2014 New Hampshire Revised Statutes
Title XXXVIII - SECURITIES
Chapter 421-B - SECURITIES
Section 421-B:6 - Licensing Requirements.

    421-B:6 Licensing Requirements. –
    I. It is unlawful for any person to transact business in this state as a broker-dealer, issuer-dealer, investment adviser, or agent unless such person is licensed under this chapter. Except with respect to advisers whose only clients are those described in RSA 421-B:2, IX(f), it is unlawful for any federal covered adviser to conduct advisory business in this state unless such person complies with the provisions of RSA 421-B:7, I-b. An investment adviser representative is required to be licensed as an agent under this section, in addition to any agent license held as a representative of any broker-dealer.
    I-a. In connection with an offering of securities made pursuant to section 18(b)(4)(D) of the Securities Act of 1933 that requires only a notice filing in this state pursuant to RSA 421-B:11, I-a(e), a completed application for licensure as an issuer-dealer, an agent of an issuer-dealer and for an agent of the issuer, or authorization without licensure for an officer or director described in RSA 421-B:2, II(e), shall be filed with the secretary of state no later than 15 days after the first sale of securities in or from this state, and the license or authorization will become effective without further action or review by the secretary of state. Provided that the application is complete and accompanied by the appropriate fees, the effective date of the license or authorization shall for all purposes be the date of first sale.
    I-b. The issuer-dealer applications referred to in paragraph I-a shall set forth and be limited to the name of the issuer, the state of the issuer's formation, a description of the securities sold, the date of first sale of such securities in or from this state, the name or names of the representative or representatives of the issuer who are engaged in the sale of the securities, and confirmation that no agent has been convicted of a felony. The applications need only be signed by that person or those persons who are authorized to do so by the issuer's board of directors or other governing body. At the same time, the issuer shall submit a consent to service of process pursuant to RSA 421-B:30, VII, and shall pay the fees required by RSA 421-B:31. Each application shall be on a form prescribed by the secretary of state, consistent with the provisions of this section.
    II. It is unlawful for any broker-dealer, issuer-dealer, and investment adviser to employ an agent unless the agent is licensed, or for a federal covered adviser to employ, supervise, or associate with an investment adviser representative having a place of business located in this state, unless such investment adviser representative is licensed as an agent under this chapter, or is exempt from the licensing requirements. Under this chapter, an agent's license is only in effect when such agent is associated with a particular broker-dealer, investment adviser, federal covered adviser, issuer-dealer, or a particular issuer. No agent shall at any time represent more than one broker-dealer or issuer-dealer, except that where broker-dealers or issuer-dealers affiliated by direct common control are licensed under this chapter, an agent may represent any such broker-dealer or issuer-dealer. When an agent begins or terminates those activities that make the person an agent, the broker-dealer, issuer-dealer, federal covered adviser, and investment adviser shall promptly notify the secretary of state. When an investment adviser representative begins or terminates employment with a federal covered adviser, the investment adviser representative shall promptly notify the secretary of state.
    II-a. No person shall be issued an issuer-dealer license unless at least one person engaged in offering securities for sale on behalf of the issuer-dealer is licensed as an issuer-dealer agent.
    III. All licenses for agents, broker-dealers, investment advisers, and issuer-dealers or notice filings for federal covered advisers shall expire every year on December 31.
    III-a. A federal covered adviser who has paid a notice filing fee in this state for a particular calendar year and subsequently during that year becomes a state regulated investment adviser licensed in this state, shall not be assessed an additional fee (initial license fee) as it makes the transition to a licensed investment adviser in that year. A state regulated investment adviser who has paid a license fee in this state for a particular calendar year and subsequently during that year becomes a federal covered adviser, shall not be assessed an additional fee (notice filing fee) for the transition to a federal covered adviser in that year.
    IV. All licensed agents, broker-dealers, investment advisers, federal covered advisers, and issuer-dealers and any persons applying for such licenses shall be liable for the fees established pursuant to RSA 421-B:31.
    V. (a) Prior to opening or closing a branch office in this state, a broker-dealer or investment adviser shall send written notification directly to the secretary of state of the location of the branch office, telephone number, name of the individual supervising the office, the date of the opening or closing, and any other pertinent information required by the secretary of state.
       (b)(1) It is prohibited for any branch office or agent of a broker-dealer or investment adviser to conduct a securities or investment advisory business in this state under any name other than that of the broker-dealer or investment adviser with which the branch office is associated or agent is licensed.
          (2) If more than one business enterprise is conducted from a branch office location, disclosures shall clearly set forth the name of each business enterprise, what business activity is conducted by each organization, and each licensed agent's relationship to each organization; provided, however, that this requirement shall not apply to television, radio, or billboard advertising that pertains exclusively to a non-securities product.
       (c)(1) Each broker-dealer branch office within this state shall be supervised by a manager who is a licensed agent in New Hampshire and who shall have qualified as a principal by passing a National Association of Securities Dealers principal's examination applicable to the licensee's business conducted at that location.
          (2) Each broker-dealer and investment adviser shall establish and maintain supervisory procedures that are reasonably designed to achieve compliance with all applicable securities laws and statutes. The responsibility for such supervisory procedure shall be determined by various factors, including but not limited to:
             (A) The firm's size, organizational structure, and scope of business activities, and the number and location of offices.
             (B) The nature and complexity of procedures and services offered.
             (C) The volume of business conducted.
             (D) The number of agents and investment advisors assigned to a location.
             (E) Whether a location has an on-site principal.
             (F) Whether the office is a non-branch location.
             (G) The disciplinary history of its agents and investment adviser representatives.
    VI. The following sales of securities shall not constitute acts requiring licensure as a broker-dealer, issuer-dealer, or issuer-dealer agent:
       (a) Sales of securities made pursuant to qualified pension plans, qualified profit-sharing plans, and dividend reinvestment plans.
       (b) Sales of securities of a corporation to its officers, its directors, and sales made pursuant to RSA 421-B:17, I(h).
       (c) Sales or distributions of securities to majority owned subsidiaries.
    VII. The following sales of securities shall not constitute acts requiring licensure as an issuer-dealer: RSA 421-B:17, I(a); (b); (h); (i); (j); (k); and II(a); (b); (d); (e); (f); (g); (j); (k); (l); (m); (n); (o); (p)(1); and (q).
    VII-a. The secretary of state shall have the authority to issue orders exempting otherwise non-exempt sales of securities from the issuer-dealer and issuer-dealer agent licensing requirements of RSA 421-B:6 if the secretary of state determines:
       (a) That all or substantially all of the proposed sales of securities fall within one or more of the exemptions set forth in:
          (1) RSA 421-B:17; or
          (2) RSA 421-B:6; and
       (b) That granting the exemption will be consistent with the purposes fairly intended by the policy and provisions of this title.
    VII-b. (a) The use of a senior-specific certification or designation by any person in connection with the offer, sale, or purchase of securities, or the provision of advice as to the value of, or the advisability of investing in, purchasing, or selling securities, either directly or indirectly or through publications or writings, or by issuing or promulgating analyses or reports relating to securities, that indicates or implies that the user has special certification or training in advising or servicing senior citizens or retirees, in such a way as to mislead any person shall be a dishonest and unethical practice in the securities business within the meaning of RSA 421-B:10, I(b)(7). The prohibited use of such certifications or professional designation includes, but is not limited to, the following:
          (1) Use of a certification or professional designation by a person who has not actually earned, or is otherwise ineligible to use such certification or designation;
          (2) Use of a nonexistent or self-conferred certification or professional designation;
          (3) Use of a certification or professional designation that indicates or implies a level of occupational qualifications obtained through education, training, or experience that the person using the certification or professional designation does not have; and
          (4) Use of a certification or professional designation that was obtained from a designating or certifying organization that:
             (A) Is primarily engaged in the business of instruction in sales or marketing;
             (B) Does not have reasonable standards or procedures for assuring the competency of its designees or certificants;
             (C) Does not have reasonable standards or procedures for monitoring and disciplining its designees or certificants for improper or unethical conduct; or
             (D) Does not have reasonable continuing education requirements for its designees or certificants in order to maintain the designation or certificate.
       (b) There is a rebuttable presumption that a designating or certifying organization is not disqualified solely for purposes of RSA 421-B:6, VII-b(a)(4) when the organization has been accredited by:
          (1) The American National Standards Institute; or
          (2) The National Commission for Certifying Agencies; or
          (3) An organization that is on the United States Department of Education's list entitled "Accrediting Agencies Recognized for Title IV Purposes'' and the designation or credential issued therefrom does not primarily apply to sales and/or marketing.
       (c) In determining whether a combination of words or an acronym standing for a combination of words constitutes a certification or professional designation indicating or implying that a person has special certification or training in advising or servicing senior citizens or retirees, factors to be considered shall include:
          (1) Use of one or more words such as "senior,'' "retirement,'' "elder,'' or like words, combined with one or more words such as "certified,'' "registered,'' "chartered,'' "adviser,'' "specialist,'' "consultant,'' "planner,'' or like words, in the name of the certification or professional designation; and
          (2) The manner in which those words are combined.
       (d) For purposes of this subparagraph; "financial services regulatory agency'' includes, but is not limited to, an agency that regulates broker-dealers, investment advisers, or investment companies as defined under the Investment Company Act of 1940. For the purposes of this paragraph, a certification or professional designation does not include a job title within an organization that is licensed or registered by a state or federal financial services regulatory agency, when that job title:
          (1) Indicates seniority or standing within the organization; or
          (2) Specifies an individual's area of specialization within the organization.
       (e) Nothing in this paragraph shall limit the secretary of state's authority to enforce existing provisions of law.
    VIII. (a) A broker-dealer that is resident in Canada and has no office or other physical presence in this state may, provided the broker-dealer is licensed in accordance with this section, effect transactions in securities with or for, or induce or attempt to induce the purchase or sale of any security by:
          (1) A person from Canada who is temporarily resident in this state, with whom the Canadian broker-dealer had a bona fide broker-dealer-client relationship before the person entered the United States; or
          (2) A person from Canada who is resident in this state, whose transactions are in a self-directed tax advantaged retirement plan in Canada of which the person is the holder or contributor.
       (b) An agent who will be representing a Canadian broker-dealer licensed under this section may, provided the agent is licensed in accordance with this section, effect transactions in securities in this state as permitted for the broker-dealer in subparagraph (a).
       (c) A Canadian broker-dealer may become licensed under this section, provided that the broker-dealer:
          (1) Files an application in the form required by the jurisdiction in which it has its head office;
          (2) Files a consent to service of process;
          (3) Is registered as a broker or dealer in good standing in the jurisdiction from which it is effecting transactions into this state and files evidence thereof; and
          (4) Is a member of a self-regulatory organization or stock exchange in Canada.
       (d) An agent who will be representing a Canadian broker-dealer licensed under this section in effecting transactions in securities in this state may become licensed under this section, provided that the agent:
          (1) Files an application in the form required by the jurisdiction in which the broker-dealer has its head office;
          (2) Files a consent to service of process; and
          (3) Is registered in good standing in the jurisdiction from which he or she is effecting transactions into this state and files evidence thereof.
       (e) If no denial order is in effect and no proceeding is pending under this chapter, the license becomes effective on the thirtieth day after an application is filed unless earlier made effective.
       (f) A Canadian broker-dealer licensed under this section shall:
          (1) Maintain its provincial or territorial registration and its membership in a self-regulatory organization or stock exchange in good standing;
          (2) Provide the secretary of state upon request with its books and records relating to its business in this state as a broker-dealer;
          (3) Inform the secretary of state forthwith of any criminal action taken against the broker-dealer or its agent or of any finding or sanction imposed on the broker-dealer as a result of any self-regulatory or regulatory action involving fraud, theft, deceit, misrepresentation, or similar conduct; and
          (4) Disclose to its clients in the state that the broker-dealer and its agents are not subject to the full regulatory requirements in this chapter.
       (g) An agent of a Canadian broker-dealer licensed under this section shall:
          (1) Maintain his or her provincial or territorial registration in good standing;
          (2) Inform the secretary of state forthwith of any criminal action, taken against him or her, or of any finding or sanction imposed on the agent as a result of any self-regulatory or regulatory action involving fraud, theft, deceit, misrepresentation, or similar conduct.
       (h) Renewal applications for Canadian broker-dealers and agents under this section shall be filed before December 1 each year and may be made by filing the most recent renewal application, if any, filed in the jurisdiction in which the broker-dealer has its head office, or if no such renewal application is required, the most recent application filed pursuant to subparagraph (c)(1) or subparagraph (d)(1), as the case may be.
       (i) Every applicant for a license or renewal of a license under this section shall pay the fee for broker-dealers and agents as required under RSA 421-B:31.
       (j) A Canadian broker-dealer or agent licensed under this section shall only effect transactions in this state:
          (1) As permitted in subparagraph (a) or (b);
          (2) With or through (i) the issuers of the securities involved in the transactions, (ii) other broker-dealers, and (iii) banks, savings institutions, trust companies, insurance companies, investment companies as defined in the Investment Company Act of 1940, pension or profit-sharing trusts or other financial institutions or institutional buyers, whether acting for themselves or as trustees; and
          (3) As otherwise permitted by this chapter.
       (k) A Canadian broker-dealer or agent licensed under this section and acting in accordance with the limitations set out in subparagraph (j) is exempt from all of the requirements of this chapter, except the anti-fraud provisions and the requirements set out in this section. Such Canadian broker-dealer or agent may only have its license under this section denied, suspended or revoked for a breach of the anti-fraud provisions of this chapter or the requirements in this section.
    IX. Under the provisions of NSMIA and this chapter, until October 11, 1999, if a federal covered adviser fails to or refuses to pay fees pursuant to RSA 421-B:31 prior to acting as a federal covered adviser in this state, licensure as an investment adviser of such federal covered adviser shall be required in this state.

Source. 1981, 214:1. 1985, 334:2. 1987, 411:2. 1989, 20:1. 1991, 355:89, II. 1992, 288:38. 1994, 388:4. 1996, 239:21. 1997, 112:2; 296:9. 2001, 194:1, 2; 260:4-6. 2005, 224:1, eff. Jan. 1, 2006. 2006, 245:5-7, eff. July 1, 2006. 2007, 104:2, eff. July 1, 2007. 2008, 332:1, eff. Jan. 1, 2009.