Rules & Regulations of the State of Tennessee
Title 0780 - Commerce and Insurance
Subtitle 0780-04 - Division of Securities
Chapter 0780-04-03 - Industry Regulation
Section 0780-04-03-.01 - REGISTRATION
Universal Citation: TN Comp Rules and Regs 0780-04-03-.01
Current through September 24, 2024
(1) Broker-Dealer Registration.
(a) CRD System Eligible Broker-Dealer
Applicants.
1. All broker-dealer applicants
who are eligible must apply for initial registration in Tennessee through the
CRD System by complying with the application procedure required by the CRD
System. The application filed through the CRD System shall contain the
following, unless waived by order of the commissioner.
(i) A Form BD and all information and
exhibits required by such Form;
(ii) The appropriate application fee as set
forth in the Act; and
(iii)
Satisfactory evidence of a passing score on an appropriate principal's
examination taken by the executive officers or principals of the
applicant.
2.
Broker-dealers applying through the CRD System shall also, concurrently with
the filing of an application through the CRD System, file with the Division,
unless waived by the commissioner:
(i)
(I) A copy of the applicant's most recent
annual audited report filed pursuant to SEC Rule 17a-5 (
17 C.F.R.
§240.17a-5) , plus all quarterly FOCUS
Reports filed pursuant to that Rule since the most recent annual audited
report; or
(II) If the applicant
has not yet had an audit performed pursuant to its first fiscal year of
existence, in lieu of complying with item (1)(a)2.(i) (I) of this Rule it may
submit an unaudited balance sheet and income statement in such detail as will
disclose the nature and amount of assets and liabilities and the net worth of
the applicant. Such financial statements shall be prepared as of a date within
thirty (30) days of the filing date and shall be certified as to their
correctness by the sole proprietor, a general partner, or a duly authorized
executive officer of the applicant, and shall be accompanied by a Designation
of Accountant form to be executed by the accountant designated on such form;
or
(III) The financial reports
required by items (1)(a)2.(i)(I-II) of this Rule shall demonstrate compliance
with the appropriate net capital requirement for a registered
broker-dealer.
(ii) Such
other information as the Division may request from a particular applicant to
determine eligibility for registration.
(b) Other Broker-Dealer Applicants. All
applications for initial registration as a broker-dealer other than those
specified in subparagraph (1)(a) of this Rule shall be submitted directly to
the Division and shall contain the following information, unless waived by
order of the commissioner:
1. A Form BD and
all information and exhibits required by such Form;
2. The appropriate application fee as set
forth in the Act;
3.
(i) A balance sheet and income statement as
of the end of the applicant' s most recent fiscal year prepared in accordance
with generally accepted accounting principles consistently applied and examined
and reported on by an independent:
(I)
certified public accountant; or
(II) public accountant currently licensed in
the state of Tennessee, and any subsequent quarterly balance sheets and income
statements prepared in accordance with generally accepted accounting principles
consistently applied; or
(ii) If the applicant has not yet had an
audit performed in its first year of existence, in lieu of complying with
subpart (1)(b)3.(i) of this Rule, it may submit an unaudited balance sheet and
income statement in such detail as will disclose the nature and amount of
assets and liabilities and the net worth of the applicant. Such financial
statements shall be prepared as of a date within thirty (30) days of the filing
date and shall be certified as to their correctness by the sole proprietor, a
general partner, or a duly authorized executive officer of the applicant, and
shall be accompanied by a Designation of Accountant form as provided by the
Division. Such Designation of Accountant form shall be executed by the
designated accountant;
(iii) The
financial reports required by subparts (1)(b)3.(i-ii) of this Rule shall
demonstrate compliance with the appropriate net capital requirement for a
registered broker-dealer;
4. Satisfactory evidence of a passing score
on an appropriate principal's examination taken by the executive officers or
principals of the applicant; and
5.
Such other information as the Division may request of a particular applicant to
determine eligibility for registration.
(c) An application is deemed filed for
purposes of T.C.A. §
48-1-110(a)(4)
and this Rule when it is complete. An application is deemed to be complete when
all of the information requested by the Division pursuant to subparagraph
(1)(a) or parts (1)(b)1.-5. of this Rule is received by the Division.
(d) All broker-dealers who are eligible must
apply for renewal of registration in Tennessee through the CRD System by
complying with the requirements of the CRD System.
Applications for renewal of other broker-dealers must be submitted directly to the Division and must contain the following:
1. The appropriate renewal form as received
from the Division and all information and exhibits required by such form;
and
2. The appropriate fee as set
forth in the Act.
(e) A
person who acts as a "clearing broker-dealer" with respect to any securities
transaction in Tennessee must register as a broker-dealer in
Tennessee.
(f) A registered
broker-dealer shall not conduct business in this state through an agent unless
and until the broker-dealer has registered that agent in this state.
(g) The registration of a broker-dealer shall
be subject to revocation proceedings even though the registrant has filed an
application to withdraw its registration, and an application for registration
as a broker-dealer shall be subject to denial proceedings even though the
applicant has filed a written request to withdraw its application. The
commissioner may institute a revocation or denial proceeding under T.C.A.
§
48-1-112 within thirty (30) days
after the filing date of an application to withdraw on Form BDW by a registrant
or a written request to withdraw by an applicant and enter a revocation order
as of the last date on which registration was effective or a denial order as of
the filing date of the written request to withdraw an application. For purposes
of this subparagraph, "filing date" shall mean the date upon which the Form BDW
filed on behalf of a registrant or a written request filed on behalf of an
applicant is actually received by the Division through the CRD System or
through a direct filing with the Division, whichever is appropriate for the
applicant.
(h) Abandonment.
1. The Division may determine that an
application to register a broker-dealer has been abandoned if:
(i) The application has been on file with the
Division for more than one hundred eighty (180) days without becoming
registered and no written communication has been received by the Division in
connection with the application during such time period; or
(ii) A period of one hundred (180) days has
elapsed since the date of the Division's receipt of the most recent written
communication to the Division from or on behalf of the applicant.
2. Upon the determination that an
application has been abandoned, the Division shall, by Order of Abandonment,
cancel the pending application without prejudice and, within thirty (30) days
of such cancellation, mail a copy of the Order of Abandonment to the last known
business address of the applicant.
(2) Agent Registration.
(a) CRD System Eligible Agent Applicants.
1. All agent applicants who are eligible must
apply for initial registration in Tennessee through the CRD System by complying
with the application procedure required by the CRD System. The application
filed through the CRD System shall contain the following:
(i) A Form U4 and all information and
exhibits required by such Form;
(ii) The appropriate application fee as set
forth in the Act; and
(iii)
Satisfactory evidence of a passing score by the applicant on the appropriate
examinations.
2. Agents
applying for registration through the CRD System shall also provide directly to
the Division such other information as the Division may request from a
particular applicant to determine eligibility for registration.
(b) Other Agent Applicants. All
applications for registration as an agent other than those specified in
subparagraph (2)(a) of this Rule shall be submitted directly to the Division
and shall contain the following information:
1. A Form U4 and all information and exhibits
required by such Form;
2. The
appropriate application fee as set forth in the Act;
3. Satisfactory evidence of a passing score
by the applicant on the appropriate examinations; and
4. Such other information as the Division may
request of a particular applicant to determine eligibility for
registration.
(c) An
application is deemed filed for purposes of T.C.A. §
48-1-110(a)(4)
and this Rule when it is complete. An application is deemed to be complete when
all information requested by the Division pursuant to subparagraph (2)(a) or
parts (2)(b)1.- 4. of this Rule is received by the Division.
(d) All agents who are eligible must apply
for renewal of registration in Tennessee through the CRD System by complying
with the requirements of the CRD System. Applications for renewal of all other
agents must be submitted directly to the Division and must contain the
following:
1. The appropriate renewal form as
received from the Division and all information and exhibits required by such
form; and
2. The appropriate fee as
set forth in the Act.
(e) The registration of an agent shall be
subject to revocation proceedings even though the registrant has filed an
application to terminate his or her registration, and an application for
registration as an agent shall be subject to denial proceedings even though the
applicant has filed to withdraw his or her application. The commissioner may
institute a revocation or denial proceeding under T.C.A. §
48-1-112 within thirty (30) days
after the filing date of an application to terminate or withdraw on Form U5 by
a registrant or an applicant and enter a revocation order as of the last date
on which registration was effective or a denial order as of the filing date of
the request to withdraw an application. For purposes of this subparagraph,
"filing date" shall mean the date upon which notice of the Form U5 filed on
behalf of a registrant or an applicant is actually received by the Division
through the CRD System, or for non-CRD System agents, the date upon which the
Form U5 is received directly by the Division.
(f) There is no provision under the Act to
transfer an individual agent's registration. When an agent terminates his
relationship with a broker-dealer with whom he is registered and commences a
new relationship with another broker-dealer, a termination of registration
shall be effected by the broker-dealer with which the individual agent had the
prior relationship and an application for initial registration shall be filed
by the broker-dealer with which the individual agent proposes to have the new
relationship. The termination of registration shall be effected by the
broker-dealer by submitting a Form U5 through the CRD System or directly with
the Division, whichever is appropriate, within thirty (30) days of the date of
termination. The filings prescribed in this subparagraph (2)(f) are not
required in the event of a mass transfer of agent registrations pursuant to CRD
System operational procedures and are not required in the event of a succession
as permitted in T.C.A. §
48-1-110(c).
(g) All agent applicants who have voluntarily
terminated registration with a broker-dealer and who are eligible under the
rules established by the CRD System may apply for temporary registration with
another broker-dealer through the CRD System by complying with the procedure
required by the CRD System. In the case of all other voluntary terminations of
a non-CRD agent's registration with a particular broker-dealer pursuant to
subparagraph (2)(f) of this Rule, the Division may, in its discretion, allow
the agent to be temporarily registered with the broker-dealer with whom the
agent is seeking permanent registration. Such temporary registration will not
be granted until the Form U4 is received by the Division, and a written request
is made by such other broker-dealer. Any such temporary registration shall
expire upon the grant or denial of the application for permanent registration,
and in no event shall last more than thirty (30) days.
(h) Abandonment.
1. The Division may determine that an
application to register an agent has been abandoned if:
(i) The application has been on file with the
Division for more than one hundred eighty (180) days without becoming
registered and no written communication has been received by the Division in
connection with the application during such time period; or
(ii) A period of one hundred eighty (180)
days has elapsed since the date of the Division's receipt of the most recent
written communication to the Division from or on behalf of the
applicant.
2. Upon the
determination that an application through the CRD System has been abandoned,
the Division shall, as provided through the routine operation of the CRD
System, cancel such application without prejudice.
3. Upon determination that an application
submitted directly to the Division has been abandoned, the Division shall. by
Order of Abandonment. cancel the pending application without prejudice and,
within thirty (30) days of such cancellation, mail a copy of the Order of
Abandonment to the last known business address of the applicant.
(3) Investment Adviser Registration.
(a) IARD Eligible Investment
Advisers.
1. All investment advisers who are
eligible must apply for initial registration in Tennessee through the IARD by
complying with the electronic application procedures required by the IARD. The
application filed through the IARD shall contain the following, unless waived
by order of the commissioner:
(i) A Form ADV
and all information and exhibits required by such Form;
(ii) The appropriate application fee as set
forth in the Act; and
(iii)
Satisfaction of the investment adviser representative examination requirements
under paragraph (10) of this Rule by appropriate executive officers or
principals of the applicant.
2. Investment advisers applying through the
IARD shall also, concurrently with the filing of an application to the IARD,
file with the Division, unless waived by order of the commissioner:
(i)
(I) If
the applicant is a corporation, a certified copy of its articles of
incorporation and amendments thereto, and a copy of its bylaws certified by the
secretary of the corporation;
(II)
If the applicant is a partnership, a copy of its partnership agreement,
certified by a general partner; or
(III) If the applicant is a limited liability
company, a copy of its articles of organization as filed within the state in
which it was formed, and a copy of its operating agreement, if any, certified
by a managing member;
(ii)
(I) A
balance sheet prepared in accordance with generally accepted accounting
principles consistently applied as of a date not more than ninety (90) days
prior to the date of such application, which shall demonstrate compliance with
the net capital requirement for a registered investment adviser in the state in
which the applicant maintains its principal place of business. For purposes of
this item (3)(a)2.(ii)(I), "principal place of business" means the executive
office of the investment adviser from which the officers, partners, or managers
of the investment adviser direct, control, and coordinate the activities of the
investment adviser; or
(II) For any
applicant which has or will have custody of client funds or securities, or
which requires or will require prepayment of more than five hundred dollars
($500) in advisory fees six (6) or more months in advance, an audited balance
sheet prepared in accordance with part (4)(a)2. of Rule 0780-04-03-.02. If such
applicant has not yet had an audit performed pursuant to its first fiscal year
of existence, it may submit an unaudited balance sheet in such detail as will
disclose the nature and amount of assets and liabilities and the net worth and
net capital of the applicant. Such financial statement shall be prepared as of
a date within thirty (30) days of the filing date and shall be certified as to
its correctness by the sole proprietor, a general partner, or a duly authorized
executive officer of the applicant, and shall be accompanied by a designation
of accountant to be executed by the accountant so designated to perform the
applicant's first annual audit; and
(iii) Such other information as the Division
may request of a particular applicant to determine eligibility for
registration.
(b) Other Investment Adviser Applicants. All
applications for initial registration as an investment adviser other than those
specified in subparagraph (3)(a) of this Rule shall be submitted in paper
format directly to the Division and shall contain the following information,
unless waived by order of the commissioner:
1. A Form ADV and all information and
exhibits required by such Form;
2.
The appropriate application fee as set forth in the Act;
3.
(i) If
the applicant is a corporation, a certified copy of its articles of
incorporation and amendments thereto, and a copy of its bylaws certified by the
secretary of the corporation;
(ii)
If the applicant is a partnership, a copy of its partnership agreement,
certified by a general partner; or
(iii) If the applicant is a limited liability
company, a copy of its articles of organization as filed within the state in
which it was formed, and a copy of its operating agreement certified by a
managing member;
4.
(i) A balance sheet prepared in accordance
with generally accepted accounting principles consistently applied as of a date
not more than ninety (90) days prior to the date of such application, which
shall demonstrate compliance with the net capital requirement for a registered
investment adviser in the state in which the applicant maintains its principal
place of business. For purposes of this subpart (3)(b)4.(i), "principal place
of business" means the executive office of the investment adviser from which
the officers, partners, or managers of the investment adviser direct, control,
and coordinate the activities of the investment adviser; or
(ii) For any applicant which has or will have
custody of client funds or securities, or which requires or will require
prepayment of more than five hundred dollars ($500) in advisory fees six (6) or
more months in advance, an audited balance sheet prepared in accordance with
part (4)(a)2. of Rule 0780-04-03-.02. If such applicant has not yet had an
audit performed pursuant to its first fiscal year of existence, it may submit
an unaudited balance sheet in such detail as will disclose the nature and
amount of assets and liabilities and the net worth and net capital of the
applicant. Such financial statement shall be prepared as of a date within
thirty (30) days of the filing date and shall be certified as to its
correctness by the sole proprietor, a general partner, or a duly authorized
executive officer of the applicant, and shall be accompanied by a designation
of accountant to be executed by the accountant so designated to perform the
applicant's first annual audit;
5. Satisfaction of the investment adviser
representative examination requirements under paragraph (10) of Rule
0780-04-03-.01 by appropriate executive officers or principals of the
applicant;
6. Such other
information as the Division may request of a particular applicant to determine
eligibility for registration; and
7. Evidence of a temporary exemption or,
prior to December 31, 2003, evidence of a continuing hardship exemption as
issued by the Division or another state securities administrator, which exempts
the applicant from the requirements to make electronic filings through the IARD
as required by subparagraphs (3)(a) and (3)(e) of this Rule and by subparagraph
(4)(d) of Rule 0780-04-03-.02.
(c) Hardship Exemptions. This subparagraph
provides two "hardship exemptions" from the requirements to make electronic
filings through the IARD as required by the subparagraphs (3)(a) and (3)(e) of
this Rule and by subparagraph (4)(d) of Rule 0780-04-03-.02.
1. Temporary Hardship Exemption.
(i) Investment advisers registered or
required to be registered under the Act who experience unanticipated technical
difficulties that prevent submission of an electronic filing to the IARD may
request a temporary hardship exemption from the requirements to file
electronically.
(ii) To request a
temporary hardship exemption, the investment adviser must:
(I) File Form ADV-H in paper format with the
state securities administrator where the investment adviser's principal place
of business is located, or the Division if appropriate, no later than one (1)
business day after the filing (that is the subject of the Form ADV-H) was due;
and
(II) Submit the filing that is
the subject of the Form ADV-H in electronic format to the IARD no later than
seven (7) business days after the filing was due.
(iii) Effective Date Upon Filing. The
temporary hardship exemption will be deemed effective by the commissioner upon
receipt of the complete Form ADV-H by the state securities administrator where
the investment adviser's principal place of business is located or with the
Division if such other state securities administrator does not routinely
process applications for temporary hardship exemptions. Multiple temporary
hardship exemption requests within the same calendar year may be allowed or
disallowed at the discretion of the commissioner.
2. Continuing Hardship Exemption.
(i) Criteria for Exemption. A continuing
hardship exemption will be granted only if the investment adviser is able to
demonstrate to the satisfaction of the commissioner that the electronic filing
requirements of these Rules are prohibitively burdensome.
(ii) To apply for a continuing hardship
exemption, the investment adviser must:
(I)
File Form ADV-H in paper format with the appropriate state securities
administrator, or the Division if appropriate, at least twenty (20) business
days before a filing is due; and
(II) If a filing is due to more than one (1)
state securities administrator, the Form ADV-H must be filed with the state
securities administrator where the investment adviser's principal place of
business is located or with the Division if such state securities administrator
does not routinely process applications for continuing hardship exemptions. If
the Division is the state securities administrator which receives the
application for a continuing hardship exemption, the commissioner will grant or
deny the application within ten (10) business days after the filing of Form
ADV-H or within ten (10) business days after the receipt of further information
or materials requested from the investment adviser by the Division to determine
eligibility for such exemption.
(iii) Effective Date Upon Approval. The
exemption is effective upon approval by the state securities administrator
where the investment adviser's principal place of business is located or by the
commissioner, whichever is appropriate. The time period of the exemption may be
no longer than one (1) year after the exemption approval date. Upon such
approval, the investment adviser must, no later than five (5) business days
after the exemption approval date, commence submitting necessary filings to the
IARD in paper format (along with the appropriate processing fees), or to the
Division, whichever is appropriate, for the period of time for which the
exemption is granted.
3.
Recognition of Exemption. The decision to grant or deny a request for a
hardship exemption will be made by the state securities administrator where the
investment adviser's principal place of business is located or the
commissioner, whichever is appropriate. Approval of an exemption by an
appropriate state securities administrator in another state will be recognized
and accepted by the commissioner except that the commissioner will not grant,
accept, or recognize any continuing hardship exemption after December 31,
2003.
(d) An application
is deemed filed for purposes of T.C.A. §
48-1-110(a)(4)
and this Rule when it is complete. An application is deemed to be complete when
all information requested by the Division pursuant to subparagraphs (3)(a) or
(3)(b) of this Rule is received by the Division.
(e) All investment advisers who are eligible
must apply for renewal of registration in Tennessee through the IARD by
complying with the requirements of the IARD. Applications for renewal of other
investment advisers must be submitted directly to the Division and must contain
the following:
1. The appropriate renewal
form as prescribed by the Division and all information and exhibits required by
such form; and
2. The appropriate
fee as set forth in the Act.
(f) The registration of an investment adviser
shall be subject to revocation proceedings even though the registrant has filed
an application to withdraw its registration, and an application for
registration as an investment adviser shall be subject to denial proceedings
even though the applicant has filed a written request to withdraw its
application. The commissioner may institute a revocation or denial proceeding
under T.C.A. §
48-1-112 within thirty (30) days
after the filing date of application to withdraw on Form ADV-W by a registrant
or a written request to withdraw by an applicant and enter a revocation order
as of the last date on which registration was effective or a denial order as of
the filing date of the written request to withdraw an application. For purposes
of this subparagraph, "filing date" shall mean the date upon which the Form
ADV-W or a written request filed on behalf of an applicant through the IARD or
through a direct filing with the Division, whichever is appropriate, is
actually received by the Division.
(g) Abandonment.
1. The Division may determine that an
application to register an investment adviser has been abandoned if:
(i) The application has been on file with the
Division for more than one hundred eighty (180) days without the applicant
becoming registered and no written communication has been received by the
Division in connection with the application during such time period;
or
(ii) A period of one hundred
eighty (180) days has elapsed since the date of the Division's receipt of the
most recent written communication to the Division from or on behalf of the
applicant.
2. Upon the
determination that an application has been abandoned, the commissioner shall,
by Order of Abandonment, cancel the pending application without prejudice and,
within thirty (30) days of such cancellation, mail a copy of the Order of
Abandonment to the last known business address of the applicant.
(4) Examination of Agents and Principals of Broker-Dealers.
(a)
Agents. Each applicant for initial registration as an agent shall receive a
passing grade on:
1. An examination
administered by the FINRA, the New York Stock Exchange, or the SEC which tests
the applicant's general knowledge of securities principles; and
2. The Uniform Securities Agent State Law
Examination (USASLE/Series 63) or the Uniform Combined State Law Examination
(UCSLE/Series 66) as either is administered by the FINRA.
(b) Principals. Each applicant for initial
registration as a principal or supervisory officer of a broker-dealer must
receive a passing grade on an appropriate securities examination for principals
administered by the FINRA, the New York Stock Exchange, or the SEC.
(c) The passing grade on a particular
examination required for registration in this state shall be the passing grade
for that particular examination as set by the agency or organization
administering the examination. For purposes of this paragraph (4), a duly
granted examination waiver by the FINRA, the New York Stock Exchange, or the
SEC shall constitute a passing grade for the examination requirements of part
(4)(a)1. and subparagraphs (4)(b) and (4)(d) of this Rule.
(d) Each applicant for initial registration:
1. Shall have received a passing grade on the
required examinations within the preceding twenty-four (24) months;
or
2. Shall have received a passing
grade on the required examinations prior to the preceding twenty-four (24)
months and shall have been registered in an appropriate jurisdiction in the
capacity for which the applicant is currently seeking registration within the
preceding twenty-four (24) months.
(5) Registered Broker-Dealer Net Capital Requirements.
(a) FINRA Broker-Dealers and
Exchange Members.
All broker-dealers, except government securities broker-dealers, who are members of the FINRA or a national exchange, shall have and maintain net capital in such minimum amounts as are prescribed for their activities under SEC Rule 15c3-1 ( 17 C.F.R. §240.15c3 - 1).
2. The aggregate indebtedness of each
broker-dealer described in part (5)(a)1. of this Rule to all persons shall not
exceed the levels prescribed under SEC Rule 15c3-1 ( 17 C.F.R. §240.15c3 -
1).
3. For purposes of this
subparagraph (5)(a), the term "net capital" shall have the same meaning as in
SEC Rule 15c3-1 ( 17 C.F.R. §240.15c3 - 1).
(b) Government Securities Broker-Dealer. Each
registered government securities broker-dealer shall have and maintain liquid
capital in such minimum amounts as are prescribed under SEC Rule 15Ca2-2 ( 17
C.F.R. §240.15Ca2 - 2) and Department of Treasury Rule 402.2 (
17 C.F.R.
§402.2) .
(c) Other Broker-Dealers.
1. Each registered broker-dealer that does
not fall within subparagraphs (5)(a) and (5)(b) of this Rule shall have and
maintain a minimum net capital of twenty-five thousand dollars ($25,000). If
such broker-dealer has a net capital of less than one hundred thousand dollars
($100,000), it shall post a surety bond of ten thousand dollars
($10,000).
2. For purposes of this
subparagraph (5)(c), net capital shall be defined as total assets less total
liabilities (net worth) as computed in accordance with generally accepted
accounting principles consistently applied.
(6) Investment Adviser Net Capital Requirements.
(a) Except as provided under
subparagraph (6)(d) of this Rule, every investment adviser registered or to be
registered shall have and maintain a minimum net capital of fifteen thousand
dollars ($15,000).
(b) For purposes
of this paragraph (6), "net capital" shall be defined as total assets less
total liabilities (net worth) as computed in accordance with generally accepted
accounting principles consistently applied minus the following non-allowable
assets:
1. In the case of an individual: home
equity, home furnishings, automobiles, goodwill, and any other personal item
not readily marketable;
2. In the
case of a corporation: advances or loans to stockholders, officers, or
affiliates, and uncollateralized receivables from stockholders, officers, or
affiliates;
3. In the case of a
partnership: advances or loans to partners or affiliates, and uncollateralized
receivables from partners or affiliates; and
4. In the case of a limited liability
company: advances or loans to members or affiliates, and uncollateralized
receivables from members or affiliates.
(c) The Division may require that a current
appraisal be submitted in order to establish the value of any asset.
(d) An investment adviser, which has its
principal place of business in another state, shall not be subject to the net
capital requirements of this paragraph (6) if:
1. The investment adviser is registered as an
investment adviser in the state in which it maintains its principal place of
business;
2. The investment adviser
is in compliance with the applicable net capital requirement in the state in
which it maintains its principal place of business; and
3. The investment adviser is in compliance
with any bonding requirement in the state in which it maintains its principal
place of business.
(e)
For purposes of this paragraph (6), "principal place of business" of an
investment adviser means the executive office of the investment adviser from
which the officers, partners, or managers of the investment adviser direct,
control, and coordinate the activities of the investment adviser.
(7) Branch Offices and Other Business Locations of Broker-Dealers.
(a)
Every broker-dealer registered in Tennessee shall notify the Division of the
establishment of any branch office or other business location in Tennessee, as
well as its current address and the name or names of the agent or agents
currently in charge.
(b) Such
notification of establishment, change in address, or change in identity of any
agent or agents in charge thereof must be filed with the Division through the
CRD System or through a direct filing, whichever is appropriate, within thirty
(30) days from the date of establishment or change.
(8) Withdrawal of Applications. An application for registration as a broker-dealer or investment adviser may be withdrawn prior to the effectiveness of registration by following the procedures established by the CRD System and the IARD or, for other broker-dealers and other investment advisers, by filing a written request for withdrawal directly with the Division. An application for registration as an agent or investment adviser representative may be withdrawn prior to the effectiveness of the registration by following the procedures established by the CRD System or IARD or, for other agents and other investment adviser representatives, by filing a written request for withdrawal directly with the Division.
(9) Investment Adviser Representative Registration.
(a) IARD and CRD
System Eligible Investment Adviser Representative Applicants.
1. All investment adviser representative
applicants who are eligible must apply for initial registration in Tennessee
through the IARD and CRD System by complying with the application procedures
required by the IARD and CRD System. The application filed through the IARD and
CRD System shall contain the following:
(i) A
Form U4 and all information and exhibits required by such Form;
(ii) The appropriate application fee as set
forth in the Act; and
(iii)
Satisfactory evidence of a passing score by the applicant on the appropriate
examinations.
2.
Investment adviser representatives applying for registration through the IARD
and CRD System shall also provide directly to the Division such other
information as the Division may request from a particular applicant to
determine eligibility for registration.
(b) Other Investment Adviser Representative
Applicants. All applications for registration as an investment adviser
representative other than those specified in subparagraph (9)(a) of this Rule
shall be submitted directly to the Division and shall contain the following
information:
1. A Form U4 and all information
and exhibits required by such Form;
2. The appropriate application fee as set
forth in the Act;
3. Satisfactory
evidence of a passing score by the applicant on the appropriate examinations;
and
4. Such other information as
the Division may request of a particular applicant to determine eligibility for
registration.
(c) An
application is deemed filed for purposes of T.C.A. §
48-1-110(a)(4)
and this Rule when it is complete. An application is deemed to be complete when
all information requested by the Division pursuant to subparagraph (9)(a) and
parts (9)(b)1.-4. of this Rule is received by the Division.
(d) All investment adviser representatives
who are eligible must apply for renewal of registration in Tennessee through
the IARD and CRD System by complying with the requirements of the IARD and CRD
System. Applications for renewal of all other investment adviser
representatives must be submitted directly to the Division and must contain the
following:
1. The appropriate renewal form as
received from the Division and all information and exhibits required by such
form; and
2. The appropriate fee as
set forth in the Act.
(e) The registration of an investment adviser
representative shall be subject to revocation proceedings even though the
registrant has filed an application to terminate his or her registration, and
an application for registration as an investment adviser representative shall
be subject to denial proceedings even though the applicant has filed to
withdraw his or her application. The commissioner may institute a revocation or
denial proceeding under T.C.A. §
48-1-112 within thirty (30) days
after the filing date of an application to terminate or withdraw on Form U5 by
a registrant or an applicant and enter a revocation order as of the last date
on which registration was effective or a denial order as of the filing date of
the request to withdraw an application. For purposes of this subparagraph,
"filing date" shall mean the date upon which notice of the Form U5 filed on
behalf of a registrant or an applicant is actually received by the Division
through the IARD and CRD System, or for non-IARD and CRD System investment
adviser representatives, the date upon which the Form U5 is received directly
by the Division.
(f) There is no
provision under the Act to transfer an individual investment adviser
representative's registration. When an investment adviser representative
terminates his relationship with an investment adviser with whom he is
registered and commences a new relationship with another investment adviser, a
termination of registration shall be effected by the investment adviser with
which the individual investment adviser representative had the prior
relationship and an application for initial registration shall be filed by the
investment adviser with which the individual investment adviser representative
proposes to have the new relationship. The termination of registration shall be
effected by the investment adviser by submitting a Form U5 through the IARD and
CRD System or directly with the Division, whichever is appropriate, within
thirty (30) days of the date of termination. The filings prescribed in this
subparagraph (9)(f) are not required in the event of a mass transfer of
investment adviser representative registrations pursuant to IARD and CRD System
operational procedures and are not required in the event of a succession as
permitted in T.C.A. §
48-1-110(c).
(g) All investment adviser representative
applicants who have voluntarily terminated registration with an investment
adviser and who are eligible under the rules established by the IARD and CRD
System may apply for temporary registration with another investment adviser
through the IARD and CRD System by complying with the procedure required by the
IARD and CRD System. In the case of all other voluntary terminations of a
non-IARD and CRD System eligible investment adviser representative's
registration with a particular investment adviser pursuant to subparagraph
(9)(f) of this Rule, the Division may, in its discretion, allow the investment
adviser representative to be temporarily registered with the investment adviser
with whom the investment adviser representative is seeking permanent
registration. Such temporary registration will not be granted until the Form U4
is received by the Division, and a written request is made by such other
investment adviser. Any such temporary registration shall expire upon the grant
or denial of the application for permanent registration, and in no event shall
last more than thirty (30) days.
(h) Abandonment.
1. The Division may determine that an
application to register an investment adviser representative has been abandoned
if:
(i) The application has been on file with
the Division for more than one hundred eighty (180) days without becoming
registered and no written communication has been received by the Division in
connection with the application during such time period; or
(ii) A period of one hundred eighty (180)
days has elapsed since the date of the Division's receipt of the most recent
written communication to the Division from or on behalf of the
applicant.
2. Upon the
determination that an application through the IARD and CRD System has been
abandoned, the Division shall, as provided through the routine operation of the
IARD and CRD System, cancel such application without prejudice.
3. Upon determination that an application
submitted directly to the Division has been abandoned, the Division shall, by
Order of Abandonment, cancel the pending application without prejudice and,
within thirty (30) days of such cancellation, mail a copy of the Order of
Abandonment to the last known business address of the applicant.
(i) An investment adviser
representative who is associated with an investment adviser which has filed a
completed investment adviser notice filing pursuant to T.C.A. §
48-1-109(c)(2),
and who has no place of business located within this state, is not required to
register as an investment adviser representative of such investment adviser in
this state.
(j) An investment
adviser representative who is associated with an investment adviser which has
filed a completed investment adviser notice filing pursuant to T.C.A. §
48-1-109(c)(2),
and who is not included in the definition of "investment adviser
representative" which appears in SEC Rule 203A-3 (
17 C.F.R.
§275.203A-3) , is not required to
register as an investment adviser representative of such investment adviser in
this state.
(k) An individual who
solicits, offers, or negotiates for sale of or sells investment advisory
services, but who is not compensated directly or indirectly for such
activities, is not required to register as an investment adviser representative
in this state.
(10) Examination of Investment Adviser Representatives.
(a) Each applicant for initial registration
as an investment adviser representative:
1.
Shall receive a passing grade on the Uniform Investment Adviser Law Examination
(UIALE/Series 65) as administered by the FINRA;
2. Shall receive passing grades on the
General Securities Representative Examination (Series 7) and the Uniform
Combined State Law Examination (UCSLE/Series 66) as administered by the
FINRA;
3. Shall have been
registered as an investment adviser representative in any state within the
preceding twenty-four (24) months; or
4. Shall currently hold one (1) of the
following professional designations:
(i)
Certified Financial Planner (CFP) awarded by the Certified Financial Planner
Board of Standards, Inc.;
(ii)
Chartered Financial Consultant (ChFC) awarded by the American College, Bryn
Mawr, PA;
(iii) Personal Financial
Specialist (PFS) awarded by the American Institute of Certified Public
Accountants;
(iv) Chartered
Financial Analyst (CFA) awarded by the Institute of Chartered Financial
Analysts; or
(v) Chartered
Investment Counselor (CIC) awarded by the Investment Adviser Association,
Inc.
(b) The
passing grade on a particular examination required for registration in this
state shall be the passing grade for that particular examination as set by the
agency or organization administering the examination. For purposes of this
paragraph (10), a duly granted examination waiver by the FINRA, the New York
Stock Exchange, or the SEC shall constitute a passing grade for the General
Securities Representative Examination (Series 7) requirement of part (10)(a)2.
and subparagraph (10)(c) of this Rule.
(c) Each applicant who demonstrates
eligibility for initial registration by receiving a passing grade on the
examinations delineated in parts (10)(a)1.-2. of this Rule:
1. Shall have received a passing grade on the
required examinations within the preceding twenty-four (24) months;
or
2. Shall have received a passing
grade on the required examinations prior to the preceding twenty-four (24)
months and shall have been registered in an appropriate jurisdiction in the
capacity appropriate to the required examination within the preceding
twenty-four (24) months.
(d) The requirements of this paragraph (10)
shall apply to all applications for investment adviser registration and
investment adviser representative registration filed with the Division on or
after April 1, 2004.
Authority: T.C.A. §§ 48-1-102, 48-1-109, 48-1-110, 48-1-111, 48-1-112, 48-1-115, 48-1-116, Public Acts of 2001, Chapter 61, §222 of the Investment Advisers Act of 1940, as amended by §304(c) of the National Securities Markets Improvement Act of 1996, 17 C.F.R. §240.15c3 - 1, 17 C.F.R. §240.15Ca2-2, 17 C.F.R. § 240.17a-5, 17 C.F.R. § 275.203A-3, and 17 C.F.R. §402.2.
Disclaimer: These regulations may not be the most recent version. Tennessee may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.
