Broker-Dealer Registration:
Where to File
Before opening for business, a broker-dealer has to comply with a number of requirements. This topic briefly explains the steps that are required to register as a broker-dealer. For more information, read our publication, Guide to Broker-Dealer Registration.
Register with the SEC
To register with the SEC, you must file Form BD through the Central Registration Depository, operated by
FINRA. The only exception is for banks registering as municipal securities dealers, which file Form MSD directly with the SEC. The SEC does not charge a filing fee. Applicants that reside outside the U.S. must appoint the SEC as agent for service of process. The SEC will return an application if it is incomplete.
Within 45 days of an applicant filing a completed application, the SEC must either grant registration or begin proceedings to determine whether it should deny registration. Broker-dealers must also promptly update Form BD by filing amendments whenever the information becomes inaccurate or incomplete for any reason.
Become a Member of a Self-Regulatory Organization
In addition to registering with the SEC, a broker-dealer applicant must become a member of at least one self-regulatory organization (SRO)
- the Financial Industry Regulatory Authority (FINRA), a national securities exchange, or both. SROs may charge a fee and, unlike the SEC, do not have to act within 45 days. "Associated persons" of broker-dealers, including their salespeople, must register with an SRO and satisfy applicable qualification requirements.
Comply With Any State Requirements
Each state where the broker-dealer wants to operate may have its own registration requirements. Timeframes for registration with individual states may differ from the SEC and SRO timeframes. You can visit the website of the North American Securities Administrators Association, Inc. for a list of your state securities regulators so you can contact them to find out their requirements.
Become a Member of the Securities Investor Protection Corporation
In most cases, broker-dealers must also be members of the Securities Investor Protection Corporation (SIPC), a non-profit entity that assists investors when their brokerage firms go bankrupt or otherwise fail. Registered broker-dealers automatically become SIPC members unless and exclusion applies. Broker-dealers must pay an annual assessment fee to SIPC in order to remain a SIPC member and continue to do business legally as a broker-dealer.
http://www.sec.gov/answers/brkrdlr.htm
|
