69W-600.001: Application for Registration as a Dealer, Issuer/Dealer, or Investment Adviser
69W-600.0015: Canadian Dealer Notification
69W-600.002: Application for Registration as Associated Person
69W-600.004: Registration of Issuer/Dealers, Principals and Branch Offices
69W-600.005: Examinations/Qualifications
69W-600.006: Associated Persons' Fingerprints
69W-600.007: Changes in Name and Successor Registration Requirements
69W-600.008: Termination of Registration as Dealer, Investment Adviser, Branch Office, Principal or Agent
69W-600.009: Registration Renewals
69W-600.0091: Central Registration Depository System
69W-600.0092: Investment Adviser Registration Depository for Federal Covered Advisers
69W-600.0093: Investment Adviser Registration Depository for Investment Advisers
69W-600.010: Notice of Civil, Criminal or Administrative Action
69W-600.012: Rules of Conduct
69W-600.013: Prohibited Business Practices for Dealers and Their Associated Persons
69W-600.0131: Prohibited Business Practices for Investment Advisers and Their Associated Persons
69W-600.0132: Custody Requirements for Investment Advisers
69W-600.014: Books and Records Requirements
69W-600.015: Financial Reporting Requirements - Statement of Financial Condition - Dealers and Investment Advisers
69W-600.016: Net Capital Requirements for Dealers and Investment Advisers
69W-600.017: Customer Protection Rule - Reserve Requirements and Custody of Customer Funds and Securities
69W-600.020: Continuing Education Requirements
PURPOSE AND EFFECT: The rules are amended to reflect the latest versions of materials incorporated by reference in the rules, including federal regulations, federal statutes, forms, Financial Industry Regulatory Authority (FINRA) rules, New York Stock Exchange rules, other stock exchange rules, National Association of Securities Dealers (NASD) rules, and Municipal Securities Rulemaking Board (MSRB) rules. The rules are amended to reflect the changes that are being proposed to Rule 69W-301.002, F.A.C., which is the general rule governing the application submission process. Currently, the process for filing applications and fees with the Office is spread throughout Rule Chapters 69W-600, 69W-700, 69W-800 and 69W-900, F.A.C. For clarity, the provisions specifying the process for filing the applications and fees with the Office are relocated to Rule 69W-301.002, F.A.C. This rule is also amended to require the electronic filing of certain applications, documents and fees that are currently accepted by the Office in paper form. The rules are also amended to replace references to the National Association of Securities Dealers (NASD) with the Financial Industry Regulatory Authority (FINRA). FINRA was created in July 2007 through the consolidation of NASD and the member regulation, enforcement and arbitration functions of the New York Stock Exchange. Rule 69W-600.005, F.A.C., is amended to remove the reference to the examination requirement for investment adviser principals as there is no longer a principal investment adviser designation. Rule 69W-600.006, F.A.C., is amended to reflect the statutory requirement for fingerprint submissions for any direct owner, principal, or indirect owner that is required to be reported on the Form BD, Uniform Broker-Dealer Registration, or Form ADV, Uniform Application for Investment Adviser Registration, under Section 517.12(7), F.S. Rule 69W-600.0132, F.A.C., is amended to allow investment advisers under certain conditions to file unaudited financial statements with the Office in lieu the requirement for audited financial statements.
SUMMARY: The rules are amended to: 1) reflect the latest versions of materials incorporated by reference in the rules; 2) reflect the changes to the application filing process that are being proposed to Rule 69W-301.002, F.A.C.; 3) replace references to the National Association of Securities Dealers with the Financial Industry Regulatory Authority; 4) remove the reference to the examination requirement for investment adviser principals; 5) reflect the statutory requirement for fingerprint submissions for any direct owner, principal, or indirect owner that is required to be reported on the Form BD, Uniform Broker-Dealer Registration, or Form ADV, Uniform Application for Investment Adviser Registration, under Section 517.12(7), F.S.; and 6) allow investment advisers under certain conditions to file unaudited financial statements with the Office in lieu the requirement for audited financial statements.
SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS: No Statement of Estimated Regulatory Cost has been prepared. The Office has determined that the rules will not have an adverse impact on small businesses.
Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.
SPECIFIC AUTHORITY: 517.03(1), 517.12(6), 517.12(9), 517.12(13), 517.12(15), 517.12(17), 517.1201, 517.121(1), 517.121(2), 517.1215, 517.1217, 215.405 FS.
LAW IMPLEMENTED: 517.081, 517.12, 517.12(4), 517.12(5), 517.12(6), 517.12(7), 517.1205, 517.12(8), 517.12(9), 517.12 (10), 943.053, 517.12(11), 517.12(12), 517.12(12)(b), 517.12(13), 517.12(15), 517.12(16), 517.12(18), 517.161, 517.161(1), 517.161(5), 517.1201(1), 517.1201(2), 517.121, 517.121(1), 517.121(2), 517.1215, 517.1217, 517.301(1) FS.
IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE SCHEDULED AND ANNOUNCED IN FAW.
THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Bill Reilly, Chief, Bureau of Securities Regulation, Division of Securities, Office of Financial Regulation, 200 East Gaines Street, Tallahassee, FL 32399, phone (850)410-9805, E-mail: Bill.Reilly@flofr.com
THE FULL TEXT OF THE PROPOSED RULE IS:
69W-600.001 Application for Registration as a Dealer, Issuer/Dealer, or Investment Adviser.
(1)(a) Applications for initial and renewal registration of dealers, issuer/dealers, and investment advisers shall be filed as on the forms prescribed by the Financial Services Commission in Rule subsection 69W-301.002(7), F.A.C., and shall include all information required by such forms, any other information the Financial Services Commission or Office of Financial Regulation may require, and payment of the statutory fees required by Sections 517.12(10) and 517.131, F.S. Except as otherwise provided in Rule 69W-600.0091 or 69W-600.0093, F.A.C., the Office of Financial Regulation shall deem an application to be received at such time as it and the appropriate fee have been date stamped by the cashier’s office of the Department of Financial Services. For dealers that are members of the National Association of Securities Dealers (NASD), such application shall be filed with the Office of Financial Regulation through the Central Registration Depository (CRD) of the NASD in accordance with Rule 69W-600.0091, F.A.C. For investment advisers, such application shall be filed with the Office of Financial Regulation through the Investment Adviser Registration Depository (IARD) of the NASD in accordance with Rule 69W-600.0093, F.A.C.
(b) A complete application must include the following exhibits or forms that are appropriate for the type of registration requested:
1. For registration as a dealer or issuer/dealer, a Uniform Application for Broker-Dealer Registration, Form BD, which is incorporated by reference in subsection 69W-301.002(7), F.A.C. For dealers that are members of the NASD, such application shall be filed with the Office of Financial Regulation through the CRD in accordance with Rule 69W-600.0091, F.A.C. For registration as an investment adviser, a Uniform Application for Investment Adviser Registration, Form ADV, which is incorporated by reference in subsection 69W-301.002(7), F.A.C. shall be filed with the Office of Financial Regulation. Such application shall be filed with the Office of Financial Regulation through the Investment Adviser Registration Depository (IARD) of the NASD in accordance with Rule 69W-600.0093, F.A.C.;
2. No change.
3. A Uniform Application for Securities Industry Registration or Transfer, Form U-4, which is incorporated by reference in subsection 69W-301.002(7), F.A.C., to register at least one principal as set forth in Rule 69W-600.002, F.A.C. For any dealer that is a member of the NASD, or any investment adviser, the application for registration of any principal shall be filed through the CRD as set forth in Rule 69W-600.002, F.A.C. In conjunction with filing its Form BD or Form ADV with the Office of Financial Regulation, the dealer, issuer/dealer, or investment adviser shall provide the Office of Financial Regulation written notification of the principal’s name, CRD number, and social security number;
4. No change.
5. Proof of effective registration for dealers with the Securities and Exchange Commission (SEC). Where required by Section 517.12(16), F.S., applicants for registration as a dealer shall also provide the Office of Financial Regulation with proof of insurance coverage by the Securities Investor Protection Corporation. Evidence of current membership as a dealer with the FINRA NASD shall satisfy this requirement;
6. No change.
7. Applicants for registration as an issuer/dealer must file Issuer/Dealer Compliance Form (OFR-DA-5-91), which is incorporated by reference in subsection 69W-301.002(7), F.A.C., (Revised 1-91) to meet requirements under paragraphs 69W-600.004(1)(b), 69W-600.005(2)(d) and Rule 69W-400.002, F.A.C.;
8. through 9 No change.
(2) If the information contained in any application for registration as a dealer or investment adviser or in any amendment thereto, becomes inaccurate for any reason, the dealer or investment adviser shall file an amendment on the Form BD or the Form ADV, respectively, correcting such information within 30 days. For applicants and registrants that are members of the FINRA NASD, each such amendment, including those required by Rule 69W-600.007, F.A.C., shall be filed with the Office of Financial Regulation through the CRD system. For investment adviser applicants and registrants who file via the IARD, each such amendment, including those required by Rule 69W-600.007, F.A.C., may be filed with the Office of Financial Regulation through the IARD system in accordance with Rule 69W-600.0093, F.A.C. All other applicants and registrants shall file such amendments, including those required by Rule 69W-600.007, F.A.C., directly with the Office of Financial Regulation electronically through the Regulatory Enforcement and Licensing System.
(3) No change.
Rulemaking Specific Authority 517.03(1), 517.12(6) FS. Law Implemented 517.12(6), (7), 517.1205 FS. History–New 12-5-79, Amended 9-20-82, Formerly 3E-600.01, Amended 7-29-90, 8-1-91, 6-16-92, 1-11-93, 11-14-93, 4-30-96, 6-22-98, 5-10-00, 9-19-00, 7-31-02, Formerly 3E-600.001, Amended 3-16-06, 5-15-07, _________.
69W-600.0015 Canadian Dealer Notification.
All Canadian dealers making initial and renewal notice filing, or terminating a notice filing in this state shall file OFR Form CAN, Canadian Dealer Notification, which is incorporated by reference in subsection 69W-301.002(7), F.A.C., and shall include all information required by such form, any other information the Office of Financial Regulation may require, and the fee required by Section 517.12(17)(b), F.S., with the Office of Financial Regulation. Such forms and fees shall be filed electronically in accordance with Rule 69W-301.002, F.A.C. Any notice filing made by a Canadian dealer with the Office of Financial Regulation shall be deemed received by the Office of Financial Regulation at such time as OFR Form CAN and the fee have been date stamped by the cashier’s office of the Department of Financial Services. When requested by the Office of Financial Regulation, OFR Form CAN and all responses to any other requests for additional information shall be filed directly with the Office of Financial Regulation. OFR Form CAN, Canadian Dealer Notification, is incorporated by reference in subsection 69W-301.002(7), F.A.C.
Rulemaking Specific Authority 517.03 FS. Law Implemented 517.12 FS. History–New 5-15-07, Amended_________.
69W-600.002 Application for Registration as Associated Person.
(1)(a) Applications for initial, reaffiliation, and renewal registrations of a principal or associated person shall be filed on Form U-4, Uniform Application for Securities Industry Registration or Transfer, which is incorporated by reference in subsection 69W-301.002(7), F.A.C., and shall include all information required by such form, any other information the Office of Financial Regulation may require, and payment of the statutory fees required by Section 517.12(10), F.S. Such forms and fees shall be filed electronically in accordance with Rule 69W-301.002, F.A.C. Except as otherwise provided in Rule 69W-600.0091, 69W-600.0092, or 69W-600.0093, F.A.C., the Office of Financial Regulation shall deem an application to be received at such time as it and the appropriate fee have been date-stamped by the cashier’s office of the Department of Financial Services. For dealers that are members of the National Association of Securities Dealers (“NASD”), such application shall be filed with the Office of Financial Regulation through the Central Registration Depository (“CRD”) of the NASD in accordance with Rule 69W-600.0091, F.A.C. For federal covered advisers, such application shall be filed with the Office of Financial Regulation through the Central Registration Depository (“CRD”) of the NASD in accordance with Rule 69W-600.0092, F.A.C. For investment adviser applicants and registrants who file via the IARD, such application shall be filed with the Office of Financial Regulation through the CRD of the NASD in accordance with Rule 69W-600.0093, F.A.C.
(b) A complete initial application must include the following exhibits or forms that are appropriate for the type of registration requested:
1. Form U-4. As used on the Form U-4, the term “Office of Employment Address” shall mean the location where the person seeking registration will regularly conduct business on behalf of the dealer or investment adviser. For dealers that are members of the NASD, such application shall be filed with the Office of Financial Regulation through the CRD of the NASD. Form U-4, Uniform Application for Securities Industry Registration or Transfer, is incorporated by reference in subsection 69W-301.002(7), F.A.C.
2. through 3. No change.
4. Evidence of examinations/qualifications set forth in Rule subsection 69W-600.005(2), F.A.C.
5. A complete Florida Fingerprint Card (FL921250Z) when required under Section 517.12(7), F.S., and Rule 69W-600.006, F.A.C., provided by the Office of Financial Regulation and taken by an authorized law enforcement agency and accompanied by a non-refundable $43.25 processing fee. Form FL921250Z, Florida Fingerprint Card, is incorporated by reference in subsection 69W-301.002(7), F.A.C.
(c) If the information contained in any Form U-4 becomes inaccurate for any reason before or after the associated person becomes registered, the associated person through the dealer or investment adviser, as applicable, shall be responsible for correcting the inaccurate information within thirty (30) days. If the information being updated relates to the applicant’s or registrant’s disciplinary history, in addition to updating the Form U-4, the associated person through the dealer or investment adviser shall also provide the Office of Financial Regulation with notice and copies of each civil, criminal or administrative action initiated against the associated person as provided in Rule 69W-600.010, F.A.C. For associated persons who have filed by using the CRD of the FINRA NASD, such amendments shall be made through the CRD system of the NASD. All other applicants and registrants shall file such amendments electronically with the Office of Financial Regulation through the Regulatory Enforcement and Licensing System. Form U-4, Uniform Application for Securities Industry Registration or Transfer, is incorporated by reference in subsection 69W-301.002(7), F.A.C.
(2) No change.
Rulemaking Specific Authority 215.405, 517.03(1), 517.12(6) FS. Law Implemented 517.12(6), (7), (10), 517.1205, 943.053 FS. History–New 9-20-82, Formerly 3E-301.02, Amended 10-15-86, 10-4-88, 6-24-90, 7-29-90, 10-14-90, 8-1-91, 6-16-92, 6-28-93, 11-14-93, 3-13-94, 4-30-96, 12-29-96, 6-22-98, 5-10-00, 9-19-00, 7-31-02, 12-11-03, Formerly 3E-600.002, Amended 3-16-06, 5-15-07, 12-24-07, 12-25-08,_________.
69W-600.004 Registration of Issuer/Dealers, Principals and Branch Offices.
(1) through (2) No change.
(3)(a) Every branch office of a registered Florida dealer or investment adviser shall be registered with the Office of Financial Regulation prior to engaging in business therefrom. Such registration shall consist of an application filed with the Office of Financial Regulation on the forms prescribed by the Office of Financial Regulation and payment of the statutory fees required by Section 517.12(10), F.S. Such forms and fees shall be filed electronically in accordance with Rule 69W-301.002, F.A.C. The Office of Financial Regulation shall deem an application to be received at such time as it and the appropriate fee have been date stamped by the cashier’s office of the Department of Financial Services. Such office may or may not be designated as an Office of Supervisory Jurisdiction (OSJ) at the discretion of the registrant. A manager for each branch office shall be designated and registered with the Office of Financial Regulation as a principal. For such offices not designated as an OSJ, the branch office manager need not be located at the office(s) for which he is delegated supervisory responsibility; however, in such cases, the registrant must specify in writing to the Office of Financial Regulation, the names of the associated persons designated as resident agent in charge as well as the branch office manager. For any dealer that is a member of the NASD, or any investment adviser, the application for registration of any branch office shall be filed with the Office of Financial Regulation through the CRD.
(b) No change.
(c) If the information contained in any branch office registration form becomes inaccurate or incomplete for any reason before or after the branch office becomes registered, including changing the location of the branch office or the supervisory personnel thereof, the dealer or investment adviser shall amend the information by filing a complete and originally executed Form BR, with the Office of Financial Regulation within thirty (30) days of the change and denoting thereon that the information reported is an amendment to a previous filing. For any dealer that is a member of the FINRA NASD, or any investment adviser, the Form BR shall be filed with the Office of Financial Regulation through the CRD, as set forth in Rules 69W-301.002, 69W-600.0091 and 69W-600.0093, F.A.C this rule. Issuer/Dealers and Dealers that are not members of FINRA A non-NASD member registrant may amend the branch office registration information by submitting a Form BR directly with the Office of Financial Regulation electronically through the Regulatory Enforcement and Licensing System, in accordance with Rule 69W-301.002, F.A.C. Form BR, Uniform Branch Office Registration Form, is incorporated by reference in subsection 69W-301.002(7), F.A.C. Failure to file any amendment or written notification, as provided herein, shall be considered a violation of Section 517.12(13), F.S.
(d) No change.
Rulemaking Specific Authority 517.03(1), 517.12(6) FS. Law Implemented 517.12(5), (6), (10) FS. History–New 12-5-79, Amended 9-20-82, Formerly 3E-600.04, Amended 10-14-90, 6-16-92, 1-11-93, 11-7-93, 11-14-93, 12-29-96, 10-20-97, 6-10-99, 8-19-99, 5-27-01, 7-31-02, Formerly 3E-600.004, Amended 3-16-06, 5-15-07,_________.
69W-600.005 Examinations/Qualifications.
(1) through (2) No change.
(3) Examination Requirements for Investment Adviser Representative and Principal: An individual applying to be registered as an investment adviser or investment adviser representative shall provide the Office of Financial Regulation with proof of passing, within two years of the date of application for registration, one of the following examinations: 1. the Uniform Investment Adviser Law Examination (Series 65) or 2. the General Securities Representative Examination (Series 7) and the Uniform Combined State Law Examination (Series 66).
(4) No change.
(5) The examination requirement for investment adviser principals, investment adviser representatives, and associated persons of issuer dealers shall not apply to an individual who currently holds one of the following professional designations: 1. Certified Financial Planner (TM) or CFP® awarded by the Certified Financial Planner Board of Standards, Inc.; 2. Chartered Financial Consultant (ChFC) awarded by the American College, Bryn Mawr, PA; 3. Personal Financial Specialist (PFS) awarded by the American Institute of Certified Public Accountants; 4. Chartered Financial Analyst (CFA) awarded by the Institute of Chartered Financial Analysts; 5. Chartered Investment Counselor (CIC) awarded by the Investment Counsel Association of America, Inc.
Rulemaking Specific Authority 517.03(1) FS. Law Implemented 517.12(8) FS. History–New 12-5-79, Amended 9-20-82, Formerly 3E-600.05, Amended 8-1-91, 1-11-93, 4-18-96, 4-2-00, 10-30-03, Formerly 3E-600.005, Amended_________.
69W-600.006 Associated Persons’ Fingerprints Requirements.
(1) Fingerprints filed in accordance with Section 517.12(7), F.S., shall be on fingerprint cards supplied by the Office of Financial Regulation taken by an authorized law enforcement agency, and accompanied by a non-refundable $43.25 processing fee. Form FL921250Z, Florida Fingerprint Card, is incorporated by reference in subsection 69W-301.002(7), F.A.C.
(2) The fingerprint card requirement to file a fingerprint card and fee with the Office of Financial Regulation is waived for those associated persons pending requesting registration in Florida with a Financial Industry Regulatory Authority (FINRA) member firm and such fingerprint card has with a dealer which is registered with a national securities exchange or national securities association or the Securities and Exchange Commission, provided that fingerprints have been submitted and processed by FINRA on behalf of the member firm with which said associated person is pending registration, for such persons pursuant to the provisions of SEC rule 17f-2 (17 C.F.R. § 240.17f-2 (2010) 2006), which is hereby incorporated by reference, by said person’s current employer.
(3) Notwithstanding any exemptions found in SEC rule 17f-2 (17 C.F.R. § 240.17f-2 (2010)), any direct owner, principal, or indirect owner that is required to be reported on Form BD, Uniform Application for Broker-Dealer Registration, or Form ADV, Uniform Application for Investment Adviser Registration, pursuant to Section 517.12(7), F.S., who is not currently registered in Florida with the firm they are seeking to join or act as a direct owner, principal, or indirect owner shall submit to the Office fingerprint cards supplied by the Office of Financial Regulation taken by an authorized law enforcement agency, and accompanied by a non-refundable $43.25 processing fee. Such fingerprint card and fee shall be filed directly with the Office until such time as FINRA has the capability to eletronically display the fingerprint card results to Florida via the CRD system. Form FL921250Z (Florida Fingerprint Card), Form BD, and Form ADV are incorporated by reference in subsection 69W-301.002(7), F.A.C.
(4) The federal regulations referenced in this rule are hereby incorporated by reference and may be obtained by mail from the Florida Office of Financial Regulation, Division of Securities, 200 E. Gaines Street, Tallahassee, Florida 32399. Copies of the Code of Federal Regulation are also available online through the U.S. Government Printing Office via GPO Access: http://www.gpoaccess.gov/cfr/index.html.
Rulemaking Specific Authority 215.405, 517.03 FS. Law Implemented 517.12(7), 943.053 FS. History–New 12-5-79, Amended 9-20-82, Formerly 3E-600.06, Amended 8-1-91, Formerly 3E-600.006, Amended 5-15-07, 12-24-07, 12-25-08,_________.
69W-600.007 Changes in Name and Successor Registration Requirements.
(1) Where only a change in the name of an applicant or registrant as dealer, investment adviser or associated person occurs, notices of such fact shall be filed as an amendment on the forms prescribed by the Office of Financial Regulation within thirty (30) calendar days of the date of such change. For registrants who are a member of the Financial Industry Regulatory Authority (FINRA) NASD, such amendment shall be filed with the Office of Financial Regulation through the CRD System pursuant to subsection 69W-600.001(2), F.A.C. Any amendments to organizational documents or accompanying letters of explanation shall be promptly submitted directly to the Office of Financial Regulation when specifically requested by the Office of Financial Regulation.
(2) Where there is a change in legal entity of a proprietary, partnership, or corporate registrant, the successor entity shall file with the Office of Financial Regulation an amendment to Form BD, Uniform Application for Broker-Dealer Registration, which is incorporated by reference in subsection 69W-301.002(7), F.A.C. or Form ADV, Uniform Application for Investment Adviser Registration, which is incorporated by reference in subsection 69W-301.002(7), F.A.C., within thirty (30) calendar days of the date of such change. For registrants who are a member of the FINRA NASD, such amendment shall be filed with the Office of Financial Regulation through the CRD System pursuant to subsection 69W-600.001(2), F.A.C. Any amendments to organizational documents, accompanying letters of explanation, or current financial statements of the successor shall be promptly submitted directly to the Office of Financial Regulation when specifically requested by the Office of Financial Regulation.
(3) Merger Situations: Where there is a merger of dealer or investment adviser registrants involving (a) the assumption by the successor of substantially all assets and liabilities of the merged entities, and (b) the continuation of the activities of the merged entities successor entity, the merging entities shall file notification with the Office of Financial Regulation denoting such changes as are applicable within thirty (30) calendar days prior to the date of such change. The successor entity shall file an amendment to Form BD, which is incorporated by reference in subsection 69W-301.002(7), F.A.C., or Form ADV, which is incorporated by reference in subsection 69W-301.002(7), F.A.C. denoting such changes as are applicable within thirty (30) calendar days of date of such change. For registrants who are a member of the FINRA NASD, each such amendment shall be filed with the Office of Financial Regulation through the CRD System pursuant to subsection 69W-600.001(2), F.A.C. A copy of the plan of merger/merger agreement, amended organizational documents, accompanying letters of explanation, or current financial statements of the successor (merged) entity shall be promptly provided directly to the Office of Financial Regulation when specifically requested by the Office of Financial Regulation.
(4) through (6) No change.
Rulemaking Specific Authority 517.03(1), 517.12(13) FS. Law Implemented 517.12(13) FS. History–New 12-5-79, Amended 9-20-82, Formerly 3E-600.07(4), Amended 10-15-86, 12-8-87, 8-1-91, 6-16-92, 1-11-93, 6-22-98, 8-9-98, 6-10-99, 5-10-00, 7-31-02, Formerly 3E-600.007, Amended 3-16-06,_________.
C.f. See Rule 69W-301.002(7) for forms referenced herein which have been previously adopted by the Office of Financial Regulation.
69W-600.008 Termination of Registration as Dealer, Investment Adviser, Branch Office, Principal or Agent.
(1) Where a registrant withdraws, cancels, or otherwise terminates registration, or is terminated for any reason, notice of such fact shall be filed with the Office of Financial Regulation on the forms prescribed by the Financial Services Commission, in accordance with Rule 69W-301.002(7), F.A.C., within twenty (20) calendar days of the date of termination. Such forms shall be filed electronically in accordance with Rules 69W-301.002, 69W-600.0091, 69W-600.0092 and 69W-600.0093, F.A.C.
(2) Any dealer which is a member of the Financial Industry Regulatory Authority (FINRA) National Association of Securities Dealers (“NASD”) or any associated person or branch office of a member firm shall file any withdrawals, cancellations, or terminations of registrations with the Office of Financial Regulation through the Central Registration Depository (“CRD”) of the FINRA NASD.
(3) Any investment adviser shall file any withdrawals, cancellations, or terminations of registration with the Office of Financial Regulation through the Investment Adviser Registration Depository (“IARD”) of the FINRA. Any associated person or branch office of an investment adviser shall file any withdrawals, cancellations, or terminations of registration with the Office of Financial Regulation through the Central Registration Depository of the FINRA. Any withdrawals, cancellations, or terminations of registrations for branch offices shall be filed directly with the Office of Financial Regulation as prescribed in paragraph 69W-600.004(3)(c), F.A.C.
(4) through (5) No change.
(6) The forms to be utilized for providing notice to the Office of Financial Regulation under subsections (1), (2) and (3) above, and which are incorporated by reference in subsection 69W-301.002(7), F.A.C., are:
(a) Notice of Withdrawal from Registration as Investment Adviser (Form ADV-W).
(b) Uniform Request for Broker Dealer Withdrawal (Form BDW).
(c) Uniform Branch Office Registration Form (Form BR).
(d) Uniform Termination Notice for Securities Industry Registration (Form U-5).
Rulemaking Specific Authority 517.03(1) FS. Law Implemented 517.12(12)(b), 517.161(5) FS. History–New 12-5-79, Amended 9-20-82, Formerly 3E-600.08, Amended 7-29-90, 8-1-91, 6-16-92, 1-11-93, 6-22-98, 6-10-99, 5-10-00, 5-27-01, Formerly 3E-600.008, Amended 3-16-06,_________.
69W-600.009 Registration Renewals.
(1) No change.
(2) In addition to verifying registration with the Office of Financial Regulation as provided in subsection (1), to renew its registration and that of its branch offices and associated persons, each dealer or investment adviser shall pay all renewal fees as required by Section 517.12(11), F.S.
(a) Renewal fees for FINRA NASD member firms, associated persons of FINRA NASD member firms, and branch offices of FINRA NASD member firms, shall be submitted through the CRD by December 31 of the year the registration expires.
(b) No change.
(c) Renewal fees for non-FINRA non-NASD member firms, associated persons of non-FINRA non-NASD member firms and all branch offices of non-FINRA non-NASD member firms shall be filed electronically on the Office’s website at www.flofr.com through the Regulatory Enforcement and Licensing (REAL) System of the OFR and shall be deemed received on the date the Office issues a confirmation of submission and payment to the applicant via the Office’s website sent directly to the Office of Financial Regulation. A confirmation of submission is issued by the Office upon successful filing of a renewal and payment of all fees. The Office of Financial Regulation shall deem a fee received as payment at such time as it has been date stamped by the cashier’s office of the Department of Financial Services. All renewal fees must be received by the Office of Financial Regulation by December 31 of the year the registration expires.
(3) For FINRA members, federal covered advisers and investment advisers, failure Failure to submit the requisite amount of fees as provided for in subsection (2) of this rule by December 31 of the year of expiration of the registration shall result in such registration not being renewed. If December 31 falls on a Saturday, Sunday or legal holiday pursuant to Section 110.117, F.S., the renewals received on the next business day will be considered timely received. However, an expired registration may be reinstated in accordance with the provisions of Section 517.12(11), F.S., provided that all requisite information and fees are date stamped by the cashier’s office of the Department of Financial Services on or before January 31 of the year following the year of expiration. Failure to submit the requisite amount of fees necessary to reinstate registration by January 31 of the year following the year of expiration shall result in such registration not being reinstated. If January 31 falls on a Saturday, Sunday, or legal holiday pursuant to Section 110.117, F.S., the reinstatement received on the next business day will be considered timely received. In the event that the renewal or reinstatement is withdrawn or not granted, any fees filed to renew or reinstate registration shall become the revenue of the state pursuant to Section 517.12(10), F.S., and shall not be returnable.
(4) For issuer/dealers, Canadian dealers, and dealers that are not members of FINRA, failure to submit the requisite amount of fees as provided for in subsection (2) of this rule by December 31 of the year of expiration of the registration shall result in such registration not being renewed. If December 31 falls on a Saturday, Sunday or legal holiday pursuant to Section 110.117, F.S., the renewals received on the next business day will be considered timely received. However, an expired registration may be reinstated in accordance with Section 517.12(11), F.S., provided that all requisite information and fees are filed electronically on the Office’s website at www.flofr.com through the Regulatory Enforcement and Licensing (REAL) System of the OFR on or before January 31 of the year following the year of expiration. Failure to submit the requisite amount of fees necessary to reinstate registration by January 31 of the year following the year of expiration shall result in such registration not being reinstated. If January 31 falls on a Saturday, Sunday, or legal holiday pursuant to Section 110.117, F.S., the reinstatement received on the next business day will be considered timely received. If the renewal or reinstatement is withdrawn or not granted, any fees filed to renew or reinstate registration shall become the revenue of the state pursuant to Section 517.12(10), F.S., and shall not be returnable.
Rulemaking Specific Authority 517.03(1), 517.12(6), (15) FS. Law Implemented 517.12(6), (10), (11), (15) FS. History–New 12-5-79, Amended 9-20-82, 8-29-83, Formerly 3E-600.09, Amended 1-7-88, 6-16-92, 11-14-93, 2-5-01, 5-27-01, Formerly 3E-600.009, Amended 5-15-07,_________.
69W-600.0091 Central Registration Depository System.
(1) All FINRA NASD member dealers requesting initial registration, amendment or termination of registration in this state shall file the appropriate Form BD or BDW, which are incorporated by reference in subsection 69W-301.002(7), F.A.C., and the assessment fee required by Section 517.12(10) or (11), F.S., with the Central Registration Depository System (“CRD”) of the FINRA NASD. However, responses to requests by the Office of Financial Regulation for additional information shall be filed directly with the Office of Financial Regulation. Any application for registration as a dealer filed with the Office of Financial Regulation through the CRD shall be deemed received by the Office of Financial Regulation upon receipt of the Form BD and the application fee. The application fee shall be deemed received by the Office of Financial Regulation on the “payment date” reflected on the CRD “disbursement detail” report.
(2) All FINRA NASD member dealers registered in this state requesting initial registration, amendment, or termination of a branch office of such member dealer shall file the appropriate Form BR and the application fee required by Section 517.12(10) or (11), F.S., with the CRD. However, responses to requests by the Office of Financial Regulation for additional information shall be filed directly with the Office of Financial Regulation. Any application for registration as a branch office filed with the Office of Financial Regulation through the CRD shall be deemed received by the Office of Financial Regulation upon receipt of the Form BR and the application fee. The application fee shall be deemed received by the Office of Financial Regulation on the “payment date” reflected on the CRD “disbursement detail” report.
(3) All FINRA NASD member dealers registered in this state requesting initial registration, amendment, reaffiliation or termination of an associated person of such member dealer shall file Form U-4 or U-5, which are incorporated by reference in subsection 69W-301.002(7), F.A.C., and the assessment fee required by Section 517.12(10) or (11), F.S., with the CRD of the FINRA NASD. However, responses to requests by the Office of Financial Regulation for additional information shall be filed directly with the Office of Financial Regulation. Any application for registration as an associated person of an FINRA NASD member dealer filed with the Office of Financial Regulation through the CRD shall be deemed received by the Office of Financial Regulation on the date designated in the “Status Date” field on the line notated “FL” with a “Registration Status” of “pending” as indicated on the CRD “Registrations with Current Employers” screen.
Rulemaking Specific Authority 517.03, 517.12(15) FS. Law Implemented 517.12(10), (11), (15) FS. History–New 8-29-83, Formerly 3E-600.091, Amended 8-1-91, 6-16-92, 4-30-96, 9-19-00, Formerly 3E-600.0091, Amended 5-15-07,_________.
69W-600.0092 Investment Adviser Registration Depository for Federal Covered Advisers.
(1) All federal covered advisers making, amending, or terminating a notice filing in this state shall file Form ADV, Part 1, or Form ADV-W and the assessment fee required by Section 517.1201(1) or (2), F.S., with the Investment Adviser Registration Depository (IARD) of the FINRA in accordance with subsection 69W-301.002(2), F.A.C NASD. When requested by the Office of Financial Regulation, Form ADV, Part 2, and all responses to requests by the Office of Financial Regulation for additional information shall be filed directly with the Office of Financial Regulation. Any notice filing made by a federal covered adviser with the Office of Financial Regulation through the IARD shall be deemed received by the Office of Financial Regulation upon receipt of the Form ADV and the filing fee. The filing fee shall be deemed received by the Office of Financial Regulation on the “payment date” reflected on the CRD “disbursement detail” report. Forms ADV and ADV-W are incorporated by reference in subsection 69W-301.002(7), F.A.C.
(2) All federal covered advisers who notice file in this state and who request initial registration, amendment, reaffiliation or termination of an associated person of such federal covered adviser shall file the Form U-4 or Form U-5, and the assessment fee required by Section 517.12(10) or (11), F.S. with the CRD of the FINRA in accordance with Rule 69W-301.002(2), F.A.C. NASD. However, responses to requests by the Office of Financial Regulation for additional information shall be filed directly with the Office of Financial Regulation. Forms U-4 and U-5 are incorporated by reference in subsection 69W-301.002(7), F.A.C.
Rulemaking Specific Authority 517.03, 517.12(6), (15), 517.1201 FS. Law Implemented 517.1201(1), (2), (15) FS. History–New 7-31-02, Formerly 3E-600.0092, Amended 3-16-06, 5-15-07,_________.
69W-600.0093 Investment Adviser Registration Depository for Investment Advisers.
(1) All investment advisers requesting initial registration, amendment, or termination of registration in this state shall file the Form ADV, Part 1 and 2, or ADV-W and the assessment fee required by Section 517.12(10) or (11), F.S., with the Investment Adviser Registration Depository (IARD) of the FINRA in accordance with subsection 69W-301.002(2), F.A.C NASD. Form ADV, Part 2, and a All responses to requests by the Office of Financial Regulation for additional information shall be filed directly with the Office of Financial Regulation. Investment advisers shall file Form ADV, Part 2 with the IARD at such time as the IARD develops the capability to process the form. Applications for registration as an investment adviser filed with the Office of Financial Regulation through the IARD shall be deemed received by the Office of Financial Regulation upon receipt of the Form ADV and the filing fee. The filing fee shall be deemed received by the Office of Financial Regulation on the “payment date” reflected on the CRD “disbursement detail” report. Forms ADV and ADV-W are incorporated by reference in subsection 69W-301.002(7), F.A.C.
(2) All investment advisers registered in this state through the IARD requesting initial registration, amendment, or termination of a branch of such investment adviser shall file Form BR and the assessment fee required by Section 517.12(10) or (11), F.S., with the CRD of the FINRA in accordance with subsection 69W-301.002(2), F.A.C NASD. However, all responses to requests by the Office of Financial Regulation for additional information shall be filed directly with the Office of Financial Regulation. Applications for registration as a branch office filed with the Office of Financial Regulation through the CRD shall be deemed received by the Office of Financial Regulation upon receipt of the Form BR and the application fee. The application fee shall be deemed received by the Office of Financial Regulation on the “payment date” reflected on the CRD “disbursement detail” report. Form BR is incorporated by reference in subsection 69W-301.002(7), F.A.C.
(3) All investment advisers registered in this state through the IARD requesting initial registration, amendment, reaffiliation or termination of an associated person of such investment adviser may file Form U-4 or Form U-5 and the assessment fee required by Section 517.12(10) or (11), F.S., with the CRD of the FINRA in accordance with subsection 69W-301.002(2), F.A.C NASD. However, all responses to requests by the Office of Financial Regulation for additional information shall be filed directly with the Office of Financial Regulation. Forms U-4 and U-5 are incorporated by reference in subsection 69W-301.002(7), F.A.C.
(4) All investment advisers currently registered with the Office of Financial Regulation shall transition their Florida registrations onto IARD of the NASD, and the Florida registrations of their associated persons onto the CRD of the NASD, by June 30, 2007. All investment advisers who transition onto IARD of the NASD shall file a complete Form ADV through the IARD of the NASD within 30 days after the transition date. All associated persons who transition onto the CRD of the NASD shall file a complete Form U-4 through the CRD of the NASD within 30 days after the transition date. Form U-4 and Form ADV are incorporated by reference in subsection 69W-301.002(7), F.A.C.
Rulemaking Specific Authority 517.03, 517.12(6), (15) FS. Law Implemented 517.12(10), (11), (15) FS. History–New 7-31-02, Formerly 3E-600.0093, Amended 3-16-06, 5-15-07,_________.
69W-600.010 Notice of Civil, Criminal or Administrative Action.
(1) through (2) No change.
(3) Any applicant or registrant in this state who is a member of the Financial Industry Regulatory Authority (FINRA) (formerly known as the National Association of Securities Dealers, Inc.) (“NASD”) shall file such notifications with the Office of Financial Regulation through the Central Registration Depository (“CRD”) of the FINRA NASD in accordance with Rule 69W-600.0091, F.A.C. However, responses to requests by the Office of Financial Regulation for additional information shall be filed directly with the Office of Financial Regulation.
(4) Any applicant or registrant in this state who is a federal covered adviser or investment adviser shall file such notifications with the Office of Financial Regulation through the Investment Adviser Registration Depository (IARD) of the FINRA in accordance with Rules 69W-600.0092 and 69W-600.0093, F.A.C. However, responses to requests by the Office of Financial Regulation for additional information shall be filed directly with the Office of Financial Regulation.
Rulemaking Specific Authority 517.03 FS. Law Implemented 517.12(6), (12), 517.161 FS. History–New 12-5-79, Amended 9-20-82, Formerly 3E-600.10, Amended 9-19-00, Formerly 3E-600.010, Amended_________.
69W-600.012 Rules of Conduct.
(1) Confirmation of Transactions: Every dealer registered in this state, including those defined as issuer/dealers under Rule 69W-200.001, F.A.C., shall give or send to the customer a written confirmation at or before completion of each transaction. Such confirmation shall set forth at least the following:
(a) through (c) No change.
(d) Compliance with SEC Rule 10b-10 (17 CFR § 240.10b-10 (2010)) and the confirmation, preparation and disclosure requirements of SEC Rule 17a-3 (17 CFR § 240.17a-3 (2010)) or MSRB Rules G-8 and G-15, as those rules existed on June 23, 2010 July 1, 2003, shall be deemed compliance with this rule.
(2) through (4) No change.
(5) It shall be unlawful and a violation of Section 517.301(1), F.S., for any dealer or associated person to engage in any “device, scheme, or artifice to defraud” which shall include selling or effecting the purchase of any security into, in, or from offices in this state in violation of: sections 9, 10, 11A or 15(c) of the Securities Exchange Act of 1934 or of SEC Rules 9b-1, 10b-1 et seq., 11Aa3-1, 15c1-1 et seq., or 15c2-1 et seq. (17 CFR 240.9b-1; 17 CFR 240.10b-1 et seq.; 17 CFR 240.11Aa3-1; 17 CFR 240.15c1-1 et seq.; or 17 CFR 240.15c2-1 et seq., respectively), as such provisions existed on July 1, 2003; or section 15(g) of the Securities Exchange Act of 1934 or of SEC Rules 15g-1, et seq. (17 CFR 240.15g-1 et seq.) as such provisions existed on July 1, 2003; or Regulation M (17 CFR 242.100-.105) as such provisions existed on July 1, 2003.
(a) Sections 9, 10, 11A, 15(c) or 15(g) of the Securities Exchange Act of 1934 (15 U.S.C. §§ 78i, 78j, 78k-1, 78o(c) or 78o(g) (2006 & Supp. III));
(b) SEC Rules 9b-1 (17 CFR § 240.9b-1(2010));
(c) SEC Rules10b-1 through 10b-21 (17 CFR §§ 240.10b-1 through 240.10b-21 (2010));
(d) SEC Rules 15c1-1 through 15c1-9 (17 CFR §§ 240.15c1-1 through 240.15c1-9 (2010));
(e) SEC Rules 15c2-1 through 15c2-12 (17 CFR §§ 240.15c2-1 through 240.15c2-12 (2010));
(f) SEC Rules 15g-1 through 15g-9 (17 CFR §§ 240.15g-1 through 240.15g-9 (2010);
(g) Regulation M (17 CFR 242.100 through 242.105 (2010)); or
(h) SEC Rule 601 (17 C.F.R. § 242.601 (2010)).
(6) All federal statutes, federal regulations, and Municipal Securities Rulemaking Board (MSRB) rules referenced in this rule are incorporated by reference and may be obtained by mail from the Florida Office of Financial Regulation, Division of Securities, 200 E. Gaines Street, Tallahassee, Florida 32399. Copies of the United States Code are also available online through the U.S. House of Representatives, Office of the Law Revision Counsel: http://uscode.house.gov/download/downloadPDF.shtml. Copies of the Code of Federal Regulation are available online through the U.S. Government Printing Office via GPO Access: http://www.gpoaccess.gov/cfr/index.html.
Rulemaking Specific Authority 517.03(1) FS. Law Implemented 517.121, 517.301(1) FS. History–New 12-5-79, Amended 9-20-82, Formerly 3E-600.12, Amended 12-25-89, 10-14-90, 8-1-91, 6-16-92, 1-11-93, 4-11-94, 1-3-99, 8-19-99, 10-30-03, Formerly 3E-600.012, Amended_________.
69W-600.013 Prohibited Business Practices for Dealers and Their Associated Persons.
(1) The following are deemed demonstrations of unworthiness by a dealer under Section 517.161(1)(h), F.S., without limiting that term to the practices specified herein:
(a) Extending, arranging for, or participating in arranging for credit to a customer in violation of Regulation T, Credit by Brokers and Dealers, (12 C.F.R. §§ 220.1-220.132 (2010 2006)), which is incorporated by reference.
(b) Executing any transaction in a margin account without obtaining from its customer a written margin agreement prior to settlement date for the initial transaction in the account.
(c) Failing to segregate customers’ free securities or securities in safekeeping.
(d) Hypothecating a customer’s securities in violation of SEC Rule 8c-1, (17 C.F.R. § 240.8c-1 (2010 2006)), which is incorporated by reference.
(e) Failing to execute a customer’s order.
(f) Executing orders for the purchase by a customer of securities not registered under Section 517.081 or 517.082, F.S., unless the securities are exempted under Section 517.051, F.S., or the transaction is exempted under Section 517.061, F.S.
(g) Representing itself as a financial or investment planner, consultant, or advisers, when the representation does not fairly describe the nature of the services offered, the qualifications of the person offering the services, and the method of compensation for the services.
(h) With respect to any customer, transaction or business in this state, violating any of the following:
1. Financial Industry Regulatory Authority (FINRA) Rules 2000 through 7740, National Association of Securities Dealers (NASD) Conduct Rules 2000 through 3370, Conduct Rules, Marketplace Rules, or the Uniform Practice Code of the NASD National Association of Securities Dealers (NASD), Rules 11100 through 11900, as such rules existed on June 23, 2010. The foregoing NASD regulations, along with the interpretive materials for those regulations, are published in the NASD manual dated March 2006, which is incorporated by reference.
2. For members of the New York Stock Exchange, Rule 405, 412, or 435, or 445 of the New York Stock Exchange, as such rules and interpretative supplementary materials existed on June 23, 2010 May 31, 2006. The foregoing New York Stock Exchange rules, including the interpretative supplementary materials, are incorporated by reference.
3. Section 2, 4, 5, or 6 of the Securities Act of 1933, (15 U.S.C.A. §§ 77b, 77c, 77d, 77e, or 77f (2006 & Supp. III Thomson/West 2006 (current through P.L. 109-229)), or SEC Rules 134, 134a, 135a, 144, 144A, 156, 419, 481, or 482, (17 C.F.R. §§ 230.134, 230.134a, 230.135a, 230.144, 230.144A, 230.156, 230.419, 230.481 or 230.482 (2010 2006)). The foregoing sections of the Securities Act of 1933 and rules of the SEC are incorporated by reference.
4. Section 15(b)(4)(E) of the Securities Exchange Act of 1934, (15 U.S.C.A. § 78o(b)(4)(E) (2006 & Supp. III Thomson/West 2006 (current through P.L. 109-229)); Regulation SHO, Regulation of Short Sales, (17 C.F.R. §§ 242.200-242.203 (2010 2006)); or NASD Conduct Rule 3210, as it existed on June 23, 2010. The foregoing provisions of the Securities Exchange Act of 1934 and Regulation SHO, Regulation of Short Sales, are incorporated by reference. NASD Conduct Rule 3210, as it existed on July 3, 2006, is incorporated by reference.
5. Section 15B of the Securities Exchange Act of 1934, (15 U.S.C.A. § 78o-4 (2006 & Supp. III Thomson/West 2006 (current through P.L. 109-229)), or the following rules of the Municipal Securities Rulemaking Board (MSRB), which have been promulgated under Section 15B: MSRB Definitional Rules D-1 to D-12, inclusive, and General Rules G-1 to G-41 G-34, inclusive, as those rules existed on June 23, 2010 May 31, 2006. Section 15B of the Securities Act of 1934 and the foregoing MSRB rules, including the MSRB interpretative letters and notices construing those rules, are incorporated by reference.
6. To the extent that any of the rules described in subparagraphs 1. through 5. of this section or their interpretation by the FINRA, NASD, NYSE, MSRB, or SEC, as appropriate, conflict or are inconsistent with other provisions of the Florida Securities and Investor Protection Act or rules promulgated pursuant thereto, this paragraph of this rule shall not be deemed controlling.
(i) through (l) No change.
(m) Selling or offering for sale any security in a transaction exempt from registration pursuant to Section 517.061(17)(a)1., F.S., where the issuer of such securities has not filed with the SEC within the specified period of time all reports required by Sections 13 or 15D of the Securities Exchange Act of 1934, (15 A. §§ 78m, 78o-6 (2006 & Supp. III Thomson/West 2006 (current through P.L. 109-229)). The foregoing sections of the Securities Exchange Act of 1934 are incorporated by reference.
(n) through (o) No change.
(2) The following are deemed demonstrations of unworthiness by an associated person of a dealer under Section 517.161(1)(h), F.S., without limiting that term to the practices specified herein:
(a) Borrowing money or securities from a customer, except when persons are in compliance with FINRA NASD Conduct Rule 32402370(a)(1), (a)(2)(A)-(C) only, and FINRA NASD Conduct Rule 32402370(b)-(c), as these rules existed on June 23, 2010 which are incorporated by reference in subparagraph (1)(h)1.;
(b) Acting as a custodian for money, securities or an executed stock power of a customer;
(c) Effecting transactions in securities, or investments as defined by Section 517.301(2), F.S., not recorded on the regular books or records of the dealer, which the associated person represents, unless the transactions are disclosed to, and authorized in writing by, the dealer prior to execution of the transactions;
(d) Operating an account under a fictitious name, unless disclosed to the dealer, which the associated person represents;
(e) Sharing directly or indirectly in profits or losses in the account of any customer without the written authorization of the customer and the dealer, which the associated person represents;
(f) Dividing or otherwise splitting commissions, profits or other compensation in connection with the purchase or sale of securities in this state with any person not also licensed as an associated person for the same dealer, or for a dealer under direct or in indirect common control;
(g) Failing to furnish to each offeree of a Small Corporate Offering Registration (SCOR) a copy of the “Florida Guide to Small Business Investments”, OFR-S-13-97, revised May 1, 2004, which is incorporated by reference in subsection 69W-301.002(7), F.A.C.; and
(h) Engaging in any of the practices specified in paragraph (1)(a), (b), (e), (f), (g), (h), (i), (k), (l), (m), (n) or (o).
(3) The federal statutes, federal regulations, Financial Industry Regulatory Authority (FINRA) rules, National Association of Securities Dealers (NASD) rules, New York Stock Exchange rules, and Municipal Securities Rulemaking Board (MSRB) rules referenced in this rule are hereby incorporated by reference and All materials incorporated by reference in this rule may be obtained by mail from the Office of Financial Regulation, Bureau of Securities Regulation, 200 E. Gaines Street, Tallahassee, Florida 32399-0374. Copies of the United States Code are also available through the U.S. House of Representatives, Office of the Law Revision Counsel: http://uscode.house.gov/download/downloadPDF.shtml. Copies of the Code of Federal Regulation are available online through the U.S. Government Printing Office via GPO Access: http://www.gpoaccess.gov/cfr/index.html.
Rulemaking Specific Authority 517.03(1), 517.1217 FS. Law Implemented 517.081, 517.1217, 517.161(1) FS. History–New 12-5-79, Amended 9-20-82, Formerly 3E-600.13, Amended 8-1-91, 6-16-92, 1-11-93, 11-7-93, 5-5-94, 9-9-96, 10-20-97, 1-25-00, 10-30-03, Formerly 3E-600.013, Amended 10-23-06, 1-18-09, _________.
69W-600.0131 Prohibited Business Practices for Investment Advisers and Their Associated Persons.
(1) The following are deemed demonstrations of unworthiness by an investment adviser or an associated person of an investment adviser under Section 517.161(1)(h), F.S., without limiting that term to the practices specified herein:
(a) With respect to any customer, transaction or business in, to or from this state, engaging in any conduct prohibited by, or failing to comply with the requirements of, the following:
Sections 204, 204A, 205, 206, 207, 208 of the Investment Advisers Act of 1940, (15 U.S.C.A. §§ 80b-4, 80b-4a, 80b-5, 80b-6, 80b-7, 80b-8 (2006 & Supp. III Thomson/West 2006 (current through P.L. 109-237)), or SEC Rules 204-3, 205-1, 205-2, 205-3, 206(3)-1, 206(3)-2, 206(4)-1, 206(4)-3, and 206(4)-4, (17 C.F.R. §§ 275.204-3, 275.205-1, 275.205-2, 275.205-3, 275.206(3)-1, 275.206(3)-2, 275.206(4)-1, 275.206(4)-3, and 275.206(4)-4 (2010 2006)), promulgated under the Investment Advisers Act of 1940. The foregoing provisions of the Investment Advisers Act of 1940 and rules of the SEC are incorporated by reference.
(b) through (q) No change.
(r) Entering into, extending or renewing any investment advisory contract contrary to the provisions of Section 205 of the Investment Advisers Act of 1940, 15 U.S.C.A. § 80b-5 (2006 & Supp. III) (Thomson/West 2006 (current through P.L. 109-237)), which is incorporated by reference in paragraph (a) of this subsection. This provision shall apply to all advisers and investment adviser representatives registered or required to be registered under this Act, notwithstanding whether such adviser or representative would be exempt from federal registration pursuant to Section 203(b) of the Investment Advisers Act of 1940, (15 U.S.C.A. § 80b-3(b) (2006 & Supp. III Thomson/West 2006 (current through P.L. 109-237)), which is incorporated by reference;
(s) Including, in an advisory contract, any condition, stipulation, or provisions binding any person to waive compliance with any provision of Chapter 517, F.S., or with any provision of, or with any rule, regulation, or order issued under, the Investment Advisers Act of 1940 (15 U.S.C. § 80b-1 through 80b-21 (2006 & Supp. III)), which is incorporated by reference;
(t) Taking any action, directly or indirectly, with respect to those securities or funds in which any client has any beneficial interest, where the investment adviser has custody or possession of such securities or funds when the adviser’s action is subject to and does not comply with the requirements of Rule 69W-600.0132, F.A.C.
(u) No change.
(2) The federal statutory and regulatory provisions referenced herein shall apply to investment advisers, investment adviser representatives and federal covered advisers, to the extent permitted by the National Securities Markets Improvement Act of 1996 (Pub. L. 110-290).
(3) The federal statutes and federal regulations referenced in this rule are hereby incorporated by reference and All materials incorporated by reference in this rule may be obtained by mail from the Office of Financial Regulation, Bureau of Securities Regulation, 200 E. Gaines Street, Tallahassee, Florida 32399-0374. Copies of the United States Code are also available online through the U.S. House of Representatives, Office of the Law Revision Counsel: http://uscode.house.gov/download/downloadPDF.shtml. Copies of the Code of Federal Regulation are available online through the U.S. Government Printing Office via GPO Access: http://www.gpoaccess.gov/cfr/index.html.
Rulemaking Specific Authority 517.03(1), 517.1215 FS. Law Implemented 517.12(4), 517.1215, 517.161(1), FS. History–New 1-25-00, Amended 10-30-03, Formerly 3E-600.0131, Amended 10-23-06, 1-18-09,_________.
69W-600.0132 Custody Requirements for Investment Advisers.
(1) Definitions. For purposes of this section:
(a) through (b) No change.
(c) “Qualified custodian” means the following independent institutions or entities that are not affiliated with the adviser by any direct or indirect common control and have not had a material business relationship with the adviser in the previous two years:
1. through 2. No change.
3. A registered futures commission merchant registered under Section 4f(a) of the Commodity Exchange Act (7 U.S.C. § 6f (2006 & Supp. III)), holding the client assets in customer accounts, but only with respect to clients’ funds and security futures, or other securities incidental to transactions in contracts for the purchase or sale of a commodity for future delivery and options thereon; and
4. No change.
(2) Safekeeping required. If the investment adviser is registered or required to be registered, it is unlawful and deemed to be a fraudulent, deceptive, or manipulative act, practice or course of business for the investment adviser to have custody of client funds or securities unless:
(a) through (e) No change.
(f) Direct Fee Deduction. An adviser who has custody as defined in sub-subparagraph (1)(a)1.b. of this rule by having fees directly deducted from client accounts must also provide the following safeguards:
1. through 4. No change.
5. Waiver of Audited Financial Statements. An investment adviser having custody solely because it meets the definition of custody as defined in sub-subparagraph (1)(a)1.b. of this rule and who complies with the safekeeping requirements in paragraphs (2)(a)-(f) of this rule may file unaudited financial statements and must comply with the requirements as set forth in paragraph 69W-300.002(4)(c), F.A.C.
(g) through (h) No change.
(3) Exceptions.
(a) Shares of mutual funds. With respect to shares of an “open-end company” as defined in Section 5(a)(1) of the Investment Company Act of 1940, (15 U.S.C. § 80a-5(a)(1) (2006 & Supp. III)), (“mutual fund”), the investment adviser may use the mutual fund’s transfer agent in lieu of a qualified custodian for purposes of complying with subsection (2) of this rule;
(b) through (c) No change.
(d) Registered investment companies. The investment adviser is not required to comply with this rule with respect to the account of an investment company registered under the Investment Company Act of 1940 (15 U.S.C. § 80a-1 through 80a-64 (2006 & Supp. III)) [15 U.S.C. 80a-1 to 80a-64].
(e) through (f) No change.
(4) The federal statutes referenced in this rule are hereby incorporated by reference and All materials incorporated by reference in this rule may be obtained by mail from the Office of Financial Regulation, Bureau of Securities Regulation, 200 E. Gaines Street, Tallahassee, Florida 32399-0374. Copies of the United States Code are also available online through the U.S. House of Representatives, Office of the Law Revision Counsel: http://uscode.house.gov/download/downloadPDF.shtml.
Rulemaking Specific Authority 517.03(1), 517.1215 FS. Law Implemented 517.1215 FS. History–New 10-23-06, Amended _________.
69W-600.014 Books and Records Requirements.
Except as otherwise provided herein, every dealer, investment adviser, branch office, and associated person conducting business in this state shall prepare and maintain on a current basis, and preserve for the periods of time specified, such records, prescribed herein, as are appropriate for said dealer’s, investment adviser’s, branch office’s, or associated person’s course of business, and are sufficient to provide an audit trail of all business transactions by said dealer, investment adviser, associated person, or branch office. Associated persons who conduct business from a registered branch office in this state shall be exempt from the provisions of this rule.
(1) All dealers are required to prepare and maintain appropriate books and records relating to their business as described in either SEC Rules 17a-3 or 17a-4, (17 C.F.R. §§ 240.17a-3, 240.17a-4 (2010 2006)), or MSRB Rules G-7, G-8 and G-9, as such rules existed on June 23, 2010; and records evidencing compliance with NASD Conduct rule 3000, as such rule existed on June 23, 2010. SEC Rules 17a-3 and 17a-4 are incorporated by reference. MSRB Rules G-7, G-8, and G-9 are incorporated by reference in subparagraph 69W-600.013(1)(h)5., F.A.C. NASD Conduct Rule 3000 is incorporated by reference in subparagraph 69W-600.013(1)(h)1., F.A.C.
(2) All issuer/dealers are required to maintain at least the following records:
(a) through (b) No change.
(c) A record of all sales of securities made by, or on behalf of, the issuer as described in and in compliance with SEC Rule 17a-3(a)(1), (17 C.F.R. § 17a-3(a)(1) (2010 2006)), which is incorporated by reference in subsection (1);
(d) through (e) No change.
(3) All investment advisers, notwithstanding the fact that the investment adviser is not registered or required to be registered under the Investment Advisers Act of 1940, shall prepare and maintain true, accurate and current records relating to their business as described in SEC Rule 204-2, (17 C.F.R. § 275.204-2 (2010 2006)), which is incorporated by reference; and have available for the Office of Financial financial Regulation at least the following records:;
(a) through (c) No change.
(d) A file containing a copy of each record required by SEC Rule 204-2(11), (17 C.F.R. § 275.204-2(11) (2010 2006)), which is incorporated by reference in this subsection, including any communication by electronic media that the investment adviser circulates or distributes, directly or indirectly, to two or more persons, other than persons connected with the investment adviser.
(e) A copy of each written statement and each amendment or revision given or sent to any client or prospective client of the investment adviser in accordance with the provisions of SEC Rule 204-3, (17 C.F.R. § 275.204-3 (2010 2006)), which is incorporated by reference in paragraph 69W-600.0131(1)(a), F.A.C., and a record of the dates that each written statement, and each amendment or revision was given or offered to be given to any client or prospective client who subsequently becomes a client.
(f) For each client that was obtained by the adviser by means of a solicitor to whom a cash fee was paid by the adviser, records required by SEC Rule 206(4)-3, (17 C.F.R. § 275.206(4)-3 (2010 2006)), which is incorporated by reference in paragraph 69W-600.0131(1)(a), F.A.C.
(g) All records required by SEC Rule 204-2(16), (17 C.F.R. § 275.204-2(16) (2010 2006)), which is incorporated by reference in this subsection.
(h) through (k) No change.
(4) Notwithstanding other record preservation requirements of this rule, the following records or copies shall be required to be maintained in the business location of the investment adviser from which the customer or client is being provided or has been provided with investment advisory services:
(a) Records required to be preserved under paragraphs (a)(3), (a)(7)-(11), (a)(14)-(15), (b) and (c) inclusive, of SEC Rule 204-2 of the Investment Advisers Act of 1940, (17 C.F.R. § 275.204-2 (2010 2006)), which is incorporated by reference in subsection (3); and
(b) Records or copies required under the provision of paragraphs (a)(11) and (a)(16) of SEC Rule 204-2 of the Investment Advisers Act of 1940 (17 C.F.R. § 275.204-2 (2010)), which records or related records identify the name of the investment adviser representative providing investment advice from that business location, or which identify the business location’s physical address, mailing address, electronic mailing address, or telephone number. SEC Rule 204-2, 17 C.F.R. § 275.204-2 (2006), is incorporated by reference in subsection (3).
(5) through (6) No change.
(7) All books and records described in this rule shall be preserved in accordance with the following:
(a) Those records required under subsection (1) of this rule shall be preserved for such periods of time as specified in either SEC Rule 17a-4, (17 C.F.R. § 240.17a-4 (2010 2006)), which is incorporated by reference in subsection (1), or MSRB Rule G-9, as such rule existed on June 23, 2010, which is incorporated by reference in paragraph 69W-600.013(1)(h), F.A.C.
(b) through (d) No change.
(e) Each investment adviser registered or required to be registered in this state and which has a business location in this state shall maintain at such business location:
1. The records or copies required under the provisions of paragraphs (a)(3), (a)(7)-(10), (a)(14)-(15), (b), and (c) of SEC Rule 204-2, (17 C.F.R. § 275.204-2 (2010 2006)), which is incorporated by reference in subsection (3); and
2. The records or copies required under the provisions of paragraphs (3)(a)-(k)(j) above related to customers or clients for whom the investment adviser representative provides or has provided investment advisory services; and
3. The records or copies required under the provisions of paragraphs (a)(11) and (a)(16) of SEC Rule 204-2, (17 C.F.R. § 275.204-2 (2010 2006)), which records or related records identify the name of the investment adviser representative or which identify the business location’s physical address, mailing address, electronic mailing address, or telephone number. The records will be maintained for the period described in subsections (d) and (e) of SEC Rule 204-2, (17 C.F.R. § 275.204-2 (2010 2006)). The investment adviser shall be responsible for ensuring compliance with the provision of this subsection. SEC Rule 204-2, (17 C.F.R. § 275-204-2 (2010 2006)), is incorporated by reference in subsection (3).
(8) The federal regulations, federal statutes, and Municipal Securities Rulemaking Board (MSRB) rules referenced in this rule are hereby incorporated by reference and All materials incorporated by reference in this rule may be obtained by mail from the Office of Financial Regulation, Bureau of Securities Regulation, 200 E. Gaines Street, Tallahassee, Florida 32399-0374. Copies of the United States Code are also available online through the U.S. House of Representatives, Office of the Law Revision Counsel: http://uscode.house.gov/download/downloadPDF.shtml. Copies of the Code of Federal Regulation are available online through the U.S. Government Printing Office via GPO Access: http://www.gpoaccess.gov/cfr/index.html.
Rulemaking Specific Authority 517.03(1), 517.121(1), 517.1215 FS. Law Implemented 517.121(1), 517.1215 FS. History–New 12-5-79, Amended 9-20-82, Formerly 3E-600.14, Amended 10-14-90, 8-1-91, 6-16-92, 1-11-93, 9-9-96, 6-22-98, 1-25-00, 10-30-03, Formerly 3E-600.014, Amended 10-23-06, 5-15-07,_________.
69W-600.015 Financial Reporting Requirements – Statement of Financial Condition – Dealers and Investment Advisers.
(1) No change.
(2) Every dealer registered pursuant to Section 517.12, F.S., and rules thereunder shall file annually with the Office of Financial Regulation, within ninety (90) days after the conclusion of said registrant’s fiscal year, audited financial statements as prepared by an independent outside auditor, unless exempted under Rule 69W-300.002, F.A.C.
(a) through (b) No change.
(c) In lieu of the provisions of paragraph (b) above, the Office of Financial Regulation will accept those statements prepared and filed by a dealer in accordance with the provisions of SEC Rule 17a-5 (17 C.F.R. CFR § 240.17a-5 (2010)) and SEC Rule 17a-10 (17 C.F.R. CFR § 240.17a-10 (2010)), as such rules existed on July 1, 2003.
(3) and (4) No change.
(5) The federal regulations referenced in this rule are hereby incorporated by reference and may be obtained by mail from the Florida Office of Financial Regulation, Division of Securities, 200 E. Gaines Street, Tallahassee, Florida 32399. Copies of the Code of Federal Regulation are also available online through the U.S. Government Printing Office via GPO Access: http://www.gpoaccess.gov/cfr/index.html.
Rulemaking Specific Authority 517.03(1), 517.12(9), 517.121(2) FS. Law Implemented 517.12(9), 517.121(2) FS. History–New 12-5-79, Amended 9-20-82, Formerly 3E-600.15, Amended 6-16-92, 10-30-03, 4-8-04, Formerly 3E-600.015, Amended_________.
69W-600.016 Net Capital Requirements for Dealers and Investment Advisers.
(1) No change.
(2) All dealer applicants and registrants shall meet and at all times maintain the net capital and ratio requirements as prescribed by SEC Rule 15c3-1 including any appendices thereto (17 C.F.R. § 240.15c3-1, 240.15c3-1a, 240.15c3-1b, 240.15c3-1c and 240.15c3-1d (2010)), computed in accordance with said rule, as such rule existed on January 1, 1993.
(a) All reporting requirements as specified in (17 C.F.R. § 240.17a-11 (2010)), as such rule existed on January 1, 1993, when such regulation is referred in SEC Rule 15c3-1 shall be applicable with the exception that such reports and notifications required by said rule shall be forwarded to the Office of Financial Regulation as well as the other regulatory agencies specified, if applicable.
(b) All references to (17 C.F.R. § 240.17a-3 (2010)) and (17 C.F.R. § 240.17a-4 (2010)), as such provisions existed on January 1, 1993, in the foregoing and subsequent provisions of Office of Financial Regulation or SEC Rules as adopted by the Office of Financial Regulation, shall be read as to mean Office of Financial Regulation, Rule 69W-600.014, F.A.C.
(3) Issuer/dealer or investment adviser applicants or registrants shall meet the net capital requirements of this section:
(a) Investment advisers who have custody of client funds or securities or who receive payment of advisory fees six months or more in advance and in excess of $500 per client shall maintain net capital in the amount of $25,000 calculated as prescribed by SEC Rule 15c3-1 (17 C.F.R. CFR § 240.15c3-1 (2010)), including any ratio requirements and appendices thereto, as such provisions existed on January 1, 1993.
(b) Investment advisers who do not have custody of client funds or securities or who do not receive payment for advisory services six months or more in advance and in excess of $500 per client shall maintain net capital: (1) in the amount of $5,000 calculated as prescribed by SEC Rule 15c3-1 (17 C.F.R. CFR § 240.15c3-1 (2010)), including any ratio requirements and appendices thereto, as such provisions existed on January 1, 1993; or (2) of at least $2,500. For purposes of option (2) of this subsection, net capital shall be defined as assets minus liabilities in accordance with United States Generally Accepted Accounting Principles as adopted by the American Institute of Certified Public Accountants, as such provisions existed on June 1, 1992.
(c) Investment advisers who compute net capital in accordance with SEC Rule 15c3-1, as such rule existed on January 1, 1993, may exclude liabilities which are subordinated to the claims of creditors pursuant to a subordination agreement, provided such agreement complies with all terms and conditions specified in Appendix D to SEC Rule 15c3-1 (17 C.F.R. CFR § 240.15c3-1 and 240.15c3-1d (2010)), as such provision existed on January 1, 1993, except for the requirement that such agreement be filed with and approved by the Securities and Exchange Commission. Those investment advisers who have subordination agreements in effect prior to the effective date of this subsection shall not be required to comply with the conditions specified in Appendix D to SEC Rule 15c3-1. Should the investment adviser renegotiate or enter into a new subordination agreement, the agreement must comply with the provisions of Appendix D of SEC Rule 15c3-1.
(d) An issuer/dealer shall maintain net capital, defined as assets minus liabilities and computed in accordance with United States Generally Accepted Accounting Principles as adopted by the American Institute of Certified Public Accountants, as such provisions existed on June 1, 1992, of at least $5,000, unless required elsewhere by these rules to maintain a greater minimum net capital.
(4) through (5) No change.
(6) The federal regulations referenced in this rule are hereby incorporated by reference and may be obtained by mail from the Florida Office of Financial Regulation, Division of Securities, 200 E. Gaines Street, Tallahassee, Florida 32399. Copies of the Code of Federal Regulation are also available online through the U.S. Government Printing Office via GPO Access: http://www.gpoaccess.gov/cfr/index.html.
Rulemaking Specific Authority 517.03(1) FS. Law Implemented 517.12(9), (16) FS. History–New 12-5-79, Amended 9-20-82, Formerly 3E-600.16, Amended 10-15-86, 8-1-91, 6-29-93, 11-22-93, Formerly 3E-600.016, Amended________.
69W-600.017 Customer Protection Rule – Reserve Requirements and Custody of Customer Funds and Securities.
All Dealer applicants and registrants subject to the net capital provisions of subsection 69W-600.016(2), F.A.C., shall be required to prepare and maintain such records and accounts as specified in, and to comply in all other respects with, the provisions of SEC Rule 15c3-3 (17 C.F.R. CFR § 240.15c3-3 (2010)), which is hereby incorporated by reference and may be obtained by mail from the Florida Office of Financial Regulation, Division of Securities, 200 E. Gaines Street, Tallahassee, Florida 32399 as such provisions existed on February 28, 1992. Copies of the Code of Federal Regulation are also available online through the U.S. Government Printing Office via GPO Access: http://www.gpoaccess.gov/cfr/index.html.
Rulemaking Specific Authority 517.03(1), 517.12(9), 517.121(2) FS. Law Implemented 517.12(9), 517.121(2) FS. History–New 12-5-79, Formerly 3E-600.17, Amended 6-16-92, Formerly 3E-600.017, Amended_________.
69W-600.020 Continuing Education Requirements.
(1) Failure to comply with any of the applicable continuing education requirements set forth in any one of the following shall be deemed a demonstration of unworthiness by a dealer or associated person under Section 517.161(1)(h), F.S.:
(a)(1) NASD Membership and Registration Rule 1120 of the Financial Industry Regulatory Authority National Association of Securities Dealers, as such provisions existed on June 23, 2010 July 1, 2003;
(b)(2) Rule 345A 345 A of the New York Stock Exchange, as such provisions existed on June 23, 2010 July 1, 2003;
(c)(3) Rule G-3(h) of the Municipal Securities Rulemaking Board, as such provisions existed on June 23, 2010 July 1, 2003;
(d)(4) Rule 341A 341 A of the American Stock Exchange, as such provisions existed on June 23, 2010 July 1, 2003;
(5) Rule 9.3A of the Chicago Board of Options Exchange, as such provisions existed on July 1, 2003;
(e)(6) Article VI, Rule 11 9 of the Chicago Stock Exchange, as such provisions existed on June 23, 2010 July 1, 2003;
(7) Rule 9.27(c) of the Pacific Stock Exchange, as such provisions existed on July 1, 2003; or
(8) Rule 640 of the Philadelphia Stock Exchange, as such provisions existed on July 1, 2003.
(2) The rules of the NASD, New York Stock Exchange, Municipal Securities Rulemaking Board, American Stock Exchange and Chicago Stock Exchange referenced in this rule are hereby incorporated by reference and may be obtained by mail from Florida Office of Financial Regulation, Division of Securities, 200 E. Gaines Street, Tallahassee, Florida 32399.
Rulemaking Specific Authority 517.03(1) FS. Law Implemented 517.12(18), 517.161(1) FS. History–New 12-21-95, Amended 8-19-99, 10-30-03, Formerly 3E-600.020, Amended_________.