The Florida Senate

517.12  Registration of dealers, associated persons, investment advisers, and branch offices.--

(1)  No dealer, associated person, or issuer of securities shall sell or offer for sale any securities in or from offices in this state, or sell securities to persons in this state from offices outside this state, by mail or otherwise, unless the person has been registered with the department pursuant to the provisions of this section. The department shall not register any person as an associated person of a dealer unless the dealer with which the applicant seeks registration is lawfully registered with the department pursuant to this chapter.

(2)  The registration requirements of this section do not apply to the issuers of securities exempted by s. 517.051(1)-(8) and (10).

(3)  Except as otherwise provided in s. 517.061(11)(a)4., (13), (16), (17), or (19), the registration requirements of this section do not apply in a transaction exempted by s. 517.061(1)-(12), (14), and (15).

(4)  No investment adviser or associated person of an investment adviser or federal covered adviser shall engage in business from offices in this state, or render investment advice to persons of this state, by mail or otherwise, unless the federal covered adviser has made a notice filing with the department pursuant to s. 517.1201 or the investment adviser is registered pursuant to the provisions of this chapter and associated persons of the federal covered adviser or investment adviser have been registered with the department pursuant to this section. The department shall not register any person or an associated person of a federal covered adviser or an investment adviser unless the federal covered adviser or investment adviser with which the applicant seeks registration is in compliance with the notice filing requirements of s. 517.1201 or is lawfully registered with the department pursuant to this chapter. A dealer or associated person who is registered pursuant to this section may render investment advice upon notification to and approval from the department.

(5)  No dealer or investment adviser shall conduct business from a branch office within this state unless the branch office is registered with the department pursuant to the provisions of this section.

(6)  A dealer, associated person, investment adviser, or branch office, in order to obtain registration, must file with the department a written application, on a form which the department may by rule prescribe, verified under oath. The department may establish, by rule, procedures for depositing fees and filing documents by electronic means provided such procedures provide the department with the information and data required by this section. Each dealer or investment adviser must also file an irrevocable written consent to service of civil process similar to that provided for in s. 517.101 The application shall contain such information as the department may require concerning such matters as:

(a)  The name of the applicant and the address of its principal office and each office in this state.

(b)  The applicant's form and place of organization; and, if the applicant is a corporation, a copy of its articles of incorporation and amendments to the articles of incorporation or, if a partnership, a copy of the partnership agreement.

(c)  The applicant's proposed method of doing business and financial condition and history, including a certified financial statement showing all assets and all liabilities, including contingent liabilities of the applicant as of a date not more than 90 days prior to the filing of the application.

(d)  The names and addresses of all associated persons of the applicant to be employed in this state and the offices to which they will be assigned.

(7)  The application shall also contain such information as the department may require about the applicant; any partner, officer, or director of the applicant or any person having a similar status or performing similar functions; any person directly or indirectly controlling the applicant; or any employee of a dealer or of an investment adviser rendering investment advisory services. Each applicant shall file a complete set of fingerprints taken by an authorized law enforcement officer. Such fingerprints shall be submitted to the Department of Law Enforcement or the Federal Bureau of Investigation for state and federal processing. The department may waive, by rule, the requirement that applicants must file a set of fingerprints or the requirement that such fingerprints must be processed by the Department of Law Enforcement or the Federal Bureau of Investigation. The department may require information about any such applicant or person concerning such matters as:

(a)  His or her full name, and any other names by which he or she may have been known, and his or her age, photograph, qualifications, and educational and business history.

(b)  Any injunction or administrative order by a state or federal agency, national securities exchange, or national securities association involving a security or any aspect of the securities business and any injunction or administrative order by a state or federal agency regulating banking, insurance, finance, or small loan companies, real estate, mortgage brokers, or other related or similar industries, which injunctions or administrative orders relate to such person.

(c)  His or her conviction of, or plea of nolo contendere to, a criminal offense or his or her commission of any acts which would be grounds for refusal of an application under s. 517.161

(d)  The names and addresses of other persons of whom the department may inquire as to his or her character, reputation, and financial responsibility.

(8)  The department may require the applicant or one or more principals or general partners, or natural persons exercising similar functions, or any associated person applicant to successfully pass oral or written examinations. Because any principal, manager, supervisor, or person exercising similar functions shall be responsible for the acts of the associated persons affiliated with a dealer or investment adviser, the examination standards may be higher for a dealer, office manager, principal, or person exercising similar functions than for a nonsupervisory associated person. The department may waive the examination process when it determines that such examinations are not in the public interest. The department shall waive the examination requirements for any person who has passed any tests as prescribed in s. 15(b)(7) of the Securities Exchange Act of 1934 that relates to the position to be filled by the applicant.

(9)(a)  All dealers, except securities dealers who are designated by the Federal Reserve Bank of New York as primary government securities dealers or securities dealers registered as issuers of securities, shall comply with the net capital and ratio requirements imposed pursuant to the Securities Exchange Act of 1934. The department may by rule require a dealer to file with the department any financial or operational information that is required to be filed by the Securities Exchange Act of 1934 or any rules adopted under such act.

(b)  The department may by rule require the maintenance of a minimum net capital for securities dealers who are designated by the Federal Reserve Bank of New York as primary government securities dealers and securities dealers registered as issuers of securities and investment advisers, or prescribe a ratio between net capital and aggregate indebtedness, to assure adequate protection for the investing public. The provisions of this section shall not apply to any investment adviser that maintains its principal place of business in a state other than this state, provided such investment adviser is registered in the state where it maintains its principal place of business and is in compliance with such state's net capital requirements.

(10)  An applicant for registration shall pay an assessment fee of $200, in the case of a dealer or investment adviser, or $40, in the case of an associated person. The assessment fee of an associated person shall be reduced to $30, but only after the department determines, by final order, that sufficient funds have been allocated to the Securities Guaranty Fund pursuant to s. 517.1203 to satisfy all valid claims filed in accordance with s. 517.1203(2) and after all amounts payable under any service contract entered into by the department pursuant to s. 517.1204, and all notes, bonds, certificates of indebtedness, other obligations, or evidences of indebtedness secured by such notes, bonds, certificates of indebtedness, or other obligations, have been paid or provision has been made for the payment of such amounts, notes, bonds, certificates of indebtedness, other obligations, or evidences of indebtedness. An associated person not having current fingerprint cards filed with the National Association of Securities Dealers or a national securities exchange registered with the Securities and Exchange Commission shall be assessed an additional fee to cover the cost for said fingerprint cards to be processed by the department. Such fee shall be determined by rule of the department. Each dealer and each investment adviser shall pay an assessment fee of $100 for each office in this state, except its designated principal office. Such fees become the revenue of the state, except for those assessments provided for under s. 517.131(1) until such time as the Securities Guaranty Fund satisfies the statutory limits, and are not returnable in the event that registration is withdrawn or not granted.

(11)  If the department finds that the applicant is of good repute and character and has complied with the provisions of this chapter and the rules made pursuant hereto, it shall register the applicant. The registration of each dealer, investment adviser, and associated person will expire on December 31, and the registration of each branch office will expire on March 31, of the year in which it became effective unless the registrant has renewed its registration on or before that date. Registration may be renewed by furnishing such information as the department may require, together with payment of the fee required in subsection (10) for dealers, investment advisers, associated persons, or branch offices and the payment of any amount lawfully due and owing to the department pursuant to any order of the department or pursuant to any agreement with the department. Any dealer, investment adviser, or associated person registrant who has not renewed a registration by the time the current registration expires may request reinstatement of such registration by filing with the department, on or before January 31 of the year following the year of expiration, such information as may be required by the department, together with payment of the fee required in subsection (10) for dealers, investment advisers, or associated persons and a late fee equal to the amount of such fee. Any reinstatement of registration granted by the department during the month of January shall be deemed effective retroactive to January 1 of that year.

(12)(a)  The department may issue a license to a dealer, investment adviser, associated person, or branch office to evidence registration under this chapter. The department may require the return to the department of any license it may issue prior to issuing a new license.

(b)  Every dealer, investment adviser, or federal covered adviser shall promptly file with the department, as prescribed by rules adopted by the department, notice as to the termination of employment of any associated person registered for such dealer or investment adviser in this state and shall also furnish the reason or reasons for such termination.

(c)  Each dealer or investment adviser shall designate in writing to, and register with, the department a manager for each office the dealer or investment adviser has in this state.

(13)  Changes in registration occasioned by changes in personnel of a partnership or in the principals, copartners, officers, or directors of any dealer or investment adviser or by changes of any material fact or method of doing business shall be reported by written amendment in such form and at such time as the department may specify. In any case in which a person or a group of persons, directly or indirectly or acting by or through one or more persons, proposes to purchase or acquire a controlling interest in a registered dealer or investment adviser, such person or group shall submit an initial application for registration as a dealer or investment adviser prior to such purchase or acquisition. The department shall adopt rules providing for waiver of the application required by this subsection where control of a registered dealer or investment adviser is to be acquired by another dealer or investment adviser registered under this chapter or where the application is otherwise unnecessary in the public interest.

(14)  Every dealer, investment adviser, or branch office registered or required to be registered with the department shall keep records of all currency transactions in excess of $10,000 and shall file reports, as prescribed under the financial recordkeeping regulations in 31 C.F.R. part 103, with the department when transactions occur in or from this state. All reports required by this subsection to be filed with the department shall be confidential and exempt from s. 119.07(1) except that any law enforcement agency or the Department of Revenue shall have access to, and shall be authorized to inspect and copy, such reports.

(15)  In lieu of filing with the department the applications specified in subsection (6), the fees required by subsection (10), and the termination notices required by subsection (12), the department may by rule establish procedures for the deposit of such fees and documents with the Central Registration Depository of the National Association of Securities Dealers, Inc., as developed under contract with the North American Securities Administrators Association, Inc.; provided, however, that such procedures shall provide the department with the information and data as required by this section.

(16)  Except for securities dealers who are designated by the Federal Reserve Bank of New York as primary government securities dealers or securities dealers registered as issuers of securities, every applicant for initial or renewal registration as a securities dealer and every person registered as a securities dealer shall be registered as a broker or dealer with the Securities and Exchange Commission and shall be subject to insurance coverage by the Securities Investor Protection Corporation.

(17)(a)  A dealer that is located in Canada and has no office or other physical presence in this state may, provided the dealer is registered in accordance with this section, effect transactions in securities with or for, or induce or attempt to induce the purchase or sale of any security by:

1.  A person from Canada who temporarily resides in this state and with whom the Canadian dealer had a bona fide dealer-client relationship before the person entered the United States; or

2.  A person from Canada who is a resident of this state, and whose transactions are in a self-directed tax advantage retirement plan in Canada of which the person is the holder or contributor.

(b)  An associated person who represents a Canadian dealer registered under this section may, provided the agent is registered in accordance with this section, effect transactions in securities in this state as permitted for a dealer, under subsection (a).

(c)  A Canadian dealer may register under this section provided that such dealer:

1.  Files an application in the form required by the jurisdiction in which the dealer has a head office.

2.  Files a consent to service of process.

3.  Is registered as a dealer in good standing in the jurisdiction from which it is effecting transactions into this state and files evidence of such registration with the department.

4.  Is a member of a self-regulatory organization or stock exchange in Canada.

(d)  An associated person who represents a Canadian dealer registered under this section in effecting transactions in securities in this state may register under this section provided that such person:

1.  Files an application in the form required by the jurisdiction in which the dealer has its head office.

2.  Is registered in good standing in the jurisdiction from which he or she is effecting transactions into this state and files evidence of such registration with the department.

(e)  If the department finds that the applicant is of good repute and character and has complied with the provisions of this chapter, the department shall register the applicant.

(f)  A Canadian dealer registered under this section shall:

1.  Maintain its provincial or territorial registration and its membership in a self-regulatory organization or stock exchange in good standing.

2.  Provide the department upon request with its books and records relating to its business in this state as a dealer.

3.  Provide the department notice of each civil, criminal, or administrative action initiated against the dealer.

4.  Disclose to its clients in this state that the dealer and its agents are not subject to the full regulatory requirements under this chapter.

5.  Correct any inaccurate information within 30 days, if the information contained in the application form becomes inaccurate for any reason before or after the dealer becomes registered.

(g)  An associated person of a Canadian dealer registered under this section shall:

1.  Maintain provincial or territorial registration in good standing.

2.  Provide the department with notice of each civil, criminal, or administrative action initiated against such person.

3.  Through the dealer, correct any inaccurate information within 30 days, if the information contained in the application form becomes inaccurate for any reason before or after the associated person becomes registered.

(h)  Renewal applications for Canadian dealers and associated persons under this section must be filed before December 31 each year. Every applicant for registration or renewal registration under this section shall pay the fee for dealers and associated persons under this chapter.

(18)  Every dealer or associated person registered or required to be registered with the department shall satisfy any continuing education requirements established by rule pursuant to law.

(19)  The registration requirements of this section which apply to investment advisers and associated persons do not apply to a commodity trading adviser who:

(a)  Is registered as such with the Commodity Futures Trading Commission pursuant to the Commodity Exchange Act.

(b)  Advises or exercises trading discretion, with respect to foreign currency options listed and traded exclusively on the Philadelphia Stock Exchange, on behalf of an "appropriate person" as defined by the Commodity Exchange Act.

The exemption provided in this subsection does not apply to a commodity trading adviser who engages in other activities that require registration under this chapter.

(20)  The registration requirements of this section do not apply to individuals licensed under ¹s. 626.041 or its successor statute, or ¹s. 626.051 or its successor statute, for the sale of a security as defined in s. 517.021(19)(g), if the individual is directly authorized by the issuer to offer or sell the security on behalf of the issuer and the issuer is a federally chartered savings bank subject to regulation by the Federal Deposit Insurance Corporation. Actions under this subsection shall constitute activity under the insurance agent's license for purposes of ss. 626.611 and 626.621

History.--s. 11, ch. 14899, 1931; s. 6, ch. 17253, 1935; CGL 1936 Supp. 6002(12); s. 3, ch. 20960, 1941; s. 3, ch. 21709, 1943; s. 1, ch. 57-288; s. 1, ch. 59-169; s. 1, ch. 63-321; s. 6, ch. 65-454; ss. 12, 35, ch. 69-106; s. 6, ch. 71-96; s. 2, ch. 72-152; s. 3, ch. 73-68; s. 1, ch. 74-278; s. 3, ch. 76-168; s. 194, ch. 77-104; s. 1, ch. 77-457; s. 4, ch. 78-435; s. 19, ch. 79-8; s. 149, ch. 79-164; ss. 7, 15, ch. 79-381; ss. 3-5, ch. 80-254; ss. 2, 3, ch. 80-403; ss. 4, 6, ch. 81-115; ss. 2, 3, ch. 81-318; s. 3, ch. 83-184; s. 3, ch. 83-265; s. 4, ch. 84-159; s. 9, ch. 85-165; s. 8, ch. 86-85; s. 2, ch. 88-187; ss. 6, 14, 15, ch. 90-362; s. 4, ch. 91-429; s. 3, ch. 92-9; s. 4, ch. 92-45; s. 5, ch. 96-338; s. 336, ch. 96-406; s. 1167, ch. 97-103; s. 8, ch. 97-224; s. 1, ch. 98-82; s. 6, ch. 98-221; s. 51, ch. 2000-154; s. 12, ch. 2002-404.

¹Note.--Repealed by s. 72, ch. 2002-206.