(a) It is unlawful for any person to transact business from, in, or into this state as a broker-dealer or agent unless such person is registered as a broker-dealer or agent under this part, except that:

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Terms Used In Tennessee Code 48-1-109

  • Agent: means any individual, other than a broker-dealer, who represents a broker-dealer in effecting or attempting to effect purchases or sales of securities from, in, or into this state. See Tennessee Code 48-1-102
  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Broker-dealer: means any person engaged in the business of effecting transactions in securities for the account of others, or any person engaged in the business of buying or selling securities issued by one (1) or more other persons for such person's own account and as part of a regular business rather than in connection with such person's investment activities. See Tennessee Code 48-1-102
  • Business: includes every trade, occupation, profession, investment activity and other lawful purpose for gain or the preservation of assets whether or not carried on for profits. See Tennessee Code 48-202-101
  • Canadian retirement account: means a trust or other arrangement, including, but not limited to, a "registered retirement savings plan" or "registered retirement income fund" administered under Canadian law, that is managed by the natural person who contributes to, or is or will be entitled to receive the income and assets from such account. See Tennessee Code 48-1-102
  • Commissioner: means the commissioner of commerce and insurance. See Tennessee Code 48-1-102
  • Designated adult: means :
    (A) An individual sixty-five (65) years of age or older. See Tennessee Code 48-1-102
  • Gift: A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.
  • Individual: includes the estate of an incompetent or deceased individual. See Tennessee Code 48-11-201
  • Investment adviser: includes a financial planner or other person who, as an integral component of other financially related services, provides investment advice to others for compensation as part of a business or who holds oneself out as providing investment advice to others for compensation. See Tennessee Code 48-1-102
  • Investment adviser representative: means any partner, officer, or director of (or person occupying a similar status or performing similar functions) an investment adviser, or other individual, except clerical or ministerial personnel, who is employed by or associated with an investment adviser and does any of the following:
    (i) Makes any recommendation or otherwise renders advice regarding securities. See Tennessee Code 48-1-102
  • 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.
  • Member: means a person reflected in the required records of an LLC as the owner of some governance rights of a membership interest of the LLC. See Tennessee Code 48-202-101
  • Membership: means the rights and obligations a member has pursuant to a corporation's charter, bylaws and chapters 51-68 of this title. See Tennessee Code 48-51-201
  • Person: means a natural person, a sole proprietorship, a corporation, a partnership, an association, a limited liability company, a joint-stock company, a trust, a governmental entity or agency, or any other unincorporated organization. See Tennessee Code 48-1-102
  • Representative: means a governor, manager, employee or other agent of a foreign LLC. See Tennessee Code 48-202-101
  • Service of process: The service of writs or summonses to the appropriate party.
  • State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
  • United States: includes district, authority, bureau, commission, department, and any other agency of the United States. See Tennessee Code 48-11-201
  • Year: means a calendar year, unless otherwise expressed. See Tennessee Code 1-3-105
(1) A bank shall be exempt from registration as a broker-dealer to the extent its activities are excepted under either the definition of “broker” in § 3(a)(4)(B) of the Securities Exchange Act of 1934 (15 U.S.C. § 78c(a)(4)(B)), or the definition of “dealer” in § 3(a)(5)(C) of the Securities Exchange Act of 1934 (15 U.S.C. § 78c(a)(5)(C));
(2) A person who limits such person’s activity as a broker-dealer to acting solely as a broker-dealer with regard to charitable gift annuities, as that term is defined by § 56-52-102, shall be exempt from registration as a broker-dealer;
(3) A person who limits such person’s activity as an agent to acting solely as an agent on behalf of a person who is eligible for the exemption from broker-dealer registration in subdivision (a)(2) shall be exempt from registration as an agent.
(b) It is unlawful for any broker-dealer to employ an agent to transact business as an agent unless the agent is registered under this part. The registration of an agent is not effective during any period when the agent is not associated with a particular broker-dealer registered under this part. When an agent begins or terminates a connection with a broker-dealer, or begins or terminates those activities which make such person an agent, both the agent and the broker-dealer shall promptly notify the commissioner.
(c) It is unlawful for any person to transact business from, in, or into this state as an investment adviser or investment adviser representative unless:

(1) The person is registered as an investment adviser or investment adviser representative under this part;
(2) The person is required to register as an investment adviser pursuant to § 203 of the Investment Advisers Act of 1940 (15 U.S.C. § 80b-3); provided, however, that an initial notice filing, consisting of any documents filed with the securities and exchange commission, a consent to service of process, and a nonrefundable fee of one hundred dollars ($100) shall be filed with the commissioner or the commissioner’s designee, with payment of any reasonable costs charged by the designee for processing such filings, ten (10) days prior to the person acting as an investment adviser; and a renewal notice filing containing such information as the commissioner by rule requires and a nonrefundable fee of one hundred dollars ($100) shall be filed with the commissioner or the commissioner’s designee, with payment of any reasonable costs charged by the designee for processing such filing for each successive year in which such person acts as such investment adviser; every notice filing of an investment adviser expires annually, unless timely renewed, on December 31 of each year; or
(3) The person’s only clients in this state are insurance companies.
(d)

(1) Every registration of a broker-dealer or investment adviser expires annually, unless timely renewed, on December 31 of each year.
(2) Every registration of an agent or investment adviser representative expires annually, unless timely renewed, on December 31 of each year.
(3) Every notice filing of an investment adviser expires annually, unless timely renewed, on December 31 of each year.
(4) A registration or notice filing is timely renewed if the renewal application, all required exhibits, and fees are on file with the commissioner by December 31 of each year.
(e) The commissioner may, after notice and an opportunity for a hearing under the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, impose a civil penalty against any person found to be in violation of this section, or any rule or order adopted or issued under this section, in an amount not to exceed ten thousand dollars ($10,000) per violation, or in an amount not to exceed twenty thousand dollars ($20,000) per violation if an individual who is a designated adult is a victim.
(f) It is unlawful for any investment adviser to employ an investment adviser representative unless the investment adviser representative is registered under this part. The registration of an investment adviser representative is not effective during any period when the investment adviser representative is not associated with a particular investment adviser. When an investment adviser representative begins or terminates a connection with an investment adviser, or begins or terminates those activities which make that person an investment adviser representative, both the investment adviser representative and the investment adviser shall promptly notify the commissioner.
(g) Notwithstanding subsection (a), a Canadian broker-dealer that is resident in Canada and has no office or other physical presence in the United States and is not an office of, branch of, or a natural person associated with, a broker-dealer otherwise registered in the United States may transact business in this state without registering with the commissioner of commerce and insurance as a broker-dealer under the following conditions:

(1) The business transacted in this state by the Canadian broker-dealer must be limited to the effecting of or attempt to effect transactions in securities:

(A) With or for a natural person who regularly resides in Canada and who is temporarily present in this state and with whom the Canadian broker-dealer had a bona fide customer relationship before the natural person entered the United States; or
(B) With or for a natural person who is a resident of this state, or is temporarily present in this state, and who contributes to, or is or will be entitled to receive the income and assets from, a Canadian retirement account;
(2) The Canadian broker-dealer files the following with the commissioner of commerce and insurance:

(A) An annual notice in the form prescribed by the commissioner of commerce and insurance;
(B) A consent to service of process; and
(C) An annual fee of two hundred dollars ($200);
(3) The Canadian broker-dealer is a member of a self-regulatory organization or stock exchange in Canada;
(4) The Canadian broker-dealer maintains its provincial or territorial registration and its membership in a self-regulatory organization or stock exchange in good standing;
(5) The Canadian broker-dealer discloses to its customers in this state that the Canadian broker-dealer is not subject to the full regulatory requirements of this part; and
(6) The Canadian broker-dealer is not in violation of § 48-1-121 and all rules promulgated thereunder.
(h) Notwithstanding subsection (a), a Canadian agent representing a Canadian broker-dealer transacting business in this state pursuant to this section need not register with the commissioner of commerce and insurance as an agent; provided, that such agent is registered in good standing in the appropriate Canadian jurisdiction.
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