2012 Connecticut General Statutes
Title 36b - Connecticut Securities Law and Business Opportunity Investment Act
Chapter 672a - Uniform Securities Act
Section 36b-6 - (Formerly Sec. 36-474). Broker-dealer, agent or investment adviser required to register. Exemptions. Branch offices. Notice re termination of business.

(a) No person shall transact business in this state as a broker-dealer unless such person is registered under sections 36b-2 to 36b-34, inclusive. No person shall transact business in this state as a broker-dealer in contravention of a sanction that is currently effective imposed by the Securities and Exchange Commission or by a self-regulatory organization of which such person is a member if the sanction would prohibit such person from effecting transactions in securities in this state. No individual shall transact business as an agent in this state unless such individual is (1) registered as an agent of the broker-dealer or issuer whom such individual represents in transacting such business, or (2) an associated person who represents a broker-dealer in effecting transactions described in subdivisions (2) and (3) of Section 15(h) of the Securities Exchange Act of 1934. No individual shall transact business in this state as an agent of a broker-dealer in contravention of a sanction that is currently effective imposed by the Securities and Exchange Commission or a self-regulatory organization of which the employing broker-dealer is a member if the sanction would prohibit the individual employed by such broker-dealer from effecting transactions in securities in this state.

(b) No issuer shall employ an agent unless such agent is registered under sections 36b-2 to 36b-34, inclusive. No broker-dealer shall employ an agent unless such agent is (1) registered under sections 36b-2 to 36b-34, inclusive, or (2) an associated person who represents a broker-dealer in effecting transactions described in subdivisions (2) and (3) of Section 15(h) of the Securities Exchange Act of 1934. The registration of an agent is not effective during any period when such agent is not associated with a particular broker-dealer registered under sections 36b-2 to 36b-34, inclusive, or a particular issuer. When an agent begins or terminates a connection with a broker-dealer or issuer, or begins or terminates those activities which make such individual an agent, both the agent and the broker-dealer or issuer shall promptly notify the commissioner.

(c) (1) No person shall transact business in this state as an investment adviser unless registered as such by the commissioner as provided in sections 36b-2 to 36b-34, inclusive, or exempted pursuant to subsection (e) of this section. No person shall transact business, directly or indirectly, in this state as an investment adviser if the registration of such investment adviser is suspended or revoked or, in the case of an investment adviser who is an individual, the investment adviser is barred from employment or association with an investment adviser or broker-dealer by order of the commissioner, the Securities and Exchange Commission or a self-regulatory organization.

(2) No individual shall transact business in this state as an investment adviser agent unless such individual is registered as an investment adviser agent of the investment adviser for which such individual acts in transacting such business. An investment adviser agent registered under sections 36b-2 to 36b-34, inclusive, who refers advisory clients to another investment adviser registered under said sections 36b-2 to 36b-34, inclusive, or to an investment adviser registered with the Securities and Exchange Commission that has filed a notice under subsection (e) of this section, is not required to register as an investment adviser agent of such investment adviser if the only compensation paid for such referral services is paid to the investment adviser with whom the individual is employed or associated. No individual shall transact business, directly or indirectly, in this state as an investment adviser agent on behalf of an investment adviser if the registration of such individual as an investment adviser agent is suspended or revoked or the individual is barred from employment or association with an investment adviser by an order of the commissioner, the Securities and Exchange Commission or a self-regulatory organization.

(3) No investment adviser shall engage an investment adviser agent unless such investment adviser agent is registered under sections 36b-2 to 36b-34, inclusive. The registration of an investment adviser agent is not effective during any period when such investment adviser agent is not associated with a particular investment adviser. When an investment adviser agent begins or terminates a connection with an investment adviser, both the investment adviser agent and the investment adviser shall promptly notify the commissioner. If an investment adviser or investment adviser agent provides such notice, such investment adviser or investment adviser agent shall not be liable for the failure of the other to give such notice.

(d) No broker-dealer or investment adviser shall transact business from any place of business located within this state unless that place of business is registered as a branch office with the commissioner pursuant to this subsection. An application for branch office registration shall be made on forms prescribed by the commissioner and shall be filed with the commissioner, together with a nonrefundable application fee of one hundred dollars per branch office. A broker-dealer or investment adviser shall promptly notify the commissioner in writing if such broker-dealer or investment adviser (1) engages a new manager at a branch office in this state, (2) acquires a branch office of another broker-dealer or investment adviser in this state, or (3) relocates a branch office in this state. In the case of a branch office acquisition or relocation, such broker-dealer or investment adviser shall pay to the commissioner a nonrefundable fee of one hundred dollars. Each registrant or applicant for branch office registration shall pay the actual cost, as determined by the commissioner, of any reasonable investigation or examination made of such registrant or applicant by or on behalf of the commissioner.

(e) The following investment advisers are exempted from the registration requirements under subsection (c) of this section: Any investment adviser that (1) is registered or required to be registered under Section 203 of the Investment Advisers Act of 1940; (2) is excepted from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940; or (3) has no place of business in this state and, during the preceding twelve months, has had no more than five clients who are residents of this state. Any investment adviser claiming an exemption pursuant to subdivision (1) of this subsection that is not otherwise excluded under subsection (11) of section 36b-3, shall first file with the commissioner a notice of exemption together with a consent to service of process as required by subsection (g) of section 36b-33 and shall pay to the commissioner or to any person designated by the commissioner in writing to collect such fee on behalf of the commissioner a nonrefundable fee of two hundred fifty dollars. The notice of exemption shall contain such information as the commissioner may require. Such notice of exemption shall be valid until December thirty-first of the calendar year in which it was first filed and may be renewed annually thereafter upon submission of such information as the commissioner may require together with a nonrefundable fee of one hundred fifty dollars. If any investment adviser that is exempted from registration pursuant to subdivision (1) of this subsection fails or refuses to pay any fee required by this subsection, the commissioner may require such investment adviser to register pursuant to subsection (c) of this section. For purposes of this subsection, a delay in the payment of a fee or an underpayment of a fee which is promptly remedied shall not constitute a failure or refusal to pay such fee.

(f) Any broker-dealer or investment adviser ceasing to transact business at any branch office or main office in this state shall, in addition to providing written notice to the commissioner prior to the termination of business activity at that office, (1) provide written notice to each customer or client serviced by such office at least ten business days prior to the termination of business activity at that office, or (2) demonstrate to the commissioner, in writing, the reasons why such notice to customers or clients cannot be provided within the time prescribed. If the commissioner finds that the broker-dealer or investment adviser cannot provide notice to customers or clients at least ten business days prior to the termination of business activity, the commissioner may exempt the broker-dealer or investment adviser from giving such notice. The commissioner shall act upon a request for such exemption within five business days following receipt by the commissioner of the written request for such an exemption. The notice to customers or clients shall contain the following information: The date and reasons why business activity will terminate at the office; if applicable, a description of the procedure the customer or client may follow to maintain the customer’s account at any other office of the broker-dealer or investment adviser; the procedure for transferring the customer’s or client’s account to another broker-dealer or investment adviser; and the procedure for making delivery to the customer or client of any funds or securities held by the broker-dealer or investment adviser.

(g) Any broker-dealer or investment adviser ceasing to transact business at any branch office or main office in this state as a result of executing an agreement and plan of merger or acquisition shall provide written notice to the commissioner and to each customer or client serviced by such office not later than the date such merger or acquisition is completed. The notice provided to each customer or client shall contain the information specified in subsection (f) of this section.

(h) Any broker-dealer or investment adviser ceasing to transact business at any branch office or main office in this state as a result of the commencement of a bankruptcy proceeding by such broker-dealer or investment adviser or by a creditor or creditors of such broker-dealer or investment adviser shall, immediately upon the filing of a petition with the bankruptcy court, provide written notice to the commissioner. The commissioner shall determine the time and manner in which notice shall be provided to each customer or client serviced by such office.

(i) (1) A broker-dealer or investment adviser may succeed to the current registration of another broker-dealer or investment adviser or to a notice filing of an investment adviser registered with the Securities and Exchange Commission, and an investment adviser registered with the Securities and Exchange Commission may succeed to the current registration of an investment adviser or to a notice filing of another investment adviser registered with the Securities and Exchange Commission, by filing as a successor an application for registration pursuant to section 36b-7 or a notice pursuant to subsection (e) of this section for the unexpired portion of the current registration or notice filing and paying the fee required by subsection (a) of section 36b-12.

(2) A broker-dealer or investment adviser that changes its form of organization or state of incorporation or organization may continue its registration by filing an amendment to its registration if the change does not involve a material change in its management. The amendment shall become effective when filed or on a date designated by the registrant in its filing. The new organization shall be a successor to the original registrant for the purposes of sections 36b-2 to 36b-34, inclusive. If there is a material change in management, the broker-dealer or investment adviser shall file a new application for registration. A predecessor registered under sections 36b-2 to 36b-34, inclusive, shall stop conducting its securities business or investment advisory business other than winding down transactions and shall file for withdrawal of its broker-dealer or investment adviser registration not later than forty-five days after filing its amendment to effect succession.

(3) A broker-dealer or investment adviser that changes its name may continue its registration by filing an amendment to its registration. The amendment shall become effective when filed or on a date designated by the registrant.

(4) The commissioner may, by regulation adopted, in accordance with chapter 54, or order, prescribe the means by which a change of control of a broker-dealer or investment adviser may be made.

(5) Nothing in this subsection shall relieve a registrant of its obligation to pay agent and investment adviser agent transfer fees as described in subsection (d) of section 36b-12.

(j) The commissioner may, by regulation adopted, in accordance with chapter 54, or order, require an agent or investment adviser agent to participate in a continuing education program approved by the Securities and Exchange Commission and administered by a self-regulatory organization or, in the absence of such a program, the commissioner may require continuing education for registered investment adviser agents by regulation or order.

(k) For purposes of subsections (d), (f), (g) and (h) of this section, “investment adviser” means an investment adviser registered or required to be registered with the commissioner.

(l) The commissioner may by rule, regulation or order, conditionally or unconditionally, exempt from the requirements of this section any person or class of persons upon a finding that such exemption is in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of this chapter.

(P.A. 77-482, S. 5; P.A. 81-292, S. 3; P.A. 83-368, S. 3, 11; P.A. 85-169, S. 3, 11; P.A. 87-375, S. 2; P.A. 89-220, S. 2; P.A. 97-220, S. 3, 15; P.A. 98-162, S. 3; P.A. 04-45, S. 1; P.A. 05-177, S. 2; P.A. 10-141, S. 5, 6; P.A. 11-110, S. 11; 11-216, S. 49.)

History: P.A. 81-292 inserted a new Subsec. (c) providing that offers or sales of securities relating to oil, gas or other mining commodities must be made through a registered broker-dealer, and relettered the former Subsec. (c) accordingly; P.A. 83-368 deleted the provisions of former Subsec. (c) re offers or sales with respect to oil, gas or mining limited partnerships, relettering former Subsec. (d) accordingly; P.A. 85-169 added Subsecs. (d), (e) and (f) re notice of termination of business; P.A. 87-375 amended Subsec. (c) to add provisions re connections between investment advisors and agents and to require that agents be registered; P.A. 89-220 amended Subsec. (a) by requiring an agent to register as an agent of a particular broker-dealer or issuer, amended Subsec. (c) by requiring an investment advisor agent to register as an investment advisor agent of a particular investment advisor, added a new Subsec. (d) re registration of branch offices and relettered the remaining Subsecs. accordingly, amending Subsecs. (e), (f) and (g) by extending the requirements of the subsections to investment advisors; Sec. 36-474 transferred to Sec. 36b-6 in 1995; P.A. 97-220 amended Subsecs. (a) and (b) by adding exception for associated persons representing broker-dealers in effecting specified transactions, amended Subsec. (c) by adding reference to Subsec. (e) and making a technical change, added new Subsec. (e) re exemptions from investment adviser registration requirements, redesignated former Subsecs. (e), (f) and (g) as Subsecs. (f), (g) and (h), and made Subsecs. (f), (g) and (h) applicable to any broker-dealer or investment adviser ceasing to transact business at any office in this state, effective July 1, 1997; P.A. 98-162 amended Subsec. (d) to establish branch office requirements for investment advisers registered with the Securities and Exchange Commission and to make technical changes; P.A. 04-45 amended Subsec. (a) to prohibit transaction of business in this state as a broker-dealer or agent in contravention of a sanction currently effective imposed by SEC or a self-regulatory organization and to make technical changes, amended Subsecs. (b) and (c) to make technical changes, amended Subsec. (d) to eliminate provisions re investment advisers registered with SEC, amended Subsec. (f) to make technical changes, and added Subsec. (i) defining “investment adviser” for purposes of Subsecs. (d), (f), (g) and (h); P.A. 05-177 amended Subsec. (a) to delete provisions re self-regulatory organization registered under federal laws administered by Securities and Exchange Commission, amended Subsec. (c) to insert Subdiv. designators (1) to (3), make technical changes, prohibit persons from transacting business in this state as an investment adviser if the registration of such investment adviser is suspended or revoked or, in the case of an investment adviser who is an individual, the investment adviser is barred from employment or association with an investment advisor or broker-dealer by order of commissioner, the Securities and Exchange Commission or a self-regulatory organization in Subdiv. (1), provide that a registered investment adviser agent who refers advisory clients to another registered investment adviser does not have to register as an investment adviser agent of such investment adviser if the only compensation paid for such referral services is to the investment adviser with whom the individual is employed or associated and prohibit individuals from transacting business in this state as an investment adviser agent on behalf of an investment adviser if the registration of such individual as an investment adviser agent is suspended or revoked or the individual is barred from employment or association with an investment adviser by order of commissioner, the Securities and Exchange Commission or a self-regulatory organization in Subdiv. (2), amended Subsec. (e) to make technical changes and to provide that nonrefundable fee of $250 be paid to commissioner or to any person designated by commissioner in writing to collect such fee on behalf of commissioner, amended Subsecs. (f) to (h) to substitute “any branch office or main office in this state” for “any office in this state”, inserted new Subsec. (i) re procedure for broker-dealers or investment advisers to succeed to the current registration of another broker-dealer or investment adviser or to a notice filing of a registered investment adviser, procedures for broker-dealers or investment advisers to file an amendment to their registrations if they change their form of organization, state of incorporation, organization or name, and authority of commissioner to prescribe the means by which change of control of a broker-dealer or investment adviser may be made, added new Subsec. (j) authorizing commissioner to require an agent or investment adviser agent to participate in continuing education, and redesignated existing Subsec. (i) as Subsec. (k); P.A. 10-141 amended Subsecs. (a) to (c) and (i) by replacing references to Sec. 36b-33 with references to Sec. 36b-34, effective June 7, 2010; P.A. 11-110 added Subsec. (1) re criteria for conditional or unconditional exemption from requirements of section, effective July 21, 2011; P.A. 11-216 amended Subsec. (e) to delete references to exemption pursuant to Subdiv. (2), effective July 13, 2011.

Subsec. (a) and (d) cited. 39 CS 462.

Annotation to present section:

Cited. 233 C. 352.