Effectiveness and PostEffective Requirements

PURPOSE: This rule specifies when the registration of broker-dealers and sales representatives becomes effective, reports required during effectiveness and procedures for terminating the effectiveness and effecting withdrawal of registrations. (1) If no suspension or denial orders are in effect or proceedings for these orders are pending, registration shall become effective no later than noon of the thirtieth day after the filing of an application is complete, but an earlier effective date may be specified by the commissioner (section 409.856, RSMo). Filing shall be considered complete when the application and all attachments and exhibits, as required by the commissioner, have been filed in the division and are satisfactory to the commissioner and the examination of the applicant has been accepted by the commissioner. Any application, the filing of which is not considered complete within a period of one (1) year following the original filing, shall be presumed subject to the entry of an order of cancellation pursuant to section 409.863(1), RSMo. (2) During the pendency of any application, or effectiveness of any registration, every broker-dealer or sales representative immediately and in no event later than thirty (30) days following the specified event or occurrence, shall report to the commissioner, in writing, any material change in any information, exhibits, or schedules submitted or circumstances disclosed in its last prior application and a correcting amendment shall be filed in the division at the time of occurrence or discovery of these changes, which include, but are not limited to, the following: (A) Change in firm name, ownership, management or control or change in any partners, officers or persons in similar positions, or business address, or the creation or termination of a branch office in Missouri; (B) Change in type of entity, general plan or character of business, method of operation or type of commodities in which dealing or trading is being effected; (C) Insolvency, dissolution, or liquidation or a material adverse change or impairment of working capital or noncompliance with the minimum capital or bond requirements specified previously; (D) Termination of business or discontinuance of activities as a broker-dealer or sales representative; and Sales Representatives (E) The filing of a criminal charge or civil or administrative action, in which a fraudulent, dishonest, or unethical act is alleged or a violation of a securities or commodities law is involved; or (F) Entry of an order or proceeding by any court or administrative agency denying, suspending, or revoking a registration or expelling the firm or individual from membership in any stock exchange, the Financial Industry Regulatory Authority (FINRA), or National Futures Association or threatening to do so, or enjoining it from engaging in or continuing any conduct or practice in the securities or commodities business. (3) Every registration of a broker-dealer or sales representative expires on the first December 31 following registration, unless renewed or unless sooner revoked, cancelled or withdrawn (section 409.856(2), RSMo). (4) Applications for renewal of registration filed directly with the commissioner shall be filed on the appropriate form marked renewal (see 15 CSR 30-59.040) with required information and exhibits no earlier than sixty (60) days and no later than thirty (30) days before the expiration date of the registration concerned. (5) An applicant for renewal registration may incorporate by reference in the application documents previously filed to the extent the documents are currently accurate. (6) Upon expiration of a registration, any subsequent application for registration shall be considered and treated as an application for initial registration. (7) When a sales representative’s association with the broker-dealer or issuer who appoints him/her as sales representative is discontinued or terminated by either party, the brokerdealer must file within ten (10) days of that discontinuance or termination, a notice of that fact, stating the date of and reasons for the discontinuance or termination (Form U-5 or by letter). If the termination is for cause, the broker-dealer shall furnish the commissioner a detailed statement of the reasons. Failure to file the notice of termination by the broker-dealer principal required by this rule within the specified ten (10)-day period will afford grounds for the suspension of the license of the broker-dealer to transact business in Missouri (sections 409.856(3) and (5), RSMo). (8) Every broker-dealer who desires to withdraw his/her registration shall file an application (Form BDW). The request of a brokerdealer shall include a statement of financial condition as of a date within ten (10) days of that statement in detail as will disclose the nature and amount of assets and liabilities, net worth, unsatisfied judgments and liens and a statement of where and in whose custody the books and records will be kept, and, in the case of the broker-dealer, a schedule of commodities in which it has an interest and the market value of the commodities. (9) In the event of a merger, consolidation, or reorganization of an existing registered broker-dealer— (A) The following documents must be filed: 1. The broker-dealer who will dissolve upon consummation of the merger or who will become a part of an existing broker-dealer upon reorganization or consolidation must file at least ten (10) days prior to a merger, consolidation, or reorganization— A. A termination of its broker-dealer registration on Form BDW; B. A termination of all sales representative registrations; and C. A complete explanation of the proposed merger, consolidation or reorganization accompanied by the agreement effecting the merger, consolidation, or reorganization; and 2. The broker-dealer who will be the surviving corporation upon consummation of the merger or who will be the named brokerdealer after the reorganization or consolidation must file the following documents at least ten (10) days prior to the merger, consolidation, or reorganization: A. A complete explanation of the proposed merger; B. Form U-4 applications plus supporting documents of all registered sales representatives of the dissolving broker-dealer to be transferred to the surviving, consolidated, or reorganized broker-dealer in accordance with 15 CSR 30-59.070 and section (7) of this rule; and C. If the name of the surviving, consolidated, or reorganized broker-dealer will change, an amended Form BD, as appropriate and all other properly amended documents required by 15 CSR 30-59.020 and this rule. AUTHORITY: sections 409.836 and 409.850– 409.856, RSMo 2016.* This rule was previously filed as 15 CSR 30-60.120. Emergency rule filed Oct. 2, 1985, effective Oct. 12, 1985, expired Feb. 9, 1986. Original rule filed Aug. 22, 1986, effective Jan. 30, 1987. Amended: Filed Feb. 13, 2003, effective Aug. 30, 2003. Amended: Filed July 19, 2019, effective Jan. 30, 2020. *Original authority: 409.836, RSMo 1985, 409.850– 409.856 see Missouri Revised Statutes.