Publications iconKansas Administrative Regulations

Agency 81

Office of the Securities Commissioner

Article 3.—Licensing; Broker-Dealers and Agents

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81-3-1. Registration procedures for broker-dealers and agents. (a) General provisions. Each applicant shall be at least 18 years of age. If the applicant is not an individual, then the directors, officers, managing partners, or managing members of the applicant shall be at least 18 years of age.
(b) Registration requirements for broker-dealers.
(1) Initial application.
(A) CRD filing requirements. Each applicant for initial registration as a broker-dealer shall complete form BD in accordance with the form instructions and shall file the form with the CRD, unless the applicant is not required to file with the CRD for FINRA membership or SEC registration. Each application filed with the CRD shall include the following:
(i) The registration fee specified in K.A.R. 81-3-2(a);
(ii) any reasonable fee charged by FINRA for filing through the CRD system; and
(iii) a current list of the addresses of all branch offices and the names of all branch supervisors.
(B) Direct filing requirements. Each applicant for initial registration as a broker-dealer that is required to file with the CRD pursuant to paragraph (b)(1)(A) shall file either of the following, as applicable, directly with the administrator:
(i) The annual report for the applicant's last fiscal year pursuant to SEC rule 17a-5(d), 17 C.F.R. 240.17a-5(d), as adopted by reference in K.A.R. 81-2-1, unless the applicant was not required to file an annual report with FINRA and the SEC, and part II of the applicant's most recent FOCUS report on form X-17A-5 that includes a statement of financial condition dated within 90 days of filing for registration, unless the applicant was not required to file a FOCUS report with FINRA and the SEC; or
(ii) a statement of financial condition with notes to the statement presented in conformity with GAAP dated within 90 days of filing for registration, including disclosure of the applicant's net capital or a supplemental schedule of net capital pursuant to K.A.R. 81-3-7(d).
(C) Filing requirements for an applicant that is not required to file with CRD for FINRA membership or SEC registration. An applicant that is not required to file with CRD shall file the following directly with the administrator:
(i) A printed form BD, completed in accordance with the form instructions;
(ii) the registration fee specified in K.A.R. 81-3-2(a); and
(iii) the statement of financial condition specified in paragraph (b)(1)(B)(ii).
(2) Effective date of registration. Each registration shall become effective the 45th day after a completed application is filed unless approved earlier by the administrator. If the administrator or the administrator's staff has given written notice of deficiencies in the application, the application shall not be considered complete until an amendment is filed to resolve the deficiencies.
(3) Expiration and annual renewal of registration. Each broker-dealer registration shall expire on December 31, and each application for renewal of registration shall be filed as follows:
(i) If the initial application for registration was filed with the CRD, the renewal application shall be filed with the CRD not later than the deadline established by the CRD. Each application for renewal of registration shall include the fee specified in K.A.R. 81-3-2(a) and any reasonable fee charged by FINRA for filing through the CRD system. Each applicant for renewal shall also update in formation in the CRD system as necessary, on or before December 31, including the addresses of all branch offices and the names of all branch supervisors.
(ii) If the initial application for registration was filed directly with the administrator pursuant to paragraph (b)(1)(C), the renewal application shall be filed directly with the administrator and shall include the fee specified in K.A.R. 81-3-2(a). Each application for renewal filed directly with the administrator shall include an updated form BD with amendments for material changes, if any, as specified in paragraph (b)(4).
(4) Updates and amendments. Each registered broker-dealer shall promptly file an amendment to form BD, in accordance with the instructions to form BD, whenever there is any material change in any information, exhibits, or schedules submitted, or circumstances disclosed in its last filed form BD. An amendment shall be considered to be filed promptly if the amendment is filed within 30 days of the event that requires the filing of an amendment. Material changes shall include the following:
(A) A change in firm name, ownership, management, or control of a broker-dealer, or a change in any of its controlling persons; a change of business address; or the creation or termination of a branch office in Kansas;
(B) a change in the type of entity, general plan, or nature of a broker-dealer's business, method of operation, or type of securities in which it is dealing or trading;
(C) insolvency, dissolution, liquidation, or a material adverse change or impairment of working capital, or noncompliance with the minimum net capital as required by K.A.R. 81-3-7;
(D) termination of business or discontinuance of activities as a broker-dealer;
(E) the filing of a criminal charge or civil action against a registrant, or a controlling person, in which a fraudulent, dishonest, or unethical act is alleged or a violation of a securities law is involved; or
(F) the entry of an order or proceeding by any court or administrative agency against a registrant denying, suspending, or revoking a registration, or threatening to do so, or enjoining the registrant from engaging in or continuing any conduct or practice in the securities business.
(5) Withdrawal and termination of registration.
(A) Each application that has been on file for six months without any action taken by the applicant shall be considered withdrawn.
(B) If a broker-dealer desires to withdraw and terminate registration or registration is terminated by the administrator, the broker-dealer shall immediately file a completed form BDW either with the CRD or, if the broker-dealer was registered pursuant to paragraph (b) (1)(C), directly with the administrator.
(c) Registration requirements for agents.
(1) Initial application. Each applicant for registration as an agent shall complete form U-4 in accordance with the form instructions. The form for an agent of a broker-deal er shall be filed electronically with the CRD. A form U-4 shall be filed directly, in either paper or electronic form, with the administrator for an agent who is associated solely with an issuer or with an intrastate broker-dealer registered pursuant to paragraph (b)(1)(C). Each application for initial registration shall include the following items:
(A) The registration fee specified in K.A.R. 81-3-2(b);
(B) any reasonable fee charged by FINRA for filing through the CRD system; and
(C) proof of completion of the series 63 or series 66 examination with a passing score, in addition to successful completion of one other examination approved by the administrator and required for registration with FINRA. This examination requirement may be waived by the administrator for an applicant who has previously passed the required written examinations and whose last effective registration was not more than two years before the date of the filing of the present registration application. Additional examination requirements may be imposed by the administrator, or any applicant may be exempted from examination requirements pursuant to K.S.A. 17-12a412(e), and amendments thereto.
(2) Effective date of registration.
(A) Initial registration. Each registration shall become effective the 45th day after a completed application is filed unless the application is approved earlier by the administrator. If the administrator or the administrator's staff has given written notice of deficiencies in the application, the application shall not be considered complete until an amendment is filed to resolve the deficiencies.
(B) Transfer of employment or association. If an agent terminates employment by or association with a broker-dealer and begins employment by or association with another broker-dealer, and the second broker-dealer files an application for registration for the agent within 30 days after the termination, the application shall become effective pursuant to K.S.A. 17-12a408(b), and amendments thereto.
(3) Expiration and annual renewal of registration. Each agent registration shall expire on December 31, and each application for renewal of registration shall be filed not later than the deadline established by the CRD or the administrator, if filed directly with the administrator. Each application for renewal of registration shall include the fee specified in K.A.R. 81-3-2(b) and any reasonable fee charged by FINRA for filing through the CRD system.
(4) Updates and amendments. Each agent's employing or associated broker-dealer or issuer shall promptly file with the CRD or the administrator an amendment to form U-4, in accordance with the instructions to form U-4, whenever there is any material change in any information, exhibits, or schedules submitted, or circumstances disclosed in the agent's last filed form U-4. An amendment shall be considered to be filed promptly if the amendment is filed within 30 days of the event that requires the filing of an amendment. Material changes shall include any change in the registrant's name, residential address, office of employment address, and matters disclosed in the "disclosure questions" portion of form U-4.
(5) Withdrawal and termination of registration.
(A) Each application that has been on file for six months without any action taken by the applicant shall be considered withdrawn.
(B) If an agent's employment by or association with a broker-dealer or issuer is discontinued or terminated, the broker-dealer or issuer shall file a notice of termination within 30 days. If the agent commences employment by or association with another broker-dealer or issuer, that broker-dealer or issuer shall file an original application for registration.
(C) Termination of a broker-dealer's or issuer's registration for any reason shall automatically constitute cancellation of all associated agents' registrations. (Authorized by K.S.A. 17-12a605(a); implementing K.S.A. 17-12a406, 17-12a407, 17-12a408, and 17-12a412(e); effective Jan. 1, 1966; amended, E-70-15, Feb. 4, 1970; amended Jan. 1, 1971; amended, E-77-40, Aug. 12, 1976; amended Feb. 15, 1977; amended May 1, 1987; amended Oct. 7, 1991; amended June 28, 1993; amended May 31, 1996; amended Oct. 26, 2001; amended Aug. 18, 2006; amended Jan. 4, 2016.)
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