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2017 Arkansas Code
Title 23 - Public Utilities and Regulated Industries
Subtitle 2 - Financial Institutions and Securities
Chapter 42 - Arkansas Securities Act
Subchapter 3 - Broker-Dealers, Agents, and Investment Advisers
§ 23-42-301. Registration required -- Unlawful acts -- Supervision requirements
Universal Citation: AR Code § 23-42-301 (2017)
- (a) It is unlawful for a person to transact business in this state as a broker-dealer or agent unless he or she is registered under this chapter.
- (b)
- (1) It is unlawful for a registered broker-dealer or issuer to employ an unregistered agent except a nonresident agent who is registered by any other state securities administrator and who effects transactions in this state exclusively with registered broker-dealers.
- (2) The registration of an agent is not effective during a period when he or she is not associated with a particular:
- (A) Broker-dealer registered under this chapter; or
- (B) Issuer.
- (3) (A) A broker-dealer or issuer shall notify promptly the Securities Commissioner or the commissioner's designee if an agent begins or terminates:
- (i) An association with a broker-dealer or issuer; or
- (ii) The activities that make him or her an agent of the broker-dealer or issuer.
- (B) If an agent terminates or withdraws his or her registration with a broker-dealer or issuer, a subsequent application by the agent for registration is treated as:
- (i) An initial registration; and
- (ii) A notification by the agent of termination or withdrawal of the previous registration or application.
- (B) If an agent terminates or withdraws his or her registration with a broker-dealer or issuer, a subsequent application by the agent for registration is treated as:
- (4) [Repealed.]
- (c) It is unlawful for a person to transact business in this state as an investment adviser or investment adviser representative without first being registered under this chapter unless the person:
- (1) Is registered as an investment adviser with the United States Securities and Exchange Commission under section 203 of the Investment Advisers Act of 1940, 15 U.S.C. § 80b-1 et seq., as it existed on January 1, 2013, and has filed with the commissioner or the commissioner's designee a notice filing consisting of:
- (A) A copy of documents on file with the United States Securities and Exchange Commission that the commissioner may by rule or order prescribe; and
- (B) The fee set forth in § 23-42-304(a)(3);
- (2) Is not registered as an investment adviser with the United States Securities and Exchange Commission under section 203 of the Investment Advisers Act of 1940, 15 U.S.C. § 80b-1 et seq., as it existed on January 1, 2013, because the person is not an investment adviser under section 202(a)(11) of the Investment Advisers Act of 1940, 15 U.S.C. § 80b-1 et seq., as it existed on January 1, 2013;
- (3) Is a "representative" of an investment adviser registered with the United States Securities and Exchange Commission under section 203 of the Investment Advisers Act of 1940, 15 U.S.C. § 80b-1 et seq., as it existed on January 1, 2013, and has no place of business located in this state; or
- (4) Is a supervised person of an investment adviser registered with the United States Securities and Exchange Commission, but is not an investment adviser representative as defined by Rule 203A-3 of the rules and regulations of the Investment Advisers Act of 1940, 17 C.F.R. § 275, as they existed on January 1, 2013.
- (1) Is registered as an investment adviser with the United States Securities and Exchange Commission under section 203 of the Investment Advisers Act of 1940, 15 U.S.C. § 80b-1 et seq., as it existed on January 1, 2013, and has filed with the commissioner or the commissioner's designee a notice filing consisting of:
- (d)
- (1) A notice filing required by subdivision (c)(1) of this section becomes effective upon receipt by the commissioner or the commissioner's designee of the notice filing, consent to service of process, and the appropriate fee.
- (2)
- (A) The registration and notice filing required by subdivision (c)(1) of this section expires December 31 of each year unless renewed.
- (B) Effective upon the commissioner's receipt of notification, an investment adviser may terminate the investment adviser's notice filing under subdivision (c)(1) of this section by providing the commissioner notification of the termination.
- (e) A broker-dealer or investment adviser shall not conduct business from a branch office within this state unless the branch office is registered under this chapter.
- (f)
- (1) A broker-dealer shall establish, maintain, and enforce a system to supervise the activities of its agents and employees that is reasonably designed to achieve compliance with this chapter, the rules and orders of the commissioner, all other applicable state and federal securities laws, and the rules of self-regulatory organizations.
- (2) A broker-dealer's supervisory system shall include without limitation the:
- (A) Establishment and maintenance of written procedures designed to achieve compliance with subdivision (f)(1) of this section; and
- (B) Appointment of at least one (1) agent of the broker-dealer, who is registered in Arkansas and meets the qualifications and performs the supervisory responsibilities of the broker-dealer for activities in this state under rules established by the commissioner.
- (g)
- (1) An investment adviser shall establish, maintain, and enforce a system to supervise the activities of its representatives and employees that is reasonably designed to achieve compliance with this chapter, the rules and orders of the commissioner, all other applicable state and federal securities laws, and the rules of self-regulatory organizations.
- (2) An investment adviser's supervisory system shall include without limitation the:
- (A) Establishment and maintenance of written procedures designed to achieve compliance with subdivision (g)(1) of this section; and
- (B) Appointment of at least one (1) representative of the investment adviser, who is registered in Arkansas and meets the qualifications and performs the supervisory responsibilities of the investment adviser for activities in this state under rules established by the commissioner.
- (h) The commissioner may by rule establish concurrent registration with a broker-dealer, issuer, or investment adviser or any combination of broker-dealers, issuers, and investment advisers.
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