The Office proposes to amend these rules as part of a rule re-organization effort for registration types under Chapter 517, Florida Statutes, in order to improve organization and clarity. 69W-600.001 is proposed for amendment to only contain ...

Notice of Proposed Rule

 

DEPARTMENT OF FINANCIAL SERVICES

Securities

RULE NOS.:RULE TITLES:

69W-600.001Application for Registration as a Dealer, Issuer/Dealer, or Investment Adviser

69W-600.0015Canadian Dealer Notification

69W-600.002Application for Registration as Associated Person

PURPOSE AND EFFECT: The Office proposes to amend these rules as part of a rule re-organization effort for registration types under Chapter 517, Florida Statutes, in order to improve organization and clarity. Rule 69W-600.001, F.A.C. is proposed for amendment to only contain provisions relating to applications for registration for FINRA dealers. Rule 69W-600.0015, F.A.C. is proposed for amendment to include all applicable provisions relating to notice-filing for Canadian dealers. Rule 69W-600.002, F.A.C. is proposed for amendment to contain all provisions relating to applications for registration as an associated person of a FINRA dealer.

SUMMARY: These rules are proposed for amendment to consolidate existing provisions related to securities industry registration into separate rules by registration type.

SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS AND LEGISLATIVE RATIFICATION: The Agency has determined that this will not have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has not been prepared by the Agency.

The Agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs or if no SERC is required, the information expressly relied upon and described herein: The Agency expressly relies on an analysis of potential economic impact conducted by persons with subject matter knowledge of this rule.

Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.

RULEMAKING AUTHORITY: 517.03(1), 517.12 FS.

LAW IMPLEMENTED: 517.12 FS.

IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE SCHEDULED AND ANNOUNCED IN THE FAR.

THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: John Kim, Division of Securities, [e-mail], [phone]

 

THE FULL TEXT OF THE PROPOSED RULE IS:

 

Substantial rewording of Rule 69W-600.001 follows. See Florida Administrative Code for present text.

69W-600.001 Application for Registration as a Dealer (FINRA) Dealer, Issuer/Dealer, or Investment Adviser.

(1) New Applications.

(a) Applicants for initial registration of dealers who are members of the Financial Industry Regulatory Authority (FINRA) shall file the Uniform Application for Broker-Dealer Registration (Form BD) electronically through the Central Registration Depository of FINRA (CRD) as prescribed by the Financial Services Commission (Commission). The application shall include all information required by such form, any other information the Commission or Office may require, and payment of the statutory fees required by Sections 517.12(10) and 517.131, F.S. The application shall be deemed received by the Office on the “payment date” reflected on the CRD “disbursement detail” report.  Every application or amendment filed pursuant to this rule shall constitute a “written application” within the meaning of Section 517.12(6), F.S.

(b) An application shall include the following:

1. Form BD (1-08). A sample form is hereby incorporated by reference and available at http://www.flrules.org/   /or http://www.flofr.com/;

2. Statutory fee in the amount required by Section 517.12(10), F.S.;

3. A Uniform Application for Securities Industry Registration or Transfer (Form U-4) (05/2009), to register at least one principal as set forth in this rule. A sample form is hereby incorporated by reference and available at http://www.flrules.org/   /or http://www.flofr.com/    /. In conjunction with filing its Form BD with the Office, the dealer shall provide the Office written notification of the principal’s name and CRD number or social security number;

4. Financial statements and reports required under Rules 69W-600.0151(4)(a) and 69W-600.017, F.A.C.;

5. Proof of effective registration with the Securities and Exchange Commission (SEC). Where required by Section 517.12(16), F.S., applicants shall also provide the Office with proof of insurance coverage by the Securities Investor Protection Corporation. Evidence of current membership as a dealer with the FINRA shall satisfy this requirement;

6. Any direct or indirect owner or control person required to be reported on Form BD, pursuant to Section 517.12(7), F.S., who is not currently registered with the firm they are seeking to join or act as a direct or indirect owner or control person shall comply with the fingerprinting requirements in accordance with paragraph (7) of this rule; and

7. A copy of the articles of incorporation and amendments thereto, if a partnership, a copy of the partnership agreement, or if a limited liability company, a copy of the articles of organization.

(2) Request for Additional Information. All information required by paragraph (1) of this rule shall be submitted with the original application filing. Any request for additional documents or information shall be made by the Office within thirty (30) days after receipt of the application. The Office may require documentation to be certified by its issuer based upon the Office’s review of the nature and substance of the disciplinary history of the applicant and any officer, director, or ultimate owner in the case of a corporation or association, and any partner, co-partner, or member of the partnership in the case of a partnership. For purposes of this rule, “certified” means that there must be an original certification or attestation by the issuer of the record that the document is a true copy of a record contained in its office and its seal, if any. Additional information shall be submitted directly with the Office within sixty (60) days after a request has been made by the Office. Failure to respond to such request within sixty (60) days after the date of the request may be construed by the Office as grounds for denial of an application in accordance with the provisions of Section 120.60(1), F.S.

(3) Amendment of Application. If the information contained in any application for registration as a dealer or in any amendment thereto, becomes inaccurate for any reason, the dealer shall file an amendment on the Form BD correcting such information within 30 days. For applicants and registrants that are members of the FINRA, each such amendment, including those required by paragraph (11) of this rule, shall be filed with the Office through the CRD system. Requests to make changes which are material to the application or to the Office’s evaluation of the application filed at any time after the application has been received may be deemed by the Office to be grounds for denial, and a new application, accompanied by the appropriate filing fee, may be required.

(4) Obligations Related to Acts of Associated Persons. A dealer shall be responsible for the acts, practices, and conduct of their registered associated persons in connection with the purchase and sale of securities or in connection with the rendering of investment advice until such time as they have been properly terminated as provided in this rule; and such dealer may be subject to assessment under Section 517.12(11), F.S., for such associated persons as have been terminated but for whom the appropriate termination notices have not been filed at date of license renewal.

(5) Requirement to Maintain Principal.

(a) Every applicant for registration and registrant under Section 517.12, F.S., as a dealer (as those terms are defined under Section 517.021, F.S.), shall have and maintain at least one associated person qualified and registered as principal pursuant to Section 517.12, F.S., and the rules thereunder.

(b) In the event a registered dealer fails to maintain at least one person registered as principal for more than thirty (30) days, the registration of such dealer shall be suspended until such time as a qualified principal is so registered.

(c) Any applicant or registrant dealer may elect to register more than one person as principal; there is no limitation as to the number of associated persons that may be registered as principal as long as such persons meet the qualification standards as prescribed in paragraph (6) of this rule, and the appropriate fees as specified in Section 517.12(10), F.S., have been paid.

(6) Examinations/Qualfications Requirements.

(a) Every applicant for registration shall execute and submit a statement attesting to said applicant’s knowledge and review of the Florida Securities and Investor Protection Act, as contained in the Form U-4.

(b) Every applicant for initial registration as a principal or agent of a dealer shall evidence securities general knowledge by:

1. Submitting to the Office proof of passing, within two years of the date of application for registration, an appropriate examination relating to the position to be filled administered by a national securities association or a national securities exchange registered with the SEC; or

2. Submitting to the Office evidence of effective registration, within the preceding two years, with a national securities association or national stock exchange registered with the SEC, relating to the position to be filled as principal or agent.

3. Having remained continuously registered in the capacity to be filled with the State of Florida without interruption of more than two years.

(7) Fingerprint Requirements.

(a) Fingerprints filed in accordance with Section 517.12(7), F.S., shall be submitted to the Office through a live scan vendor approved by the Florida Department of Law Enforcement (FDLE) and published on FDLE’s website for submission to FDLE and the Federal Bureau of Investigation (FBI) for a state criminal background check and a federal criminal background check. The cost of fingerprint processing shall be borne by the applicant and paid directly to the live scan vendor.

(b) Notwithstanding any exemptions found in SEC Rule 17f-2 (17 C.F.R. § 240.17f-2), which is incorporated by reference in Rule 69W-200.002, F.A.C., any direct owner, principal, or indirect owner that is required to be reported on Form BD, pursuant to Section 517.12(7), F.S., who is not currently registered with the firm they are seeking to join or act as a direct owner, principal, or indirect owner shall submit fingerprints to the Office through a live scan vendor approved by FDLE and published on FDLE’s website for submission to FDLE and the FBI for a state criminal background check and a federal criminal background check. The cost of fingerprint processing shall be borne by the applicant and paid directly to the live scan vendor.

(c) The requirement to submit fingerprints is waived for any direct owner, principal, or indirect owner that is required to be reported on Form BD, pursuant to Section 517.12(7), F.S., if fingerprints have been submitted and processed by FINRA on behalf of the member firm with which the owner or principal is affiliated, pursuant to the provisions of SEC Rule 17f-2 (17 C.F.R. § 240.17f-2).

(8) Renewal Requirement.

(a) Every dealer registered with the Office shall annually verify all registrations of associated persons and branch office notice-filings prior to December 31.

(b) In addition to verifying registration or notice-filings as provided in paragraph (8)(a), to renew its registration and the registrations of its associated persons and branch office notice-filings, each dealer shall pay all renewal fees as required by Sections 517.12(11) and 517.1202(3), F.S.

(c) Renewal fees for FINRA member firms, associated persons of FINRA member firms, and branch offices of FINRA member firms, shall be submitted through the CRD by December 31 of the year the registration or notice-filing expires.

(d) For FINRA members, failure to submit the requisite amount of fees as provided for in paragraph (8)(b) by December 31 of the year of expiration of the registration shall result in the firm registration, agent registration or branch office notice-filing not being renewed. If December 31 falls on a Saturday, Sunday or legal holiday pursuant to Section 110.117, F.S., the renewals received on the next business day shall be considered timely received. However, an expired registration or notice-filing may be reinstated in accordance with the provisions of Section 517.12(11) or 517.1202(3), F.S., provided that all requisite information and fees are date stamped by the cashier’s office of the Department of Financial Services on or before January 31 of the year following the year of expiration. Failure to submit the requisite amount of fees necessary to reinstate registration or notice-filing by January 31 of the year following the year of expiration shall result in such registration or notice-filing not being reinstated. If January 31 falls on a Saturday, Sunday, or legal holiday pursuant to Section 110.117, F.S., the reinstatement received on the next business day shall be considered timely received. In the event that the renewal or reinstatement is withdrawn or not granted, any fees filed to renew or reinstate registration or notice-filing shall become the revenue of the state pursuant to the provisions of Section 517.12(10) or 517.1202(8), F.S., and shall not be returnable.

(9) Termination of Registration as Dealer, Principal or Agent, or Notificaton of Branch Office.

(a) Where a registrant withdraws, cancels, or otherwise terminates registration, or is terminated for any reason, notice of such fact shall be electronically filed with the Office through the CRD on the forms incorporated in paragraph (9)(c) of this rule within thirty (30) calendar days of the date of termination.

(b) The Office may deny any request to terminate or withdraw any application or registration as provided under Section 517.161(5), F.S.

(c) The forms to be utilized for providing notice to the Office under  paragraph (9)(a) are:

1. Uniform Request for Broker Dealer Withdrawal (Form BDW) (04-07).  A sample form is hereby incorporated by reference and is available at http://www.flrules.org/   / or http://www.flofr.com/   /.

2. Uniform Branch Office Registration Form (Form BR) (10-05). A sample form is hereby incorporated by reference and is available at http://www.flrules.org/   / or http://www.flofr.com/    /.

3. Uniform Termination Notice for Securities Industry Registration (Form U-5) (05-09).  A sample form is hereby incorporated by reference and is available at http://www.flrules.org/   / or http://www.flofr.com/    /.

(10) Notice of Civil, Criminal or Administrative Action. A dealer shall:

(a) Notify the Office within thirty (30) calendar days of the date a complaint is served, of any civil, criminal or administrative charges filed against the firm or owner which directly or indirectly relate to the registration or sale of securities, or which directly or indirectly relate to the activities as a dealer, investment adviser, principal or agent, or any other activity where a breach of a fiduciary trust is alleged. This shall not include minor traffic violations; but shall include any notification of investigation by any recognized regulatory agency;

(b) Notify the Office within thirty (30) calendar days of the date filed, any answer or reply to any complaint filed as outlined in paragraph (10)(a);

(c) Notify the Office within thirty (30) calendar days of the date of decision, order, or sanction rendered, or any appeal filed with respect to such decision with regard to any complaint outlined in paragraph (10)(a); and

(d) File with the Office one (1) copy of such complaint, answer or reply, decision, order, or sanction at the time of notification in accordance with paragraphs (10)(a), (10)(b), and (10)(c).  A broker dealer who is a member of the FINRA shall file such notifications with the Office through the CRD of the FINRA in accordance with this rule. However, responses to requests by the Office for additional information shall be filed directly with the Office.

(11) Changes in Name and Successor Registration Requirements.

(a) Where only a change in the name of an applicant or registrant as dealer occurs, notices of such fact shall be filed as an amendment on the forms prescribed by the Office within thirty (30) calendar days of the date of such change. For registrants who are members of the FINRA, such amendment shall be filed with the Office through the CRD pursuant to paragraph (1) of this rule. Any amendments to organizational documents or accompanying letters of explanation shall be promptly submitted directly to the Office when specifically requested by the Office.

(b) Where there is a change in legal entity of a proprietary, partnership, or corporate registrant, the successor entity shall file with the Office an amendment to the Form BD within thirty (30) calendar days of the date of such change. For registrants who are members of FINRA, such amendment shall be filed with the Office through the CRD pursuant to paragraph (1) of this rule. Any amendments to organizational documents, accompanying letters of explanation, or current financial statements of the successor shall be promptly submitted directly to the Office when specifically requested by the Office.

(c) Merger Situations: Where there is a merger of dealer registrants involving the assumption by the successor of substantially all assets and liabilities of the merged entities and the continuation of the activities of the merged entities’ successor entity, the merging entities shall file notification with the Office denoting such changes as are applicable within thirty (30) calendar days prior to the date of such change. The successor entity shall file an amendment to Form BD denoting such changes as are applicable within thirty (30) calendar days of date of such change. For registrants who are members of FINRA, each amendment shall be filed with the Office through the CRD pursuant to paragraph (1) of this rule. A copy of the plan of merger/merger agreement, amended organizational documents, accompanying letters of explanation, or current financial statements of the successor (merged) entity shall be promptly submitted directly to the Office when specifically requested by the Office pursuant to section 517.201, F.S.

(d) Change of Control:

1. Where a person or a group of persons directly or indirectly or acting by or through one or more persons, proposes to acquire a controlling interest in a dealer or investment adviser registrant, and where the acquirer is currently registered with the Office, or where the acquirer has not within the preceding 10 years committed any reportable act as defined in Rule 69W-200.001, F.A.C., the resulting entity shall file with the Office an amendment to Form BD denoting such changes as are applicable thirty (30) calendar days prior to the date of such acquisition. Any amended organizational documents, accompanying letters of explanation, or financial statements of the resulting entity shall be promptly submitted directly to the Office when specifically requested by the Office pursuant to section 517.201, F.S.

2. Where a person or a group of persons directly or indirectly or acting by or through one or more persons, proposes to acquire a controlling interest in a dealer or investment adviser registrant, and where the acquirer has within the preceding 10 years committed any reportable act as defined in Rule 69W-200.001, F.A.C., and is not currently registered with the Office, the resulting entity shall, prior to such acquisition, file with the Office a new application for registration on the forms prescribed by the Office, together with all required exhibits and fees. Additionally, there shall be filed with the Office, at the time the new application is filed, a notice of withdrawal, termination or cancellation of registration of the acquired entity on the forms prescribed by the Office, effective upon disposition of the new application by the Office. The Office may waive the requirements of this subsection where the Office determines it is not necessary, based upon the nature and substance of the proposed acquirer’s disciplinary history and experience, to require the filing of a new application for registration. Any person who receives a waiver of this subsection shall effect such change of control in compliance with the provisions of paragraph (11)(d)(1).

3. For purposes of this subsection “controlling interest” means possession of the power to direct or cause the direction of the management or policies of a company, whether through ownership of securities, by contract or otherwise. Any individual or firm that directly or indirectly has the right to vote 25 percent or more of the voting securities of a company or is entitled to 25 percent or more of its profits is presumed to control that company.

(e) For the purposes of paragraphs (11)(b) and (11)(c) of this rule, in the event that a person(s) succeeds to and continues the business of a Florida registered dealer, the registration of the predecessor shall be deemed to remain effective as the registration of the successor for a period of thirty (30) calendar days after such succession, provided that an amendment to Form BD together with the accompanying documents when requested by the Office pursuant to section 517.201, F.S., is filed by the successor within thirty (30) calendar days after such succession.

(f) For the purposes of paragraphs (11)(a), (11)(b), (11)(c), and (11)(d) of this rule, the effective registration of all associated persons and branch office notice-filings affiliated with the affected dealer registrant shall be transferred to the successor entity by the Office without necessitating the filing of new applications on behalf of such associated persons and notice-filings of such branch offices, unless notice of termination is filed for such persons and branch offices by the successor pursuant to paragraph (9) of this rule.

Rulemaking Authority 517.03(1), 517.12 517.12(6) FS. Law Implemented 517.12 517.12(6), (7), 517.1205 FS. History–New 12-5-79, Amended 9-20-82, Formerly 3E-600.01, Amended 7-29-90, 8-1-91, 6-16-92, 1-11-93, 11-14-93, 4-30-96, 6-22-98, 5-10-00, 9-19-00, 7-31-02, Formerly 3E-600.001, Amended 3-16-06, 5-15-07, 11-22-10, 10-29-12, 11-11-13,        .

 

Substantial rewording of Rule 69W-600.0015 follows. See Florida Administrative Code for present text.

69W-600.0015 Canadian Dealer Notice-Filing Notification.

(1) New Notice-Filings.

(a) The notice-filing for a Canadian dealer shall be filed electronically on the Office of Financial Regulation’s website at https://real.flofr.com through the Regulatory Enforcement and Licensing System (REAL) System using the OFR Form CAN, Canadian Dealer Notification (OFR Form CAN). The notice-filing shall include all information required by such form, any other information the Office of Financial Regulation (Office) may require, and payment of the statutory fees required by Section 517.12(17)(b), F.S. The notice-filing shall be deemed received on the date the Office issues a confirmation of submission and payment to the notice-filer via the Office’s website.

(b) A notice-filing shall include the following:

1. OFR Form CAN (effective 9/15), which is hereby incorporated by reference and available at http://www.flrules.org/   / or http://www.flofr.com/    /;

2. Statutory fee in the amount required by Section 517.12(17)(b), F.S.;

3. Evidence of a current registration as a dealer in the jurisdiction in which the dealer's main office is located;

4. Evidence of current membership in a self-regulatory organization or stock exchange in Canada.

(2) Request for Additional Information. All information required by paragraph (1) of this rule shall be submitted with the original notice-filing. Any request for additional documents or information shall be made by the Office within thirty (30) days after receipt of the notice-filing. The Office may require documentation to be certified by its issuer based upon the Office’s review of the nature and substance of the disciplinary history of the notice-filer. For purposes of this rule, “certified” means that there must be an original certification or attestation by the issuer of the record that the document is a true copy of a record contained in its office and its seal, if any. Additional information shall be submitted directly with the Office within sixty (60) days after a request has been made by the Office. Failure to respond to such request within sixty (60) days after the date of the request may be construed by the Office as grounds for denial of a notice-filing in accordance with the provisions of Section 120.60(1), F.S.

(3) Amendment of Notice-Filing. If the information contained in the OFR Form CAN becomes inaccurate for any reason, the notice-filer shall file an amendment on the OFR Form CAN correcting such information within 30 days. Canadian broker dealers shall file such amendments directly with the Office electronically through the REAL System.

(4) Renewal Requirement.

(a) Every Canadian dealer notice-filed with the Office shall file renewal fees electronically on the Office’s website at https://real.flofr.com through the REAL System and shall be deemed received on the date the Office issues a confirmation of submission and payment to the notice-filer via the Office’s website. All renewal fees must be received by the Office by December 31 of the year the notice-filing expires.

(b) For Canadian dealers, failure to submit the requisite amount of fees by December 31 of the year of expiration of the notice-filing shall result in such notice-filing not being renewed. If December 31 falls on a Saturday, Sunday or legal holiday pursuant to Section 110.117, F.S., the renewals received on the next business day shall be considered timely received. However, an expired notice-filing may be reinstated in accordance with Section 517.12(17), F.S., provided that all requisite information and fees are filed electronically on the Office’s website at https://real.flofr.com through the REAL System on or before January 31 of the year following the year of expiration. Failure to submit the requisite amount of fees necessary to reinstate the notice-filing by January 31 of the year following the year of expiration shall result in such notice-filing not being reinstated. If January 31 falls on a Saturday, Sunday, or legal holiday pursuant to Section 110.117, F.S., the reinstatement received on the next business day shall be considered timely received. If the renewal or reinstatement is withdrawn or not granted, any fees filed to renew or reinstate the notice-filing shall become the revenue of the state pursuant to the provisions of Section 517.12(17), F.S., and shall not be returnable.

(5) Termination of Notification. Where a registrant withdraws, cancels, or otherwise terminates notification, or is terminated for any reason, notice of such fact shall be electronically filed with the Office  through the REAL System using the OFR Form CAN within thirty (30) calendar days of the date of withdrawal, cancellation, or termination.

(6) Notice of Civil, Criminal or Administrative Action.  A Canadian dealer shall:

(a) Notify the Office within thirty (30) calendar days of the date a complaint is served, of any civil, criminal or administrative charges filed against the firm or owner which directly or indirectly relate to the registration or sale of securities, or which directly or indirectly relate to the activities as a dealer, investment adviser, principal or agent, or any other activity where a breach of a fiduciary trust is alleged. This shall not include minor traffic violations; but shall include any notification of investigation by any recognized regulatory agency;

(b) Notify the Office within thirty (30) calendar days of the date filed, any answer or reply to any complaint filed as outlined in paragraph (5)(a);

(c) Notify the Office within thirty (30) calendar days of the date of decision, order, or sanction rendered, or any appeal filed with respect to such decision with regard to any complaint outlined in paragraph (5)(a);

(d) File with the Office one (1) copy of such complaint, answer or reply, decision, order, or sanction at the time of notification in accordance with paragraphs (5)(a), (5)(b), and (5)(c). A Canadian dealer shall file such notifications with the Office through the REAL System.

Rulemaking Authority 517.03, 517.12 FS. Law Implemented 517.12 FS. History–New 5-15-07, Amended 11-22-10,      .

 

Substantial rewording of Rule 69W-600.002 follows. See Florida Administrative Code for present text.

69W-600.002 Application for Registration as Associated Person (FINRA Dealer).

(1) New Applications.

(a) Applicants for initial registration as a principal or associated person of dealers who are members of the Financial Industry Regulatory Authority (FINRA) shall file the Uniform Application for Securities Industry Registration or Transfer (Form U-4) electronically through the Central Registration Depository (CRD) of FINRA as prescribed by the Financial Services Commission (Commission).  The application  shall include all information required by such form, any other information the Office of Financial Regulation (Office) may require, and payment of the statutory fees required by Section 517.12(10), F.S. The application shall be deemed received by the Office on the date designated in the “Status Date” field on the line notated “FL” with a “Registration Status” of “pending” as indicated on the CRD “Registrations with Current Employers” screen. Every application or amendment filed pursuant to this rule shall constitute a “written application” within the meaning of Section 517.12(6), F.S.

(b) An application shall include the following:

1. Form U-4 (05/2009). A sample form is hereby incorporated by reference and available at http://www.flrules.org/   / or http://www.flofr.com/     /.

2. Statutory fee, for each application, in the amount as required by Section 517.12(10), F.S.

3. Evidence of examinations/qualifications set forth in paragraph (6) of this rule.

4. Fingerprints shall be submitted in accordance with Section 517.12(7), F.S., and paragraph (7) of this rule.

(2) Request for Additional Information. All information required by paragraph (1) of this rule shall be submitted with the original application filing. Any request for additional documents or information shall be made by the Office within thirty (30) days after receipt of the application. The Office may require documentation to be certified by its issuer based upon the Office’s review of the nature and substance of the disciplinary history of the applicant. For purposes of this rule, “certified” means that there must be an original certification or attestation by the issuer of the record that the document is a true copy of a record contained in its office and its seal, if any. Additional information shall be submitted directly with the Office within sixty (60) days after a request has been made by the Office. Failure to respond to such request within sixty (60) days after the date of the request may be construed by the Office as grounds for denial of an application in accordance with the provisions of Section 120.60(1), F.S.

(3) Amendment of Application. If the information contained in any Form U-4 becomes inaccurate for any reason before or after the associated person becomes registered, the associated person through the dealer, shall be responsible for correcting the inaccurate information within thirty (30) days. If the information being updated relates to the applicant’s or registrant’s disciplinary history, in addition to updating the Form U-4, the associated person through the dealer shall also provide the Office with notice and copies of each civil, criminal or administrative action initiated against the associated person as provided in paragraph (10) of this rule. Associated persons of FINRA member firms shall file such amendments through the CRD system.

(4) Multiple Registration. An applicant for registration as an associated person may apply to be registered as an associated person of more than one dealer, issuer/dealer, federal covered adviser or investment adviser, or any combination thereof, by the filing of separate applications by each registered dealer, issuer/dealer, federal covered adviser or investment adviser, and payment of separate application fees as required.

(5) Alternate Business Name.

(a) It is prohibited for any associated person to conduct securities business in this state under any name other than that of the dealer with which associated person is registered unless each of the following conditions is met:

1. The business conducted does not violate or evade any provision of Chapter 517, F.S.;

2. The business conducted does not fall within the definition of “dealer” or “investment adviser” as used in Chapter 517, F.S.; and

3. The dealer with which the associated person is registered has received written notice of the name under which business shall be conducted.

(6) Examinations/Qualifications.

(a) Every applicant for registration shall execute and submit a statement attesting to said applicant’s knowledge and review of the Florida Securities and Investor Protection Act, as contained in the Form U-4.

(b) Every applicant for initial registration as a principal or agent of a dealer shall evidence securities general knowledge by:

1. Submitting to the Office proof of passing, within two years of the date of application for registration, an appropriate examination relating to the position to be filled administered by a national securities association or a national securities exchange registered with the Securities and Exchange Commission (SEC); or

2. Submitting to the Office evidence of effective registration, within the preceding two years, with a national securities association or national stock exchange registered with the SEC, relating to the position to be filled as principal or agent; or

3. Having remained continuously registered in the capacity to be filled with the State of Florida without interruption of more than two years.

(7) Fingerprint Requirements.

(a) Fingerprints filed in accordance with Section 517.12(7), F.S., shall be submitted to the Office through a live scan vendor approved by the Florida Department of Law Enforcement (FDLE) and published on FDLE’s website for submission to FDLE and the Federal Bureau of Investigation (FBI) for a state criminal background check and a federal criminal background check. The cost of fingerprint processing shall be borne by the applicant and paid directly to the live scan vendor.

(b) The requirement to submit fingerprints is waived for those associated persons pending registration in Florida with a FINRA member firm and such fingerprints have been submitted and processed by FINRA on behalf of the member firm with which said associated person is pending registration, pursuant to the provisions of SEC rule 17f-2 (17 C.F.R. § 240.17f-2), which is incorporated by reference in Rule 69W-200.002, F.A.C.

(c) Notwithstanding any exemptions found in SEC rule 17f-2 (17 C.F.R. § 240.17f-2), any direct owner, principal, or indirect owner that is required to be reported on Form BD, Uniform Application for Broker-Dealer Registration, pursuant to Section 517.12(7), F.S., who is not currently registered with the firm they are seeking to join or act as a direct owner, principal, or indirect owner shall submit fingerprints to the Office through a live scan vendor approved by FDLE and published on FDLE’s website for submission to FDLE and the FBI for a state criminal background check and a federal criminal background check. The cost of fingerprint processing shall be borne by the applicant and paid directly to the live scan vendor.

(d) The requirement to submit fingerprints is waived for any direct owner, principal, or indirect owner that is required to be reported on Form BD, Uniform Application for Broker-Dealer Registration, pursuant to Section 517.12(7), F.S., if fingerprints have been submitted and processed by FINRA on behalf of the member firm with which the owner or principal is affiliated, pursuant to the provisions of SEC Rule 17f-2 (17 C.F.R. § 240.17f-2).

(8) Renewal Requirement.

(a) Renewal fees for associated persons of FINRA member firms shall be submitted by the firm through the CRD by December 31 of the year the registration expires as required by Section 517.12(11), F.S.

(b) For associated persons of FINRA members, failure of the firm to submit the requisite amount of fees by December 31 of the year of expiration of the registration shall result in such registration not being renewed. If December 31 falls on a Saturday, Sunday or legal holiday pursuant to Section 110.117, F.S., the renewals received on the next business day shall be considered timely received. However, an expired registration may be reinstated in accordance with the provisions of Section 517.12(11), F.S., provided that all requisite information and fees are date stamped by the cashier’s office of the Department of Financial Services on or before January 31 of the year following the year of expiration. Failure to submit the requisite amount of fees necessary to reinstate registration by January 31 of the year following the year of expiration shall result in such registration not being reinstated. If January 31 falls on a Saturday, Sunday, or legal holiday pursuant to Section 110.117, F.S., the reinstatement received on the next business day shall be considered timely received. In the event that the renewal or reinstatement is withdrawn or not granted, any fees filed to renew or reinstate registration shall become the revenue of the state pursuant to Section 517.12(10), F.S., and shall not be returnable.

(9) Termination of Registration of Principal or Agent.

(a) Where a registrant withdraws, cancels, or otherwise terminates registration, or is terminated for any reason, notice of such fact shall be filed with the Office within thirty (30) calendar days of the date of termination by electronically filing a Uniform Termination Notice for Securities Industry Registration (Form U5) (05/2009) with the Office through the CRD. A sample form is hereby incorporated by reference and is available at http://www.flrules.org/    / or http://www.flofr.com/    /.

(b) The Office may deny any request to terminate or withdraw any application or registration as provided under Section 517.161(5), F.S.

(10) Notice of Civil, Criminal or Administrative Action. An associated person shall:

(a) Notify the Office within thirty (30) calendar days of the date a complaint is served, of any civil, criminal or administrative charges filed that directly or indirectly relate to the registration or sale of securities, or which directly or indirectly relate to activities as a principal or agent, or any other activity where a breach of a fiduciary trust is alleged. This shall not include minor traffic violations; but shall include any notification of investigation by any recognized regulatory agency;

(b) Notify the Office within thirty (30) calendar days of the date filed, any answer or reply to any complaint filed as outlined in paragraph (10)(a);

(c) Notify the Office within thirty (30) calendar days of the date of decision, order, or sanction rendered, or any appeal filed with respect to such decision with regard to any complaint outlined in paragraph (10)(a).

(d) File with the Office one (1) copy of such complaint, answer or reply, decision, order, or sanction at the time of notification in accordance with paragraphs (10)(a), (10)(b), and (10)(c). Associated persons of a broker dealer who is a member of the FINRA shall file such notifications with the Office through the CRD of the FINRA in accordance with this rule. However, responses to requests by the Office for additional information shall be filed directly with the Office.

(11) Continuing Education Requirement. Failure to comply with any of the applicable continuing education requirements set forth in any one of the following shall be deemed a demonstration of unworthiness by an associated person under Section 517.161(1)(h), F.S.:

(a) FINRA Rule 1250, which is incorporated by reference in Rule 69W-200.002, F.A.C.;

(b) Rule 345A of the NYSE MKT LLC, which is incorporated by reference in Rule 69W-200.002, F.A.C.;

(c) Rule G-3(h) of the Municipal Securities Rulemaking Board, which is incorporated by reference in Rule 69W-200.002, F.A.C.;

(d) Rule 341A of NYSE MKT LLC, which is incorporated by reference in Rule 69W-200.002, F.A.C.;

(e) Article VI, Rule 11 of the Chicago Stock Exchange, which is incorporated by reference in Rule 69W-200.002, F.A.C.

Rulemaking Authority 215.405, 517.03(1), 517.12 517.12(6) FS. Law Implemented 517.12 517.12(6), (7), (10), 517.1205, 943.053 FS. History–New 9-20-82, Formerly 3E-301.02, Amended 10-15-86, 10-4-88, 6-24-90, 7-29-90, 10-14-90, 8-1-91, 6-16-92, 6-28-93, 11-14-93, 3-13-94, 4-30-96, 12-29-96, 6-22-98, 5-10-00, 9-19-00, 7-31-02, 12-11-03, Formerly 3E-600.002, Amended 3-16-06, 5-15-07, 12-24-07, 12-25-08, 11-22-10, 5-29-12, 11-11-13,       .

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Pamela Epting, Director, Division of Securities

NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Financial Services Commission

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: June 23, 2015

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: June 12, 2015