Current through Reg. 49, No. 12; March 22, 2024
(a)
Securities dealer application requirements. A complete application consists of
the following and must be filed in paper form with the Securities Commissioner:
(1) Form BD;
(2) Form U-4 for the designated officer and a
Form U-4 for each agent to be registered (officers of a corporation or partners
of a partnership shall not be deemed agents solely because of their status as
officers or partners);
(3) a copy
of articles of incorporation, partnership agreement, articles of association,
trust agreement, or other documents which indicate the form of organization,
certified by the appropriate jurisdiction or by an officer or partner of the
applicant;
(4) a balance sheet
prepared in accordance with United States generally accepted accounting
principles reflecting the financial condition of the dealer as of a date not
more than 90 days prior to the date of such filing. The balance sheet should be
compiled, reviewed, or audited by independent certified public accountants or
independent public accountants, or must instead be certified by the applicant's
principal financial officer. If certified by the principal financial officer of
the applicant, such officer shall make the certification on Form 133.18,
Certification of Balance Sheet by Principal Financial Officer.
(5) any other information deemed necessary by
the Securities Commissioner to determine a dealer's financial responsibility or
a dealer's or agent's business repute or qualifications; and
(6) the appropriate registration
fee(s).
(b) Designated
officer registration. Dealers, including an individual filing as a sole
proprietor, must file a Form U-4 application for a designated officer to
register in connection with the registration of the dealer. The dealer's
designated officer must be an officer, partner, or the sole proprietor of the
dealer and have completed the necessary registration and examination
requirements. If the designated officer of a dealer, other than a sole
proprietor, resigns or is otherwise removed from his or her position, the
dealer shall make an application to register another officer or partner within
30 days.
(c) Branch office
designation and inspection.
(1) A dealer may
designate a branch office upon initial application of the dealer or by
amendment to a current Form BR. No sales-related activity may occur in any
branch office location until such time as the dealer has notified the
Securities Commissioner that such location will function as a branch office by
submitting Form BR on CRD for FINRA member firms. For non-FINRA member firms,
the request is made by submitting Form BR in paper form to the Securities
Commissioner.
(2) Simultaneous with
the designation of a branch office, a supervisor must be designatedfor that
branch office. A supervisor is not required to be registered as a FINRA
principal, but must be registered in Texas as an agent and is responsible for
supervision of the activities of the branch office. A supervisor may not
supervise sales activities encompassing a broader range of products than those
covered by the supervisor's qualification examination(s). Within 10 business
days after a supervisor ceases to be employed or registered in such capacity by
the dealer, the dealer must designate a new supervisor, qualified by passage of
the appropriate examinations, for the branch office.
(3) Each branch office of a dealer who is
registered with the Securities Commissioner is subject to unannounced
inspections at any time during normal business hours.
(d) Automatic withdrawal of a dealer or agent
application for registration that has been pending for at least 90 days. If an
application for dealer or agent registration has been pending for at least 90
days and the applicant has failed to substantively respond to a written request
for information sent by certified mail to the applicant's address as set forth
in the application, an automatic withdrawal will occur. The written request
must have advised the applicant that if a substantive response is not received
within 30 days from the date of the certified request, the application will be
withdrawn automatically. Regardless of how long an application has been
pending, it may not be withdrawn automatically without sending certified notice
of this subsection to the address set forth in the application and allowing the
applicant 30 calendar days from the date of the notice to provide a substantive
written response. A copy of this subsection and the most recent written request
for information will be included with the certified letter.
(e) Central Registration Depository System
(CRD).
(1) Whenever the Texas Securities Act
or Board rules require the filing of an application with the Securities
Commissioner for dealer or agent registration, members of FINRA or applicants
for membership in FINRA shall make such filing electronically through the CRD
which is jointly operated by FINRA and the North American Securities
Administrators Association, Inc. (NASAA). Applicants shall use the applicable
uniform form for the submission of the filing in question and shall supplement
their electronic filing by filing, in paper form, the items listed in
paragraphs (3) - (6) of subsection (a) of this section, directly with the
Commissioner.
(2) Uniform forms
submitted through the CRD that designate Texas as a jurisdiction in which the
filing is to be made are deemed to be filed with the Securities Commissioner
and constitute official records of the Board.
