Broker-dealer/Agent Registration Procedures

(1) Initial Broker-dealer Registration. (a) An application for registration as a broker-dealer in the Commonwealth shall be made by submitting the following items to the Central Registration Depository (CRD): 1. If the applicant is an existing member of FINRA, or has previously filed items with the CRD seeking registration in another state or membership in FINRA: a. Page 1 of Form BD marked “Amendment.” b. Page 2 of Form BD with “MA” checked in Item 2. c. Page 1 of Form U-4 for each executive officer, director, partner or person occupying a similar status performing similar functions who will be automatically registered with “MA” checked. Any such person who does not seek automatic registration shall submit a duly executed affidavit in a form approved by the Division. d. A check or money order in the amount of the filing fees for the above ($450 for the broker-dealer and $75 for each agent). 2. If the applicant is not yet a FINRA member, has not filed an application for FINRA membership, but is seeking membership in FINRA, it should comply with FINRA’s application instructions, and: (Mass. Register #1412 3/6/20) a. It must check “MA” on page two of Form BD. b. It must submit a complete U-4 for each executive officer, director, partner or person occupying a similar status performing similar functions who will be automatically registered with “MA” checked. Any such person who does not seek automatic registration shall submit a duly executed affidavit in a form approved by the Division c. It must submit funds sufficient to cover the filing fees of FINRA and all jurisdictions to which it is applying for registration, including Massachusetts’ fees ($450 for the broker-dealer and $75 for each agent). (b) Registration as a broker-dealer becomes effective on the earliest of the following dates: 1. If no deferral or denial order is in effect and no proceeding is pending under M.G.L. c. 110A, § 204, registration becomes effective at noon of the 30 day after an th application is filed. No application under 950 CMR 12.202(1)(a) will be deemed filed until and unless the applicant has been approved as a member of FINRA. 2. On the day the Division notifies the CRD that the registration is effective. 3. If a deferral order is in effect, the date specified in the order. A deferral order may be entered on the basis of an amendment to the broker-dealer application which is filed with the CRD. Amendments to the CRD records of persons listed on Schedules A, B, or C of the broker-dealer’s Form BD will be considered amendments to the broker-dealer application for purposes of issuing deferral orders. (c) If the applicant is not a member of FINRA and is not required by federal law to become a member, then it may apply by filing the following items with the Securities Division: 1. A copy of Form BD with original signatures. 2. Documentary evidence that the applicant is registered with the SEC. 3. A manually signed, complete Form U-4 for each person listed on Schedule A of Form BD. 4. Documentary evidence that each person who will be automatically registered as an agent has successfully passed either the Uniform State Law Exam (Series 63) or the Uniform Combined State Law Examination (Series 66). 5. A check for the filing fees, made payable to The Commonwealth of Massachusetts, in the amount of $450 for the broker-dealer and $75 for each agent. (2) Initial Agent Registration. (a) Non-FINRA Broker-dealers. 1. A non-FINRA broker-dealer may register agents, in addition to those automatically registered, after its registration has become effective by filing with the Division the following: a. A manually signed, complete Form U-4 for each agent. b. Documentary evidence of passage of either the Uniform State Law Exam (Series 63) or the Uniform Combined State Law Examination (Series 66). c. A non-refundable filing fee of $75 for each agent, such fee made payable to “The Commonwealth of Massachusetts.” 2. Registration of an agent becomes effective on the earliest of the following dates: a. If the agent has indicated no affirmative response to Disclosure Questions in Section 14 of Form U-4, then the application for registration becomes effective upon filing with the Division. b. If no deferral or denial order is in effect and no proceeding is pending under M.G.L. c. 110A, § 204, registration becomes effective at noon on the 30 day after th the application for registration is filed. c. On the date the Division notifies the applicant that the registration is effective. d. If a deferral order is in effect, the date specified in the order. (b) FINRA Broker-dealers. 1. After a FINRA broker-dealer’s application for registration has become effective, it may apply to register agents in addition to those automatically registered, by filing with the CRD: a. A manually signed, complete Form U-4 for each agent (if the agent has not previously filed a Form U-4 with this broker-dealer) with “MA” checked; or, b. Page one of Form U-4 for each agent with “MA” checked (if the agent has already filed a Form U-4 with the CRD through this broker-dealer); and, c. A non-refundable registration fee in the amount of $75 for each agent. 2. Each agent must have successfully passed the Uniform State Law Examination (Series 63) or the Uniform Combined State Law Examination (Series 66); and, every examination required for such applicant under 950 CMR 12.204(3). 3. Registration of an agent becomes effective on the earliest of the following dates: a. If the agent has met the following conditions, then the registration becomes effective when the Form U-4 or the amendment to Form U-4 indicating registration with Massachusetts is filed with the CRD and the agent is approved by FINRA: i. The proper fee is paid. ii. The agent has passed the required examinations. iii. The agent is not seeking a dual registration. iv. The agent has no affirmative answers to Disclosure Questions in Section 14 of Form U-4 or other disclosure reports on file with the CRD. b. If no deferral or denial order is in effect and no proceeding is pending under M.G.L. c. 110A, § 204, then the registration becomes effective at noon on the 30th day after the application for registration is filed with the CRD. c. On the date the Division notifies the CRD that the registration is effective. d. If a deferral order is in effect, the date specified in the order. A deferral order may be entered on the basis of an amendment to the agent’s application which is filed with the CRD. (3) Initial Issuer-agent Registration. (a) An issuer that seeks registration of an agent shall file with the Division the following: 1. A manually signed, complete Form U-4. 2. A registration fee in the amount of $75, made payable to “The Commonwealth of Massachusetts.” (b) Registration as an issuer-agent becomes effective on the earlier of the following dates: 1. If no deferral or denial order is in effect and no proceeding is pending under M.G.L. c. 110A, § 204, then the registration becomes effective at noon on the 30 day th after the application is filed. 2. The date that the Division notifies the applicant that the registration is effective. (4) Additional Information. Additional exhibits or information not specifically required by the forms or 950 CMR 12.200 but essential to a full presentation of all material facts relating to the qualifications of the applicant should be furnished and properly identified. The Division may make such examination of the applicant and request additional information it deems appropriate in the consideration of eligibility for registration. Additional information filed with the Division that is not part of the original application shall be filed by amendment. (5) Renewal Broker-dealer, Agent and Issuer-agent Registration. (a) An issuer or a non-FINRA broker-dealer may renew its registration or that of its agent by filing a Form RF and the appropriate registration fee ($450 for broker-dealer, $75 for agents and issuer-agents) no earlier than November 1 , nor later than December 1 , for st st renewal to be effective for next calendar year. The Director will provide Form RF on or about November 1 of each year. All renewal applications filed under 950 CMR 12.202(5) st received other than in the above manner will be treated as initial registrations, except that, applicants initially registered after December 1 , may immediately apply for renewal by filing st Form RF with the Division no later than the last business day of the calendar year. (b) A FINRA broker-dealer shall renew its registration and that of its agents through the CRD. It shall comply with applicable FINRA rules regarding dates and payments. Such renewal registration applications shall be deemed filed with the Division on the day on which notice of intention to renew is received by the Division from FINRA. The effective date of renewal registrations filed through the CRD system shall be January 1 unless otherwise st ordered by the Director. (6) Agent and Issuer-agent Transfers. (a) A non-FINRA broker-dealer agent or issuer-agent shall transfer his affiliation from one broker-dealer or issuer to another by filing a Form U-4, with the Division, together with a non-refundable transfer fee of $75. Such a filing will be considered a new application under M.G.L. c. 110A, § 202, and 950 CMR 12.202(2). (b) Agents of FINRA broker-dealers shall transfer to another FINRA broker-dealer by filing with the CRD a Form U-4 with “MA” checked, and paying the non-refundable transfer fee of $75. Such a filing will be considered a new application under M.G.L.c. 110A, § 202 and 950 CMR 12.202(2). (c) No agent or issuer-agent shall conduct the business of an agent after transfer until its transferred registration becomes effective under 950 CMR 12.200. (7) Abandoned Applications. The Director may order an application for registration as a broker-dealer, agent, investment adviser, investment adviser representative, or issuer-agent deemed abandoned when an applicant fails to adequately respond to any request for additional information required under M.G.L. c. 110A or 950 CMR 10.00 through 14.413. The Director shall provide written notice of warning 30 calendar days before such order is entered. The applicant may, with the consent of the Director, withdraw the application. (8) Successor Broker-dealer Registration. (a) A registered broker-dealer that seeks to register a successor pursuant to M.G.L. c. 110A, § 202 shall file with the Division the following: 1. A copy of Form BD. 2. Form U-2. 3. A list of registered agents associated or to be associated with the successor and a transfer registration fee of $75 per agent. (b) If the successor is a FINRA broker-dealer, the transfer of agents shall be accomplished through the CRD system. (c) In the event that a broker-dealer succeeds to and continues the business of another registered broker-dealer, the registration of the predecessor shall remain effective as the registration of the successor for 60 days after such succession or until the last day of the calendar year, whichever is sooner, provided the Form BD is filed by such successor within 30 days after such succession or before the last day of the calendar year, whichever is sooner. (d) A Form BD, filed by a broker-dealer partnership which is not registered when such form is filed and that succeeds to and continues the business of a predecessor partnership registered as a broker-dealer, shall be treated as an application for registration, even though designated as an amendment, if it is filed to reflect the changes in the partnership and to furnish required information concerning any new partners. (e) There shall be no fee for filing Form BD pursuant to 950 CMR 12.202(8). (9) Mass Transfers. A FINRA broker-dealer seeking to mass transfer its agents to another FINRA broker-dealer shall file with the Division a roster of all agents intending to transfer. Such roster shall include the name and CRD number of each agent as well as an indication as to whether the agent has any currently disclosable items under Disclosure Questions in Section 14 of Form U-4. A transfer fee of $75 for each agent shall accompany the roster. Filings pursuant to 950 CMR 12.202(9) shall be made at least 30 days prior to the effective date of transfer, or such shorter period as the Director may permit. The provisions set forth in 950 CMR 12.202(9) supplement and do not supersede any FINRA rules and policies concerning mass transfers of agents.