of the application on the CRD to "abandoned." |
Rule 590-4-5-.05 Plan Administrators - Exclusion from Broker-Dealer Definitions
Entities that administer the types of plans described in Section 10-5-11(21) of the Act on behalf of the entities described in Section 10-5-11(21) of the Act are excluded from the broker-dealer definition of Section 10-5-2(3) of the Act, unless they meet such definition by virtue of other activities or characteristics not strictly related to the administration of such plans.
Rule 590-4-5-.06 Books and Records
(1) | All broker-dealers and agents who are registered or required to be registered with the SEC or are members of FINRA or any national securities exchange registered with the SEC shall make, keep and preserve such records as the SEC, FINRA, and national securities exchanges registered with the SEC require be made, kept, and preserved. These records shall be subject to inspection by the Commissioner. The records of a broker-dealer and agent registered or required to be registered under the Act are subject to such reasonable periodic or special inspections by a representative of the Commissioner as the Commissioner considers necessary or appropriate in the public interest and for the protection of investors. An inspection may be made at any time and without prior notice. The Commissioner may copy and remove any record the Commissioner reasonably considers necessary or appropriate to conduct the inspection. The fee for a routine examination of a broker-dealer shall be thirty-five (35) dollars per working hour with the total fee not to exceed $1,000. |
(2) | Broker-dealers that are not registered with the SEC or are not members of FINRA or of any national securities exchange registered with the SEC shall make and keep the following records:
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(3) | Broker-dealers not registered with the SEC or not members of FINRA or of any national securities exchange registered with the SEC shall preserve for a period of not less than five (5) years, the first two (2) years in an easily accessible place, the records required to be maintained by Sections (1) or (2) above and the following:
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(4) | Broker-dealers not registered with the SEC or not members of FINRA or of any national securities exchange registered with the SEC that buy and sell securities or hold securities for the account of customers shall preserve for a period of not less than five (5) years after the closing of any customer's account, for the first (2) two years in an easily accessible place, all account cards, records or other documents that relate to the opening and maintenance of any customer's account, including all records and documents relating to the terms and conditions of such account (in paper or electronic media storage). |
(5) | Broker-dealers not registered with the SEC or not members of FINRA or of any national securities exchange registered with the SEC that buy and sell securities or hold securities for the account of customers shall maintain and preserve all records with respect to "associated persons" required by Subsection (2)(l) above and all similar records required to be kept by other agencies for a period of at least five (5) years after the employment of the "associated person" has terminated and he or she has no other connection with the broker-dealer. |
(6) | Broker-dealers not registered with the SEC or members of FINRA or of any national securities exchange registered with the SEC that do not hold securities for the account of customers and whose securities transactions are limited to selling securities shall make and maintain the following records:
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(7) | Every broker-dealer shall preserve, during the life of the enterprise and of any successor enterprise, all partnership articles or, in the case of a corporation or limited liability company, all articles of incorporation or charter, minute books and stock certificate books or similar documents. |
(8) | Agents who are not subject to the record keeping requirements of the SEC, FINRA or any national securities exchange registered with the SEC shall make and maintain for five (5) years, for the first (2) two years in an easily accessible place, a record of all commissions, overrides, draws, salary, expenses and other compensation or remuneration received in connection with his or her securities sales efforts and the following records with respect to every sale of securities in which such
agent participates in any way:
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(9) | Any record required by this Rule to be preserved and maintained may, after it is no longer required to be kept in an easily accessible place, be maintained in any form admissible into evidence pursuant to Code Section 24-5-26. Such records may be thus maintained at any time if equipment for viewing and reproducing such records is immediately accessible and any cost of such viewing or reproduction will be borne by the broker-dealer or agent. |
(10) | Any broker-dealer that is registered with the SEC, is a member of FINRA or is a member of any national securities exchange registered with the SEC that fulfills the reporting requirements of the SEC, FINRA or national securities exchange, as it is required, shall be deemed to be in compliance with reporting requirements of the Act and the Rules. |
Rule 590-4-5-.07 Reports
(1) | For every broker-dealer registered under the Act, the following are the requirements for filing reports:
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(2) | Each report of financial condition prepared under Subsection (1) shall be prepared in accordance with the following requirements:
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(3) | The requirements for the use of certain statements filed with the SEC and national securities exchanges are as follows:
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(4) | In the event any broker-dealer finds that it cannot prepare its report for any year within the time specified in Subsection (1) or (3) without undue hardship, it may file with the Commissioner an application for an extension of time to a specified date, which shall not be more than ninety (90) days after the date as of which its financial condition is reported. The application shall state the reasons for the requested extension and contain an agreement to prepare the report on or before the specified date. |
(5) | The Commissioner may provide by order for the electronic filing of the reports required under this Rule. |
Rule 590-4-5-.08 Bonds
(1) | Except as otherwise provided for in this Rule, no applicant or broker-dealer that has custody of, or discretionary authority over, funds or securities of a customer or client shall be registered or renewed as a broker-dealer under Article 4 of the Act until the applicant files a bond satisfactory to the Commissioner in the amount of $25,000.00. |
(2) | The bonding requirements of this Rule shall not be applicable if broker-dealer:
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(3) | The Commissioner may, at any time, order a broker-dealer to provide additional proof of financial responsibility if the Commissioner determines that is necessary to adequately protect investors. |
(4) | The requirement for the filing of such bond by an applicant for registration or renewal as a broker-dealer or agent shall not be applicable if exempted or preempted by federal law. |
Rule 590-4-5-.09 Notice of Changes in Circumstances
(1) | Every broker-dealer or applicant shall promptly notify the Commissioner, in writing, of any material change in any information, exhibits or schedules disclosed in the application. A correction amendment shall be filed at the time of the occurrence or promptly after discovery of the change. Material changes include, but are not limited to, the following:
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(2) | Every agent or applicant shall promptly notify the Commissioner in writing of any material changes in any information, exhibits or schedules disclosed in his or her application. A correction amendment shall be filed at the time of the occurrence or promptly after discovery of the change. Material changes include, but are not limited to, the following:
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(3) | Any broker-dealer or agent who fulfills the reporting requirements of CRD shall be deemed to be in compliance with reporting requirements of the Act and the Rules. |
Rule 590-4-5-.10 Fees
(1) | A person required to pay a filing or notice fee under Section 10-5-39 shall transmit the fee through CRD. |
(2) | In addition to the above fees, each applicant shall pay any and all processing costs or charges imposed by CRD incident to the registration or renewal. |
(3) | Each applicant shall pay a $5.00 processing fee made payable through CRD. No portion of the processing fee is refundable. Applications will not be accepted, and thus will not be considered filed by the Commissioner, until registrants have paid the processing fee. The fee shall be effective for applications filed after December 31, 2021. |
Rule 590-4-5-.11 Broker-Dealer Post-Registration Requirements
Financial Requirements. Any broker-dealer that is not registered with the SEC, is not a member of FINRA, or is not a member of any national securities exchange registered with the SEC must have sufficient assets to meet its obligations as they mature. A broker-dealer will be considered to have sufficient assets to meet its obligations as they mature if:
(a) | In the case of a broker-dealer who proposes to buy and sell securities or hold securities for the account of customers:
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(b) | In the case of a broker-dealer who proposes only to sell securities and will not hold securities for the account of customers, has not less than $5,000 net worth and not less than $5,000 in liquid assets. |
Rule 590-4-5-.12 Supervisory Requirements
(1) | Every broker-dealer registered, or required to be registered, under the Act shall exercise diligent supervision over the activities of its agents and associated persons.
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(2) | It shall be the responsibility of each broker-dealer to ensure that all broker-dealer and agent disciplinary data required by the Act and these Rules is promptly and accurately reported in accordance with the requirements of the CRD, or as the Commissioner may designate for broker-dealers that are not registered with the SEC, are not members of FINRA or are not members of any national securities exchange registered with the SEC. |
(3) | Every issuer who employs any broker-dealer or agent in connection with the sale of securities shall comply with the supervision requirements as set forth in the Act and these Rules. |
Rule 590-4-5-.13 Expiration and Renewal of Registration
(1) | All broker-dealer and agent registrations expire at midnight on December 31 of each year. |
(2) | All procedures, renewal schedules and fee collection methods announced by the CRD shall be applicable to registration renewals processed through the CRD for broker-dealers or agents. |
(3) | Except as otherwise provided in Subsection (4) below, all renewal applications must be filed with all necessary information and required filing fees no earlier than October 1st and no later than December 31st of each year. |
(4) | An application for renewal registration as a broker-dealer or agent shall be filed consistent with instructions from FINRA as operators of the CRD, shall contain the fee required by the Act and shall contain such amendments to the initial registration as may be required by the applicable provisions of the Act or these Rules. |
(5) | Agents or broker-dealers who are registered through the CRD shall submit an annual renewal fee directly through the CRD. Any agent or broker-dealer bond or evidence of the continuation of an agent or broker-dealer bond shall be sent directly to the Commissioner. |
(6) | Unless otherwise provided by the Commissioner, renewal of registration as a broker-dealer or agent shall be effective when the Commissioner has received notice from the CRD that all fees have been paid and when the required bond has been filed with the Commissioner. |
(7) | During the period after the broker-dealer registration has expired (January 1) and before the effectiveness of the renewal application, the broker-dealer shall have no authority to transact securities business in Georgia. |
Rule 590-4-5-.14 Multiple Registration
(1) | An individual may apply to be registered as an agent for more than one broker-dealer by the filing of a separate U-4 application through CRD by each registered broker-dealer and the payment of separate application fees, as required, through CRD. The Commissioner may deny the multiple registration applications if he or she determines that it is not in the best interests of the public. By having the multiple registration applications submitted on his or her behalf, the agent affirmatively represents that he or she will make all disclosures to his or her clients and the affected broker-dealers regarding actual or potential conflicts of interests. |
(2) | Each broker-dealer that employs a multiple registered agent shall comply with the requirements of CRD regarding the multiple registration of agents. |
(3) | Nothing in this Rule shall relieve the broker-dealer for whom an agent is actually acting of the responsibilities imposed by the Act and the Rules for the transactions of each agent. |
Rule 590-4-5-.15 Cross Border Transaction
(1) | A broker-dealer that is registered in Canada or other foreign jurisdiction and that does not have a place of business in Georgia may effect transactions in securities with, or for, or attempt to, effect the purchase or sale of any securities by:
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(2) | An agent who represents a qualifying broker-dealer that is exempt under this Subsection to effect transactions in securities or attempt to effect the purchase or sale of securities in Georgia, and who is properly registered with the broker-dealer pursuant to the laws of the broker-dealer's home jurisdiction, shall be exempt in the identical manner as the qualifying broker-dealer described in Subsection (1) of this Rule. |
Rule 590-4-5-.16 Dishonest or Unethical Business Practices
(1) | Every entity, organization, or individual regulated by the Act shall observe high standards of commercial honor and just and equitable principles of trade in the conduct of business. The Commissioner may, at his or her discretion, take such action authorized by the Act regarding any entity, organization, or individual regulated by the Act. |
(2) | The following are prohibited acts:
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(3) | Senior-specific Certifications and Designations. The improper use of a senior-specific certification or designation by any person in connection with the offer, sale, or purchase of securities, or the provision of advice as to the value of or the advisability of investing in, purchasing, or selling securities, either directly or indirectly, through publications or writings, or by issuing or promulgating analyses or reports relating to securities, that indicate or imply that the user has special certification or training in advising or servicing senior citizens or retirees in such a way as to mislead any person shall be a dishonest and unethical business practice. |
Rule 590-4-5-.17 Associated Persons of an Issuer Deemed not to be Broker-Dealers
(1) | An associated person of an issuer of securities shall not be deemed to be a broker-dealer solely by reason of his participation in the sale of the securities of such issuer if the associated person:
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(2) | No presumption shall arise that an associated person of an issuer has violated O.C.G.A. § 10-5-30 solely by reason of his participation in the sale of securities of the issuer if he does not meet the conditions specified in paragraph (1) of this section. |
(3) | Definitions. When used in this section:
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Which of the following records must be kept by a broker
Which of the following records must be kept by a broker-dealer firm for six years? New account forms filled out when the customer account was opened and stock records showing all the securities held by the firm and where they are held must be kept for six years.
Which of the following records must be kept by a broker
The confirmations and order tickets must be kept for three years.
Which of the following records must be maintained for 6 years?
For example, brokers must retain blotters (records containing details of all purchases and sales of securities) for at least six years. But they must keep copies of trade confirmations for only three years.
Which of the following is a record that must be retained on file by a broker
The following records must be maintained by a broker-dealer: partnership records, articles of incorporation, records of the board of directors, Form BD, and amendments to the form.