Utah Administrative Code
Topic - Commerce
Title R164 - Securities
Rule R164-4 - Licensing Requirements
Section R164-4-3 - General Licensing Requirements
Universal Citation: UT Admin Code R 164-4-3
Current through Bulletin 2024-06, March 15, 2024
(A) Authority and Purpose
(1) The Division enacts this rule under
authority granted by Sections
61-1-4,
61-1-5,
61-1-6, and
61-1-24.
(2) This rule applies to the licensing of
broker-dealers, broker-dealer agents, issuer-agents, investment advisers, and
investment adviser representatives.
(B) Definitions
(1) "CRD" means the Central Registration
Depository operated by FINRA.
(2)
"Division" means the Division of Securities, Utah Department of
Commerce.
(3) "IARD" means the
Investment Adviser Registration Depository operated by FINRA.
(4) "NASAA" means the North American
Securities Administrators Association, Inc.
(5) "FINRA" means the Financial Industry
Regulatory Authority, formerly known as NASD.
(6) "SEC" means the United States Securities
and Exchange Commission.
(7)
"Termination" means the date on which FINRA processes FINRA Form U-5 - Uniform
Termination Notice for Securities Industry Registration.
(C) Examination requirements
(1) A broker-dealer agent must pass the
Series 63, Uniform Securities Agent State Law Examination (Series 63 Exam) or
the Series 66, Uniform Combined State Law Examination (Series 66 Exam). If the
broker-dealer agent's most recent license terminated two or more years before
the date of receipt by the Division of a new application, the agent will be
required to retake the examination.
(2) An issuer-agent must pass the Series 63
Exam or the Series 66 Exam. If the issuer-agent's most recent license
terminated two or more years before the date of receipt by the Division of a
new application, the agent will be required to retake the
examination.
(3) Investment
advisers and investment adviser representatives
(3)(a) Examination requirements. An
individual applying to be licensed as an investment adviser or investment
adviser representative shall provide the Division with proof of obtaining a
passing score on one of the following examinations:
(3)(a)(i) Series 65, Uniform Investment
Adviser Law Examination (Series 65 Exam); or
(3)(a)(ii) Series 7, General Securities
Representative Examination (Series 7 Exam) and Series 66 Exam.
(3)(b) If an investment adviser or
investment adviser representative has not been licensed in any jurisdiction for
a period of two (2) years, the investment adviser or investment adviser
representative will be required to retake the examination.
(3)(c) Waivers. The investment adviser or
investment adviser representative may request a waiver of the examination
requirement if such individual currently holds one of the following
professional designations:
(3)(c)(i) Certified
Financial Planner (CFP) awarded by the Certified Financial Planner Board of
Standards, Inc.;
(3)(c)(ii)
Chartered Financial Consultant (ChFC) awarded by the American College, Bryn
Mawr, Pennsylvania;
(3)(c)(iii)
Personal Financial Specialist (PFS) awarded by the American Institute of
Certified Public Accountants;
(3)(c)(iv) Chartered Financial Analyst (CFA)
awarded by the Institute of Chartered Financial Analysts;
(3)(c)(v) Chartered Investment Counselor
(CIC) awarded by the Investment Counsel Association of America, Inc.;
or
(3)(c)(vi) Such other
professional designation as the Division may recognize by order.
(D) Electronic Filing
(1) The Division designates
and authorizes the web-based CRD to receive and store filings and collect
related fees on behalf of the Division whenever this rule requires filings to
be submitted to the CRD.
(2) The
Division designates and authorizes the web-based IARD to receive and store
filings and collect related fees on behalf of the Division whenever this rule
requires filings to be submitted to the IARD.
(3) Unless otherwise provided, all
broker-dealer, agent, investment adviser, and investment adviser representative
applications, amendments, reports, notices, related filings and fees required
to be filed with the Division pursuant to this rule, shall be filed
electronically with and transmitted to either the CRD or the IARD as designated
in this rule. The following additional conditions relate to such electronic
filings:
(3)(a) When a signature or
signatures are required by the particular instruction of any filing to be made
through the CRD or the IARD, a duly authorized officer of the applicant or the
applicant him or herself, as required, shall affix his or her electronic
signature to the filing by typing his or her name in the appropriate fields and
submitting the filing to the CRD or the IARD. Submission of a filing in this
manner shall constitute irrefutable evidence of legal signature by any
individuals whose names are typed on the filing.
(3)(b) Solely for purposes of a filing made
through the CRD or the IARD, a document is considered filed with the Division
when all fees are received and the filing is accepted by the CRD or the IARD on
behalf of the state.
(4)
Notwithstanding Subparagraph (D)(3), the electronic filing of any particular
document shall not be required until such time as the CRD or the IARD provides
for receipt of such filings. Any documents required to be filed with the
Division, the CRD or the IARD that are not permitted to be filed with or cannot
be accepted by the CRD or the IARD shall be filed directly with the Division in
either a paper format or as an attachment to an email to the Division in a
format that can be viewed by the Division.
(5) This Subparagraph provides two "hardship
exemptions" from the requirements to make electronic filings as required by
this rule.
(5)(a) Temporary Hardship
Exemption.
(5)(a)(i) Investment advisers
licensed or required to be licensed 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.
(5)(a)(ii) To
request a temporary hardship exemption, the investment adviser must:
(5)(a)(ii)(aa) File Form ADV-H in paper
format with the state securities agency where the investment adviser's
principal place of business is located, no later than one business day after
the filing that is the subject of the Form ADV-H was due; and
(5)(a)(ii)(bb) Submit the filing that is the
subject of the Form ADV-H in electronic format to the IARD no later than seven
business days after the filing was due.
(5)(a)(iii) The temporary hardship exemption
will be deemed effective upon receipt by the Division of the complete Form
ADV-H. Multiple temporary hardship exemption requests within the same calendar
year may be disallowed by the Division.
(5)(b) Continuing Hardship Exemption.
(5)(b)(i) A continuing hardship exemption
will be granted only if the investment adviser is able to demonstrate that the
electronic filing requirements of this rule are prohibitively
burdensome.
(5)(b)(ii) To apply for
a continuing hardship exemption, the investment adviser must:
(5)(b)(ii)(aa) File Form ADV-H in paper
format with the Division at least twenty business days before a filing is due;
and
(5)(b)(ii)(bb) If a filing is
due to more than one state securities agency, the Form ADV-H must be filed with
the state securities agency where the investment adviser's principal place of
business is located. The state securities agency who receives the application
will grant or deny the application within ten business days after the filing of
Form ADV-H.
(5)(b)(iii)
The exemption is effective upon approval by the Division. The time period of
the exemption may be no longer than one year after the date on which the Form
ADV-H is filed. If the Division approves the application, the investment
adviser must, no later than five business days after the exemption approval
date, submit filings to the Division in paper format along with the appropriate
processing fees for the period of time for which the exemption is
granted.
(5)(c) The
decision to grant or deny a request for a hardship exemption will be made by
the state securities agency where the investment adviser's principal place of
business is located, which decision will be followed by the state securities
agency in the other state(s) where the investment adviser is
licensed.
(E) Correcting amendments
(1) At a time when a
material change occurs:
(1)(a) a
broker-dealer must promptly file amendments to SEC Form BD - Uniform
Application for Broker- Dealer Registration with the CRD;
(1)(b) a broker-dealer agent must promptly
file amendments to FINRA Form U-4 - Uniform Application for Securities Industry
Registration or Transfer with the CRD;
(1)(c) an issuer-agent must promptly file
amendments to FINRA Form U-4 - Uniform Application for Securities Industry
Registration or Transfer with the Division;
(1)(d) an investment adviser must promptly
file amendments to SEC Form ADV - Uniform Application for Investment Adviser
Registration with the IARD;
(1)(e)
an investment adviser representative must promptly file amendments to FINRA
Form U-4 - Uniform Application for Securities Industry Registration or Transfer
with the CRD; and
(1)(f) a federal
covered adviser must promptly file amendments to SEC Form ADV - Uniform
Application for Investment Adviser Registration with the IARD.
(2) Amendments should be filed in
accordance with the instructions on the respective forms.
(F) Service of process
(1) The requirement in Subsection
61-1-4(1)
that requires filing a consent to service of process may be fulfilled by
execution of SEC Form BD, FINRA Form U-4, or SEC Form ADV, as
applicable.
(G) License transfer
(1) A broker-dealer or broker-dealer
agent may transfer a license by following CRD procedures. The Division
recognizes and participates in the NASAA/CRD Temporary Agent Transfer ("TAT")
program and will honor transfers effected through TAT procedures.
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