This Q&A format is designed to provide you with responses to questions frequently addressed to Registration staff in connection with the registration or notice filings of dealers and their agents. This discussion cannot address every possible scenario, so readers should consult the Texas Securities Act and Board Rules for additional information. These FAQs are not intended as legal advice. Readers are encouraged to consult an attorney.
References to Board Rules refer to the Rules and Regulations of the Texas State Securities Board. The Rules are located at 7 Texas Administrative Code (TAC) 101-139 and are accessible from this website. References to Sections refer to Sections of the Texas Securities Act (the Act), Tex. Rev. Civ. Stat. Ann., art. 581-1 et seq.
The FAQ's are organized in the following categories:
1. Broker Dealers and their Agents
1.A. When registration is required
1.A.1. Does Texas have any exemptions from dealer registration available to persons who sell securities within Texas?
Yes, numerous exemptions are available to dealers and agents whose activities would otherwise require them to register with the Texas Securities Commissioner. Section 5 of the Act lists transactions exempt from securities registration and provides that the company or person engaging in many of these transactions need not be registered as a dealer. Sections 5.T and 12.B of the Act authorize the creation of additional exemptions by rule. Section 5.T and 12.B rules are found in Chapters 109, 111, and 139 of the Rules. Many of these rules also provide an exemption from the dealer registration provisions of the Act. An exemption for broker dealer agent registration appears in Rule 115.1(b)(2).
1.A.2. I am president of a bank headquartered in Texas, with numerous branches located throughout the state. We have reached an agreement with an independent registered dealer for them to begin selling securities from offices located on our bank’s premises. Is our bank required to be registered with the Texas Securities Commissioner before sales activity can legally begin?
Yes, your bank must register with the Texas Securities Commissioner unless certain conditions for an exemption are satisfied. See Rule 139.20. Note that filing and fee requirements for dealers and agents exempted under this provision are preserved in Rule 139.20(c). Notice filing fees are equal to the amount that would have been paid had the dealer and each agent filed for registration in Texas. Please refer to the “Forms and Fees” link for an updated list of fees: Forms and Fees
1.A.3. My business is planning an initial public offering of securities and wants to sell the shares through registered dealers in Texas. Does my business need to register as a dealer with the Texas Securities Commissioner?
No, your business is not required to be registered if all sales activities are conducted by a registered dealer. The definition of dealer in Section 4.C of the Act excludes an issuer that sells securities only by or through a registered dealer acting as fiscal agent for the issuer.
1.A.4. Is registration as a dealer with the Texas Securities Commissioner required to sell interests in oil and gas leases?
Usually. Section 5.Q of the Act provides an exemption from dealer registration for the owners of oil and gas leases who wish to sell interests in the leases. If an agent of the owner is involved in selling the interests, that agent must be registered. Rule 109.14(b) states that if three specified conditions are met, an employee of the owner selling such interests is not considered an agent required to be registered with the Texas Securities Commissioner. All three of these conditions must be met, or the employee cannot sell the interests for the owner without registering.
1.A.5. Do I have to register with the Texas Securities Commissioner if I am offering and selling covered securities as defined in Section 18(b) of the federal Securities Act of 1933?
Yes. Dealing in covered securities does not in and of itself provide an exemption from dealer or agent registration. See Rule 114.4(g). However, see FAQ 1.A.1.
1.A.6. I am an agent of BD Firm. BD Firm is currently registered with the Texas Securities Commissioner, but I am not. One of my best clients, Mr. Jones, is moving to Texas in a few weeks. May I continue to trade securities for him without registering with the Texas Securities Commissioner? He would be my only Texas client.
You may be able to continue to trade for Mr. Jones on a temporary basis once he is in Texas. The Securities Exchange Act of 1934, Section 15(i)(4), provides a grace period for state registration when an existing customer moves. See Rule 115.1(b)(2). To qualify for the provision, all of the following conditions must be met:
- BD Firm must be currently registered with the Texas Securities Commissioner. (For a situation where BD Firm is not registered, see FAQ 1.A.7.)
- You are not ineligible to register as an agent with the Texas Securities Commissioner (See Rule 115.1(b)(2)(B).) In this limited context, agents are ineligible to register with this state if they have been convicted of a securities-related felony or a theft-related felony.
- You are registered with a registered securities association and at least one state. (See Rule 115.1(b)(2)(A) and (C).) A registered securities association is any one currently recognized as such by the Securities and Exchange Commission pursuant to Section 15A of the Securities Exchange Act of 1934. To date, the only one so recognized is the Financial Industry Regulatory Authority (FINRA).
- You must file an application for registration with the Texas Securities Commissioner within 10 business days after (1) the date of the transaction you effected for Mr. Jones once he has changed his residence to Texas, or (2) you discover Mr. Jones has changed his residence to Texas. After you have filed an application for agent registration with Texas, you may continue to effect transactions for Mr. Jones for 60 days after the date your application was filed, as long as you have not been notified that your application has been denied or stayed for cause.
Additionally, the transactions effected for Mr. Jones must be of the kind described in Section 15(i)(4) of the Securities Exchange Act of 1934. In the situation presented, that provision would require that:
- Mr. Jones has maintained an account with BD Firm for 30 days prior to the day of the transaction;
- You were assigned to Mr. Jones for 14 days prior to the day of the transaction; and
- You are registered with a state where Mr. Jones (1) previously resided, or (2) was present for at least 30 consecutive days during the 1-year period prior to the day of the transaction.
1.A.7. I am an agent for BD Firm. Neither the BD firm nor I is registered with the Texas Securities Commissioner. May I continue to trade securities for my client, Mr. Jones, without registering with Texas? He would be my only Texas client.
Unlike many states, Texas does not have a de minimis exemption from registration for agents of a dealer when the dealer is not registered with the Texas Securities Commissioner. If you sell or offer for sale securities in Texas, even if you have only one client, you must be registered as an agent of a Texas-registered dealer, or as a dealer yourself, before you sell or offer to sell securities. However, see FAQ 1.A.1.
1.A.8. I am an agent of BD Firm. BD Firm is currently registered with the Texas Securities Commissioner, but I am not. One of my clients, Ms. Smith, is vacationing in Texas for a few weeks. May I trade securities for her while she is in Texas without registering with Texas? I have no other clients located in Texas.
You may be able to continue to trade for Ms. Smith on a temporary basis while she is in Texas. The Securities Exchange Act of 1934, Section 15(i)(3), provides a de minimis transaction exemption for agents when their clients are traveling or on vacation. See Rule 115.1(b)(2). To qualify for the provision, all of the following conditions must be met:
- BD Firm must be currently registered with the Texas Securities Commissioner. (In situations where BD Firm is not registered with Texas, see FAQ 1.A.9.
- You are not ineligible to register as an agent with the Texas Securities Commissioner. (See Rule 115.1(b)(2)(B) and FAQ 1.A.10.)
- You are registered with a registered securities association and at least one state. (See Rule 115.1(b)(2)(A) and (C) and FAQ 1.A.6.)
If Ms. Smith is in Texas for 30 or more consecutive days, you must file an application for registration in Texas within 10 business days after (1) the date of the transaction you effected for Ms. Smith, or (2) you discover Ms. Smith has been in Texas for 30 or more consecutive days. After you have filed an application for agent registration in Texas, you may continue to effect transactions for Ms. Smith for 60 days after the date your application was filed, as long as you have not been notified that your application has been denied or stayed for cause.
Additionally, the transactions effected for Ms. Smith must be of the kind described in Section 15(i)(4) of the Securities Exchange Act of 1934. In the situation presented, that provision would require that:
- Ms. Smith has maintained an account with BD Firm for 30 days prior to the day of the transaction;
- You were assigned to Ms. Smith for 14 days prior to the day of the transaction; and
- You are registered with a state where Ms. Smith (1) resided, or (2) was present for at least 30 consecutive days during the 1-year period prior to the day of the transaction.
1.A.9. I am an agent of BD Firm. Neither BD Firm nor I is currently registered with the Texas Securities Commissioner. One of my clients, Ms. Smith, is vacationing in Texas for a few weeks. May I trade securities for her while she is in Texas without registering with Texas? Assume I have no other clients located in Texas.
Unlike many states, Texas does not have a de minimis exemption from registration for agents of a dealer when the dealer is not registered with the Texas Securities Commissioner. If you sell or offer for sale securities in Texas, even if you have only one client, you must be registered as an agent of a Texas-registered dealer, or as a dealer yourself, before you sell or offer to sell securities. However, see FAQ 1.A.1.
1.B. Other requirements
1.B.1. I am involved in selling securities; however, I am exempt from the dealer registration requirements of the Act. Do I need to comply with any other provisions of the Act in conducting my sales activities?
Yes, for example, certain of the civil liability provisions of Section 33 of the Act and the penal provisions of Section 29 of the Act will still apply to you, including the antifraud provisions of Section 29.C. Violations of the provisions of Section 29 are felonies and carry substantial penalties, including, for the most serious violations, up to life imprisonment and a $10,000 fine. Although federal law provides exemptions (such as the de minimis transaction exemption discussed in FAQ 1.A.8) from the dealer registration requirements, the state’s fraud authority is preserved. Accordingly, the state’s jurisdiction to investigate and bring enforcement actions with respect to fraud or deceit, or unlawful conduct by a broker or dealer, in connection with securities or securities transactions remains unaffected. See Rules 114.4(I) and 115.1(b)(2)(D).
1.B.2. As a seller of securities, are there limitations on the use made of information I have pertaining to my clients?
Yes, the Gramm-Leach-Bliley Act prohibits a financial institution from disclosing nonpublic personal information about a consumer to nonaffiliated third parties, unless certain notice and opt-out requirements have been met. Additionally, the institution must develop written privacy policies and disclose them to customers on an annual basis.
1.C. Finders
1.C.1. What is a Finder?
A Finder is an individual who receives compensation solely for introducing an accredited investor to a company issuing securities and/or introducing an issuer to accredited investors. See Rule 115.1(a)(9) of the Rules for the precise definition of a Finder.
1.C.2. What are the filing requirements for a Finder?
A Finder must submit an application on Form BD and pay a fee of $75. Be sure to check the box as a “Sole Proprietor” in Item 3 of the Form BD. In addition, the Finder must file Form U4 as the agent of the Dealer. There is no fee for the filing of the Form U4. The applications must be filed in paper form with a cover letter stating that the application is for registration as a Finder. These documents and fee must be mailed to the Texas State Securities Board, P.O. Box 13167, Austin, TX 78711-3167.
1.C.3. Are there any examination requirements for a Finder?
No. Finders are given a waiver of the examination requirements, as described in Rule 115.3(c)(2)(e).
1.C.4. The Form BD contains questions that do not necessarily pertain to my activities as a Finder. Do I have to complete all the questions?
Yes. You must complete all of the questions on the Form BD. For those questions that do not pertain to your business, please state not applicable.
1.C.5. Item 12 of Form BD requires you to identify the types of business engaged in, or to be engaged in if not yet active. Finder’s activities are not in the list. How do I respond?
You may check the box in Item 12.Z of Form BD that refers to other activities. You will then be required to describe your limited Finder activities in Schedule D of the Form BD.
1.C.6. Will I receive a Certificate of Registration upon approval of my application?
Yes. The Certificate of Registration will reflect a General Dealer Restricted to Finder’s activities prescribed in Rule 115.1(c)(2)(M).
1.C.7. Can an LLC or corporation submit a Finder’s application?
No. Finder registration is limited to individuals. If an LLC or corporation (Entity) intends to provide Finder’s activities, the Entity will be subject to the general dealer registration requirements prescribed in Rule 115.2, and each agent of the dealer will be required to satisfy the minimum qualifications for registration and pass certain examinations prescribed in Rule 115.3.
1.C.8. Are there any minimum capital or bonding requirements?
No.
1.C.9. Can a Finder receive equity from the Issuer of the securities as compensation?
Yes. However, the Finder, as a potential shareholder of the Issuer, must disclose the conflicts of interest this form of compensation imposes.
1.D. Business Brokers
1.D.1. What is a “business broker” under Texas securities laws? Who needs a business broker license?
A business broker is a type of securities dealer that is restricted to a narrow scope of securities-related activities. A business broker is a person (including an individual or a company) whose securities activities are restricted to acting as a broker between principals for the sale of a majority of the stock or equity securities of a privately held business pursuant to a privately negotiated purchase agreement, where the managerial control of the business will devolve upon the purchaser(s) and where compensation received by the business broker will be payable for the brokerage activities only.
Any individual or entity that performs these activities must be registered with the Securities Commissioner as a dealer, or agent of a dealer, before acting as a business broker. See Section 12 of the Act.
1.D.2. When a sale of a business is accomplished by a sale of the assets of the business rather than through a stock or other securities sale, is registration as a business broker required?
No. The registration provisions of the Act only apply when a sale is made or proposed to be made through the sale of securities.
1.D.3. Are there any situations where a business broker can offer the sale of a small business on a stock basis without violating the Act or Board Rules?
Registration is required regardless of the size of the business that is being brokered when it is offered or sold through the transfer of stock or other equity securities.
1.D.4. What is the cost of a business broker dealer license?
The filing of an original application is $75. A registration is effective through December 31 of the year it is granted. A registration must be renewed annually for a fee of $40.
If the business broker applicant is a legal entity (corporation, partnership or LLC, for example) the entity must also apply to register a designated officer via Form U-4. The application fee for registration of a designated officer is $35 for the initial application and $20 for each annual renewal.
If a business broker conducts securities-related activities through an agent, the agent must be registered. An agent application fee is $35 and it must be renewed annually. The agent renewal fee is $20.
1.D.5. What form does a business broker use to register its “main office” with the Texas Securities Commissioner?
Form BD is used to register a company or sole proprietor as a business broker. Form BD will identify the principal place of business of the broker. If the business broker conducts securities-related activities at another location in addition to the principal place of business the other location(s) must be notice filed as a “branch office” of the broker. Form BR is used to make the notice filing for the branch office.
1.D.6. What form does an individual business broker use to register himself/herself?
Form BD. If an agent of a sole proprietor business broker is required to register, Form U-4 is used. See Rule 115.2(a).
1.D.7. If a company registers with the Texas Securities Commissioner, does each agent have to register also?
If a broker conducts activities as a business broker through agents, each of the agents must be registered.
1.D.8. Once an application for a business broker license is submitted, what is the usual turnaround time for approval or response by the Registration Division?
Within 14 days after receipt of an application and appropriate registration fees, the Registration Division will send a letter setting forth a list of items or exhibits that either have not been filed or that contain errors or omissions. Within 14 days of receipt of requested items or exhibits, the staff will review the application and the applicant’s responses and make a recommendation to grant, deny, or allow withdrawal of the application. See Rule 104.5.
If the application is complete upon filing and there are no deficiencies, the Registration Staff may make its recommendation within 14 days after receipt of the application.
1.D.9. What are the filing requirements for obtaining a business broker license?
The applicant should submit:
- Form BD;
- Form U4 for the designated officer if the applicant is a legal entity;
- A copy of articles of incorporation, partnership agreement, articles of association, trust agreement, or
- Other documents which indicate the form of organization, certified by the appropriate jurisdiction or by
- An officer or partner of the applicant (unless the applicant is a sole proprietor);
- A balance sheet prepared in accordance with GAAP reflecting the financial condition of the business;
- Broker as of a date not more than 90 days prior to the date of such filing, as well as a certification of balance sheet form;
- Any other information deemed necessary by the Texas Securities Commissioner to determine the business broker’s or agent’s business repute or qualifications; and
- The appropriate fee(s). See Rule 115.2.
If a business broker has multiple offices where securities transactions will take place, each branch office must be notice filed using a Form BR.
1.D.10. Is a business broker applicant required to pass a securities examination?
No. Rule 115.3(c)(2)(D) provides a full waiver of examination requirements.
1.D.11. What does a business broker license cover?
The restricted activities described in FAQ 1.D.1.
1.D.12. What type of transactions does a business broker license cover (i.e., size, scope, etc.)?
A registration is restricted to business brokerage activities, but there is no limitation as to the size of a transaction or the size of a business broker’s operational structure. For example, where a business broker has multiple agents acting under the dealer’s license, the number of agents is not restricted but each agent must register by filing a Form U-4 and the appropriate fee.
1.D.13. Since business brokers do not hold money or securities, is there a bonding or minimum capital requirement for business brokers?
No, but an applicant must demonstrate that it is solvent by filing a balance sheet, as described in FAQ 1.D.9.
1.D.14. What are the possible penalties if a broker does not have a business broker license and he/she participates in a business brokerage securities transaction, or collects a fee in such a transaction?
If an unregistered person sells or offers securities for sale at a time when the person should be registered, the person could be subject to administrative, civil or criminal action.
1.D.15. When a properly licensed business broker is involved in a sale of business through a stock sale, what can that broker actually do?
A business broker can only act as a broker between principals in the scope of a privately negotiated purchase agreement.
1.D.16. When a properly licensed business broker is involved in a sale of business through a stock sale, what are some of the things that a broker should not do?
An exhaustive list is not possible, but in general a business broker should not participate in a fraud, material omission or misrepresentation, or a scheme to evade registration in relation to an offer for sale or sale of securities.
1.D.17. Can a properly licensed business broker participate in the valuation of a company that will sell via a stock sale?
The answer depends upon the circumstances and, in particular, the terms of a privately negotiated purchase agreement.
1.D.18. What if the sale started out as an asset sale and the broker did the valuation for the asset sale?
If it is not part of a scheme to evade registration, registration as a business broker is not triggered until the transaction evolves into a purchase of the business via a majority of the stock or equity capital. It should be noted that asset sales can quickly become securities transactions and the broker must be registered at the time of the transaction. Therefore, a business broker who is likely to be involved with a purchase that will be accomplished through a securities transaction should be registered beforehand. Refer to FAQ 1.D.8, regarding the time required to review an application.
1.D.19. When a properly licensed business broker is involved in a sale of business through a stock sale, can he/she pay a finder’s fee?
The business broker should not pay a fee to a person who is not registered as the broker’s agent, an agent of a general securities dealer, or as a finder, unless a specific exemption is available under the Act or Board rules. (Note: Exemptions are fact-specific so you should consult legal counsel or the General Counsel of Texas State Securities Board before relying on an exemption.)
A “finder” is an individual who receives compensation for introducing an accredited investor to an issuer or an issuer to an accredited investor solely for the purpose of a potential investment in the securities of the issuer, but does not participate in negotiating any of the terms of an investment and does not give advice to any such parties regarding the advantages or disadvantages of entering into an investment.
A finder must be registered and conduct his/her activities in accordance with Rule 115.11. The amount or structure of a finders fee is not restricted, but the role a finder may play in a transaction is restricted as described above and in FAQ 1.C.
1.D.20. When a properly licensed business broker is involved in a sale of business through a stock sale, can he/she receive referral fees from lenders, valuation experts or other entities involved in the transaction?
In relation to a sale of business through a stock sale a business broker can be compensated for the brokerage activities only.
1.D.21. Must a business broker’s securities related business be housed separately from non-regulated business activities?
No. However, a business broker that operates on the premises of another non-securities-related business should be careful to segregate the records of the business brokerage activities or it is possible that an inspection of the office could bring the other records under review, especially if the records of the other operation are commingled with those that are securities-related. See Rule 115.5(e)(9).
1.D.22. Is there a prohibition on advertising that a broker holds a securities license? What can a business broker say regarding registration with the Texas Securities Commissioner? Must the license be displayed on the wall of a business broker’s office?
It is unlawful for a business broker to use the fact of its registration by public display or advertisement. For example, a business broker may not maintain a marquee, letterhead or business cards stating that AABC Business Broker is registered with the Texas State Securities Board. “There is no prohibition on advertising that a broker is “registered,” but the fact of registration cannot be tied to the Texas State Securities Board or the Texas Securities Commissioner. See Section 20 of the Act.
Pursuant to Section 21 of the Act, immediately upon receipt of a registration certificate, the business broker shall post the certificate and at all times it is to be conspicuously displayed in the broker’s principal place of business and, likewise, branch offices must post the Firm's Certificate in each notice filed branch office located within this state. See Rule 115.2(c) relating to Form BR for each branch office.
1.D.23. Can a registered business broker include its securities dealer license number in advertising related to business brokerage activities?
No. As stated above, a business broker is prohibited from using the fact of its registration in advertising. The prohibition includes the public display or advertisement of the license number issued by the Texas State Securities Board.
1.D.24. Can a business broker bring a civil suit to collect a commission or compensation for securities-related activities?
Section 34 of the Act provides that no person shall bring any action in court for collection of a commission or compensation for services rendered in the sale or purchase of securities without alleging and proving that such person was duly registered under the Act.
1.D.25. Must securities transaction records be maintained within the same division/company as the records of sale-of-asset transactions or must they be segregated?
It is best to segregate stock transaction records from sale-of-asset transaction records. See FAQ 1.D.21.
1.D.26. A policy and procedures manual is required of a registered dealer who has agents. Does a sole practitioner who has no agents or affiliates working for him/her have to have a policy and procedures manual?
Pursuant to Rule 115.10, a written supervisory system is required when a broker has agents. The rule does not require such written procedures when the dealer does not have agents, but it generally considered a best practice to establish written procedures in order to ensure that records relating to business brokerage activities are properly created and preserved.
2.A. Capacity and types of registration
2.A.1 I am the sole owner, officer, and director of a corporation. Must I register as a corporation or can I register as a sole proprietor?
If the corporation will be represented in any manner (advisory contracts, letterhead, etc.) the corporation must register. If, however, you will act only as an individual, and do not use the corporate name, you may register as a sole proprietor, provided you meet all the registration requirements for a sole proprietor.
2.A.2 Our company is in the process of registering an offering of its securities in Texas. Rather than using a broker-dealer, we will act as distributor ourselves. What must we do to register in Texas?
A limited registration as an issuer-dealer may be obtained. Although the basic filing requirements are the same as those for a general securities dealer, in some instances a partial waiver of examination requirements for agents of the issuer-dealer may be available under Rule 115.3(c)(3)(E).
2.A.3 Who can be a designated officer (DO)?
A corporate officer, partner, or sole proprietor of the Texas-registered firm. See Rule 115.2(b). This designation does not require residence in Texas by the DO. If a Form BD is used, the DO must be named as an officer, partner or sole proprietor on Schedule A of Form BD. If the DO is not included on Schedule A, a letter must be provided stating the DO’s corporate title and confirming that the DO is an officer of the applicant as defined in Rule 115.1(a)(7).
2.A.4 Who can be a Texas branch office supervisor?
Any Texas-registered agent who has been designated as such by the firm. See Rule 115.2(c).
2.B. Examinations
2.B.1 I have a current license as a registered agent having passed the Series 7 and Series 63 exams. What do I have to do to keep these effective? How long before I must retake any exams?
The examinations you have passed meet the requirements for dealer or agent registration in Texas. Generally, as long as your registration remains active, you will not need to retake the exams. However, if your registration in Texas becomes inactive for a period of two years or longer, you must retake examinations to become registered again.
2.B.2 FINRA granted me a waiver of the Series 7 exam requirement. Do I still need to take the exam to register in Texas?
Yes, unless you apply for and receive a waiver from this Agency. Texas does not recognize examination waivers granted by other regulatory authorities. You may request an examination waiver when you file your application for registration in Texas. See Waiver of Examination Requirements for a discussion of the waiver process. If the waiver is not granted, you must pass the exam before becoming registered in Texas.
2.B.3 I do not meet the examination requirements to register in Texas. Is there a process to request a waiver from the examination requirements?
Yes, the Agency has a process for an applicant for registration (or the applicant’s firm) to request and obtain a waiver from one or more of the examination requirements set forth in Rule 115.3 if certain criteria are met. See Waiver of Examination Requirements for a discussion of the waiver process.
2.C. Other Requirements.
2.C.1 Do I have to register with FINRA if I am going to register with the Texas Securities Commissioner?
Registration with FINRA is not a prerequisite to registration with Texas.
2.C.2 I have a conviction on my record; will this prevent me from getting registered with Texas?
Not necessarily. Section 14.A(1) and (2) of the Act allow the Texas Securities Commissioner to deny registration to a person:
- convicted of any felony, or
- convicted of any misdemeanor which directly relates to the person’s securities-related duties and responsibilities.
Applications showing a conviction are considered on a case-by-case basis. See Rule 115.6. The Texas State Auditor's Office has recently published a useful guide for applicants in this situation - Best Practices Guide: Applying for an Occupational license After Conviction or Deferred Adjudication (SAO Report No. 20-32).
A person with a criminal history may also request the Agency issue a criminal history evaluation letter regarding the person's eligibility for a license prior to applying for a license. See Rule 104.7.
2.C.3 Is our firm subject to Texas franchise tax?
If your firm is a corporation or LLC, and if you are not sure of the firm’s Texas franchise tax status, you should contact the Texas Comptroller of Public Accounts at (800) 252-1381
3.A. Timing
3.A.1 Once registration is granted, are there annual filings?
Yes, registrants and notice filers must renew annually. Additionally, there is a continuing requirement to update throughout the year if a change occurs in the information furnished on the original application. This is true of both registrants and of notice filers.
3.A.2 What purpose does the December 31 renewal deadline serve?
The deadline allows the Agency to process renewals and issue new certificates in a timely and efficient manner.
3.A.3 Is there a grace period after December 31?
No. Section 19.C of the Act provides the penalties for late filings. To avoid paying penalties, a new application can be submitted. A break in registration status occurs if the renewal is not timely filed. Similarly, registration is terminated if the renewal fee is not timely paid. Refiling the registration or filing a late renewal does not result in backdating of the effective date of registration.
3.A.4 When will certificates be issued?
Registrants who meet the December 31 deadline will be issued a new Certificate of Registration by mid-January of the following year. The Firm’s Certificate of Registration is now available electronically and must be accessed from our website at www.ssb.texas.gov/securities-professionals/certificate-search. You must have the Firm’s CRD or Texas File number to search for your certificate.
3.B. Fees
3.B.1 Why do we pay an amendment fee?
Section 35.B(1) of the Act establishes amendment fees.
3.B.2 What changes require amendment fees?
Changes in: name of entity; home office; designated officer and/or supervisor; and plan of business, if it affects a restriction appearing on the certificate.
3.C. Other requirements
3.C.1 Is there a requirement to file an annual financial statement?
No, unless specifically requested by the Texas Securities Commissioner or his representative.