A broker-dealer is a person engaged in the business of effecting transactions in securities issued by another person or by such person for the account of others or for the person’s own account. Investment advice given by broker-dealers is usually incidental to the completion of purchase and sale transactions in securities. Compensation is normally in the form of commission but some firms now charge one fee for all services, based on the value of the assets in the account. All broker-dealers, regardless of their location, must be registered to conduct business in North Dakota unless they qualify for an exemption from registration. There is no de minimis rule exemption for broker-dealers.
A securities agent is an individual, other than a broker-dealer, who represents a broker-dealer or an issuer or is self-employed in effecting or attempting to effect purchases or sales of securities. All securities agents, regardless of their location, must be registered to conduct business with North Dakota investors unless they qualify for an exemption from registration. There is no de minimis exemption for securities agents. Also, there is no "unsolicited rule" that allows an agent to accept unsolicited orders from North Dakota customers without being registered in the state.
Form BD must be filed through the Central Registration Depository (CRD) System.
The registration and renewal fee for broker-dealers is $200 and fee will be deducted from the broker-dealer’s CRD account.
The applicant must be approved by FINRA before registration can be approved in North Dakota.
An Affidavit of Broker-Dealer Activity form must be submitted to the department for verification of activity. Until an application for registration has been approved, no transactions or solicitations may be made by the applicant in North Dakota.
Federal Regulation Best Interest requires that all broker-dealers offering services to retail investors file a customer relationship summary through CRD. Applications will not be approved until Form CRS has been filed. BD's that have determined that Form CRS is not applicable to their business must provide registration staff with a written statement of this determination via email.
North Dakota does not require the submission of annual audited financial statements.
The registration and renewal fee for agents is $60 and will be deducted from the broker-dealer’s CRD account.
Agents are required to have passed the Securities Industry Essentials (SIE) Exam, the Series 7 General Securities Representative Exam and either the Series 66 Uniform Combined State Law Examination, or the Series 63 Uniform Securities Agent State Law Exam or, other securities business or product exam as required by the Commissioner.
- Securities Industry Registrations: Getting and Maintaining a FINRA Registration Federal and state agencies, as well as non-governmental regulators like FINRA and the securities exchanges oversee the activities of securities professionals.
- Central Registration Depository (CRD) FINRA is responsible for the Central Registration Depository (CRD®) program, which supports the licensing and registration filing requirements of the U.S. securities industry and its regulators.
- Qualification Exams To become registered, securities professionals must pass qualifying exams, including NASAA State Law Exams, administered by FINRA to demonstrate their competence in the particular securities activities in which they will work.
Laws, Rules and Orders
- N.D.C.C. 10-04-10. Registration of broker-dealers, agents, Investment advisers, and Investment adviser representatives - Notice filings by federal covered advisers
- N.D.C.C. 10-04-10.3. Post registration provisions
For Assistance Contact:
Cody Schmidt, Examiner / Investigator, Email Cody
Phone: (701) 328-4703; ND Toll Free: (800) 297-5124