New Hampshire Revised Statutes 421-B:4-406 – Registration by Broker-Dealer, Agent, Investment Adviser, and Investment Adviser Representative
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(a) Application for initial registration. A person shall register as a broker-dealer, agent, investment adviser, or investment adviser representative by filing an application on a form prescribed by the secretary of state and a consent to service of process complying with N.H. Rev. Stat. § 421-B:6-611, paying the fee specified in N.H. Rev. Stat. § 421-B:4-410 and paying any reasonable fees charged by the designee of the secretary of state for processing the filing. The application must contain:
(1) whatever information the secretary of state requires concerning such matters as, but not limited to, the applicant’s form and place of organization; the applicant’s proposed method of doing business; the qualifications and business history of the applicant; in the case of a broker-dealer or investment adviser, the qualifications and business history of any partner, officer, or director, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling the broker-dealer or investment adviser; any injunction or administrative order or conviction of a misdemeanor involving a security or any aspect of the securities business and any conviction of a felony; and the applicant’s financial condition and history; and
(2) upon request by the secretary of state, any other financial or other information or record that the secretary of state determines is appropriate.
(b) Amendment. If the information or record contained in an application filed under subsection (a) is or becomes inaccurate or incomplete in a material respect, the registrant shall promptly file a correcting amendment.
(c) Effectiveness of registration.
(1) If an order is not in effect and a proceeding is not pending under N.H. Rev. Stat. § 421-B:4-412, registration becomes effective at noon on the 30th day after a completed application is filed. An order issued under this chapter may set an earlier effective date or may defer the effective date until noon on the 30th day after the filing of any amendment completing the application. Registration may be suspended by an order of the secretary of state, subject to article 6.
(2) The secretary of state may issue a limited registration as determined by the secretary of state to a broker-dealer whose registration is similarly restricted by FINRA or any successor self-regulatory organization.
(3) As an alternative means of registration under subsection (h) or in conjunction with this section, the secretary of state may register agents, broker-dealers, or investment advisers by means of or through the facilities of a national organization which facilitates registration on a nationwide basis.
(d) Registration renewal. A registration is effective until midnight on December 31 of the year for which the application for registration is filed. Unless an order is in effect under N.H. Rev. Stat. § 421-B:4-412, a registration may be automatically renewed each year by filing such records within 60 days after the close of its fiscal year (subject to any extension by order promulgated by the secretary of state) as are required by order issued under this chapter, by paying the fee specified in N.H. Rev. Stat. § 421-B:4-410, and by paying costs charged by the secretary of state for processing the filings. In addition, the secretary of state may require at any reasonable time and in any reasonable manner from any person subject to this chapter or any person controlling any such person any statements, reports, financial statements, answers to questionnaires and other information in whatever reasonable form he or she designates, including information from any electronic data processing or storage system.
(e) Certain requirements for broker-dealers.
(1) No person shall be registered as a broker-dealer unless one person occupying a supervisory position has successfully passed a principal examination appropriate for the business conducted by the broker-dealer and has actively engaged in the securities business as a licensed principal in a similar supervisory capacity for a minimum of 3 of the preceding 5 years.
(2) No person shall be issued a broker-dealer license if any control person of such person was an officer, supervisor, or owner of 10 percent or more of the securities of any firm liquidated under the Securities Investor Protection Act of 1970.
(f) Certain requirements for investment advisers.
(1) Registration of investment advisers and investment adviser representatives shall be made through filings through the IARD.
(2) In addition to the filing required in subsection (f)(1), an applicant for registration as an investment adviser shall provide:
(A) specimens of investment advisory contracts.
(B) the qualifications and business history of any employee, which may be submitted on a Form U-4 on the CRD.
(3) Solely for purposes of a filing made through the IARD, a document is considered filed with the secretary of state when all fees are received and the filing is accepted by the IARD on behalf of the state.
(4)(A) Any documents or fees required to be filed with the secretary of state that are not permitted to be filed with or cannot be accepted by the IARD shall be filed directly with the secretary of state. The application shall not be complete until all documents and fees required by this chapter have been submitted through the IARD, where possible, or submitted to and received directly by the secretary of state.
(B) The following documents shall be required to be filed directly with the secretary of state:
(i) A financial statement which shall be audited, or, in the instance where no audited financial statement is in existence, certified by the appropriate person as presenting fairly in all material respects the financial condition of the firm.
(ii) A copy of the applicant’s articles of incorporation, if a corporation, or other business formation documents, if the applicant is any other form of business entity.
(5)(A) An investment adviser shall file with the IARD, in accordance with the instructions to Form ADV, any amendments to the investment adviser’s Form ADV. An amendment shall be considered to be filed promptly if the amendment is filed within 30 days of the event that requires the filing of the amendment.
(B) An investment adviser representative is under a continuing obligation to update information required by Form U-4 as changes occur. An investment adviser representative and the investment adviser shall file promptly with the IARD any amendments to the representative’s Form U-4.
(C) Within 90 days of the end of the investment adviser’s fiscal year, an investment adviser shall file an updated Form ADV with the IARD.
(g) Training standards. The secretary of state may by order prescribe standards of qualification with respect to training, experience, and knowledge of the securities business and provide for examinations to be taken by any class of or all applicants for broker-dealers, agents, investment advisers, and investment adviser representatives.
(h) Additional conditions or waivers. An order issued under this chapter may impose such other conditions, consistent with the National Securities Markets Improvement Act of 1996, on any registration under this section. An order issued under this chapter may waive, in whole or in part, specific requirements in connection with registration as are in the public interest and for the protection of investors.
(i) Privilege from defamation. In the absence of malice, no communication required by the secretary of state under this section shall subject the person making it to an action for defamation.
(j) False filings. Any director, officer, partner, manager, agent, or employee of any broker-dealer, investment adviser, or agent who makes or files in any statement or other document with the secretary of state, having actual knowledge that the same includes any material statement which is false, shall be guilty of a misdemeanor if a natural person or guilty of a felony if any other person.
(k) Incorporation of federal, SRO and exchange rules. Persons registered under this article to conduct securities business shall comply with the applicable rules of the Securities and Exchange Commission, FINRA, any national exchange on which they have securities registered and other applicable self-regulatory organization having jurisdiction over the person so registered.
(l) Satisfaction through Adviser Act filings. The secretary of state may require an investment adviser to furnish or disseminate to investors and advisory clients information specified by order of the secretary of state in the public interest and for the protection of investors. If so determined by the secretary of state, information furnished to clients or prospective clients that would be in compliance with the Investment Advisers Act of 1940 may be used in whole or partial satisfaction of such requirement.
(m) The secretary of state may deem abandoned and withdrawn any application for registration made pursuant to this chapter if any applicant fails to respond in writing within 90 days to a written request from the secretary of state requesting a response.
(1) whatever information the secretary of state requires concerning such matters as, but not limited to, the applicant’s form and place of organization; the applicant’s proposed method of doing business; the qualifications and business history of the applicant; in the case of a broker-dealer or investment adviser, the qualifications and business history of any partner, officer, or director, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling the broker-dealer or investment adviser; any injunction or administrative order or conviction of a misdemeanor involving a security or any aspect of the securities business and any conviction of a felony; and the applicant’s financial condition and history; and
Terms Used In New Hampshire Revised Statutes 421-B:4-406
- Agent: means an individual, other than a broker-dealer, who represents a broker-dealer in effecting or attempting to effect purchases or sales of securities or represents an issuer in effecting or attempting to effect purchases or sales of the issuer's securities. See New Hampshire Revised Statutes 421-B:1-102
- Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
- Broker-dealer: means a person engaged in the business of effecting transactions in securities for the account of others or for the person's own account. See New Hampshire Revised Statutes 421-B:1-102
- Conviction: A judgement of guilt against a criminal defendant.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- CRD: means the Central Registration Depository maintained by FINRA. See New Hampshire Revised Statutes 421-B:1-102
- Filing: means the receipt under this chapter of a record by the secretary of state. See New Hampshire Revised Statutes 421-B:1-102
- FINRA: means the Financial Industry Regulatory Authority. See New Hampshire Revised Statutes 421-B:1-102
- Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
- following: when used by way of reference to any section of these laws, shall mean the section next preceding or following that in which such reference is made, unless some other is expressly designated. See New Hampshire Revised Statutes 21:13
- IARD: means the Investment Adviser Registration Depository maintained by FINRA. See New Hampshire Revised Statutes 421-B:1-102
- including: shall be construed as introducing a non-exhaustive list. See New Hampshire Revised Statutes 421-B:1-102
- Injunction: An order of the court prohibiting (or compelling) the performance of a specific act to prevent irreparable damage or injury.
- Investment adviser: means a person that, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or the advisability of investing in, purchasing, or selling securities or that, for compensation and as a part of a regular business, issues or promulgates analyses or reports concerning securities. See New Hampshire Revised Statutes 421-B:1-102
- Investment adviser representative: means an individual employed by or associated with an investment adviser or federal covered investment adviser and who makes any recommendations or otherwise gives investment advice regarding securities, manages accounts or portfolios of clients, determines which recommendation or advice regarding securities should be given, provides investment advice or holds herself or himself out as providing investment advice, receives compensation to solicit, offer, or negotiate for the sale of or for selling investment advice, or supervises employees who perform any of the foregoing. See New Hampshire Revised Statutes 421-B:1-102
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Order: means an order issued pursuant to this chapter. See New Hampshire Revised Statutes 421-B:1-102
- Person: means an individual; corporation; business trust; estate; trust; partnership; limited liability company; association; joint venture; government; governmental subdivision, agency, or instrumentality; public corporation; or any other legal or commercial entity. See New Hampshire Revised Statutes 421-B:1-102
- Secretary of state: means the New Hampshire secretary of state or his or her designee. See New Hampshire Revised Statutes 421-B:1-102
- Security: means a note; stock; treasury stock; security future; bond; debenture; evidence of indebtedness; certificate of interest or participation in a profit-sharing agreement; membership interest in a limited liability company; partnership interest in a limited partnership; partnership interest in a registered limited liability partnership; collateral trust certificate; preorganization certificate or subscription; transferable share; investment contract; investment metal contract or investment gem contract; voting trust certificate; certificate of deposit for a security; fractional undivided interest in oil, gas, or other mineral rights; put, call, straddle, option, or privilege on a security, certificate of deposit, or group or index of securities, including an interest therein or based on the value thereof; put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency; or, in general, an interest or instrument commonly known as a "security"; or a certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing. See New Hampshire Revised Statutes 421-B:1-102
- Self-regulatory organization: means a national securities exchange registered under the Securities Exchange Act of 1934, a national securities association of broker-dealers registered under the Securities Exchange Act of 1934, a clearing agency registered under the Securities Exchange Act of 1934, or the Municipal Securities Rulemaking Board established under the Securities Exchange Act of 1934. See New Hampshire Revised Statutes 421-B:1-102
- Service of process: The service of writs or summonses to the appropriate party.
- State: means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States. See New Hampshire Revised Statutes 421-B:1-102
(2) upon request by the secretary of state, any other financial or other information or record that the secretary of state determines is appropriate.
(b) Amendment. If the information or record contained in an application filed under subsection (a) is or becomes inaccurate or incomplete in a material respect, the registrant shall promptly file a correcting amendment.
(c) Effectiveness of registration.
(1) If an order is not in effect and a proceeding is not pending under N.H. Rev. Stat. § 421-B:4-412, registration becomes effective at noon on the 30th day after a completed application is filed. An order issued under this chapter may set an earlier effective date or may defer the effective date until noon on the 30th day after the filing of any amendment completing the application. Registration may be suspended by an order of the secretary of state, subject to article 6.
(2) The secretary of state may issue a limited registration as determined by the secretary of state to a broker-dealer whose registration is similarly restricted by FINRA or any successor self-regulatory organization.
(3) As an alternative means of registration under subsection (h) or in conjunction with this section, the secretary of state may register agents, broker-dealers, or investment advisers by means of or through the facilities of a national organization which facilitates registration on a nationwide basis.
(d) Registration renewal. A registration is effective until midnight on December 31 of the year for which the application for registration is filed. Unless an order is in effect under N.H. Rev. Stat. § 421-B:4-412, a registration may be automatically renewed each year by filing such records within 60 days after the close of its fiscal year (subject to any extension by order promulgated by the secretary of state) as are required by order issued under this chapter, by paying the fee specified in N.H. Rev. Stat. § 421-B:4-410, and by paying costs charged by the secretary of state for processing the filings. In addition, the secretary of state may require at any reasonable time and in any reasonable manner from any person subject to this chapter or any person controlling any such person any statements, reports, financial statements, answers to questionnaires and other information in whatever reasonable form he or she designates, including information from any electronic data processing or storage system.
(e) Certain requirements for broker-dealers.
(1) No person shall be registered as a broker-dealer unless one person occupying a supervisory position has successfully passed a principal examination appropriate for the business conducted by the broker-dealer and has actively engaged in the securities business as a licensed principal in a similar supervisory capacity for a minimum of 3 of the preceding 5 years.
(2) No person shall be issued a broker-dealer license if any control person of such person was an officer, supervisor, or owner of 10 percent or more of the securities of any firm liquidated under the Securities Investor Protection Act of 1970.
(f) Certain requirements for investment advisers.
(1) Registration of investment advisers and investment adviser representatives shall be made through filings through the IARD.
(2) In addition to the filing required in subsection (f)(1), an applicant for registration as an investment adviser shall provide:
(A) specimens of investment advisory contracts.
(B) the qualifications and business history of any employee, which may be submitted on a Form U-4 on the CRD.
(3) Solely for purposes of a filing made through the IARD, a document is considered filed with the secretary of state when all fees are received and the filing is accepted by the IARD on behalf of the state.
(4)(A) Any documents or fees required to be filed with the secretary of state that are not permitted to be filed with or cannot be accepted by the IARD shall be filed directly with the secretary of state. The application shall not be complete until all documents and fees required by this chapter have been submitted through the IARD, where possible, or submitted to and received directly by the secretary of state.
(B) The following documents shall be required to be filed directly with the secretary of state:
(i) A financial statement which shall be audited, or, in the instance where no audited financial statement is in existence, certified by the appropriate person as presenting fairly in all material respects the financial condition of the firm.
(ii) A copy of the applicant’s articles of incorporation, if a corporation, or other business formation documents, if the applicant is any other form of business entity.
(5)(A) An investment adviser shall file with the IARD, in accordance with the instructions to Form ADV, any amendments to the investment adviser’s Form ADV. An amendment shall be considered to be filed promptly if the amendment is filed within 30 days of the event that requires the filing of the amendment.
(B) An investment adviser representative is under a continuing obligation to update information required by Form U-4 as changes occur. An investment adviser representative and the investment adviser shall file promptly with the IARD any amendments to the representative’s Form U-4.
(C) Within 90 days of the end of the investment adviser’s fiscal year, an investment adviser shall file an updated Form ADV with the IARD.
(g) Training standards. The secretary of state may by order prescribe standards of qualification with respect to training, experience, and knowledge of the securities business and provide for examinations to be taken by any class of or all applicants for broker-dealers, agents, investment advisers, and investment adviser representatives.
(h) Additional conditions or waivers. An order issued under this chapter may impose such other conditions, consistent with the National Securities Markets Improvement Act of 1996, on any registration under this section. An order issued under this chapter may waive, in whole or in part, specific requirements in connection with registration as are in the public interest and for the protection of investors.
(i) Privilege from defamation. In the absence of malice, no communication required by the secretary of state under this section shall subject the person making it to an action for defamation.
(j) False filings. Any director, officer, partner, manager, agent, or employee of any broker-dealer, investment adviser, or agent who makes or files in any statement or other document with the secretary of state, having actual knowledge that the same includes any material statement which is false, shall be guilty of a misdemeanor if a natural person or guilty of a felony if any other person.
(k) Incorporation of federal, SRO and exchange rules. Persons registered under this article to conduct securities business shall comply with the applicable rules of the Securities and Exchange Commission, FINRA, any national exchange on which they have securities registered and other applicable self-regulatory organization having jurisdiction over the person so registered.
(l) Satisfaction through Adviser Act filings. The secretary of state may require an investment adviser to furnish or disseminate to investors and advisory clients information specified by order of the secretary of state in the public interest and for the protection of investors. If so determined by the secretary of state, information furnished to clients or prospective clients that would be in compliance with the Investment Advisers Act of 1940 may be used in whole or partial satisfaction of such requirement.
(m) The secretary of state may deem abandoned and withdrawn any application for registration made pursuant to this chapter if any applicant fails to respond in writing within 90 days to a written request from the secretary of state requesting a response.