Series 66 for Dummies, pdf p. 74 to 80

Persons subject to state registration:

• Broker/dealers-legal persons such as corporations or partnerships
• agents-always individuals (natural persons)
• investment advisers-generally legal persons such as corporations or partnerships
• investment adviser representatives-always persons

Broker dealer

• any person who effects transactions
• registered representatives work for B/D's 

Exclusions from B/D

• agents
• issuers
• banks, savings institutions, and trust companies
• since banks use subsidiaries to do securities activities, banks DO NOT need to register as B/D's
• commercial banks EXEMPT
• no place of business in state + deal ONLY with issuers/broker dealers/banks/savings loans associations/trust companies/insurance companies, insurance companies, investment companies, pension or profit sharing trusts
• no place of business in state + licensed in a state where they have a place of business

Internet presence

• disclaimer: person will ONLY do business in state if registered or EXEMPT
• site can NOT make specific recommendations
• if you follow up with advice or offer securities register or use exemption

Broker dealer registration requirements

• if B/D, must register
• register with SEC form B/D with state-specific information

Omitted: 2 case studies

Financial requirements

• net capital requirements for broker/dealers 
• those with custody of client funds have to post surety bonds
• states determine amount of bonds
• SEC enforces most broker/dealer infractions. Administrator enforces anti-fraud laws

Questions:

1. A person who effects transactions in securities for itself or for the account of others in the course of business must register in the state as a broker/dealer
2. Under the Uniform Securities Act, an out-of-state firm that transacts business with an established customer who is on vacation is not considered a broker/dealer in the state in which the customer is on vacation
3. A person is not defined as a broker/dealer in the state under the USA need not register as such
4. A broker/dealer registered with the SEC and several states must meet the net capital standard of the state with the most stringent requirements

Agent:

• a person who represents a broker/dealer or an issuer
• agents a.k.a registered representatives
• only an individual can be an agent

Exclusions from Definition of Agent for Administrative Personnel

• clerical/administrative/ministerial employees are not agents
• if personnel take on securities related functions, they must register
• if secretaries or sales agents accept customer transactions or take orders over the phone they must register as agents