2014 New Hampshire Revised Statutes
Title XXXVIII - SECURITIES
Chapter 421-B - SECURITIES
Section 421-B:7 - Licensing Procedure.

    421-B:7 Licensing Procedure. –
    I. (a) A broker-dealer, issuer-dealer, agent, or investment adviser may obtain an initial or renewal license by filing with the secretary of state or his or her designee an application together with the fees required by RSA 421-B:31 and a consent to service of process pursuant to RSA 421-B:30, VII, and paying any reasonable costs charged by the designee for processing such filings. The consent to service of process for investment adviser applicants shall consist of the appropriate execution page of the Form ADV. The application shall be on a form prescribed by the secretary of state and shall contain whatever information the secretary of state requires concerning such matters as, but not limited to, the applicant's form and place of organization; the applicant's proposed method of doing business; the qualifications and business history of the applicant; in the case of a broker-dealer, issuer-dealer, or investment adviser, the qualifications and business history of any partner, officer, or director, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling the broker-dealer, issuer-dealer, or investment adviser; and, in the case of an investment adviser, Form ADV, specimens of investment adviser contracts, and the qualifications and business history of any employee; any injunction or administrative order or conviction of a misdemeanor involving a security or any aspect of the securities business and any conviction of a felony; and the applicant's financial condition and history. The secretary of state may by rule or order require an applicant for initial license to publish an announcement of the application in one or more specified newspapers published in this state. If no denial order is in effect and no proceeding is pending under RSA 421-B:10, licensing becomes effective at noon of the thirtieth day after an application is filed. The secretary of state may by rule or order specify an earlier effective date, and may by order defer the effective date until noon of the thirtieth day after filing of any amendment.
       (b) (1) No person shall be issued a broker-dealer license unless one person occupying a supervisory position has successfully passed a principal examination appropriate for the business conducted by the broker-dealer and has actively engaged in the securities business as a licensed principal in a similar supervisory capacity for a minimum of 3 of the preceding 5 years.
          (2) No person shall be issued a broker-dealer license if any control person of such person was an officer, supervisor, or owner of 10 percent or more of the securities of any firm liquidated under the Securities Investor Protection Act of 1970.
    I-a. Unless otherwise provided, all investment adviser and investment adviser representative applications, renewals, amendments, reports, notices, related filings and fees required to be filed with the secretary of state pursuant to this chapter and rules adopted thereunder, shall be filed electronically with and transmitted to Investment Adviser Registration Depository (hereinafter referred to as the IARD). The following additional conditions relate to such electronic filings:
       (a) When a signature or signatures are required by the particular instructions of any filing to be made through IARD, a duly authorized officer of the applicant and/or the applicant himself or herself, as required, shall affix his or her electronic signature to the filing by typing his or her name in the appropriate fields and submitting the filing to IARD. Submission of a filing in this manner shall constitute irrefutable evidence of legal signature by any individuals whose names are typed on the filing.
       (b) Solely for purposes of a filing made through IARD, a document is considered filed with the secretary of state when all fees are received and the filing is accepted by IARD on behalf of the state.
       (c) (1) Any documents or fees required to be filed with the secretary of state that are not permitted to be filed with or cannot be accepted by IARD shall be filed directly with the secretary of state. The application shall not be complete until all documents and fees required by this chapter and rules adopted thereunder have been submitted through the IARD, where possible, or submitted to and received directly by the secretary of state.
          (2) The following documents shall be required to be filed directly with the secretary of state:
             (A) A financial statement which shall be audited, or, in the instance where no audited financial statement is in existence, certified by the appropriate person as presenting fairly in all material respects, the financial condition of the firm.
             (B) A copy of the applicant's articles of incorporation, if a corporation, or other business formation documents, if the applicant is any other form of business entity.
             (C) Until IARD provides for the filing of the second part of Form ADV, currently designated Part II, the second part of Form ADV.
       (d) There shall be 2 "hardship exemptions'' from the requirements to make electronic filings as required by this section:
          (1) Temporary hardship exemption:
             (A) Investment advisers licensed or required to be licensed under this chapter who experience unanticipated technical difficulties that prevent submission of an electronic filing to IARD may request a temporary hardship exemption from the requirements to file electronically.
             (B) To request a temporary hardship exemption, the investment adviser shall:
                (i) File Form ADV-H (17 CFR 279.3) in paper format with the administrator where the investment adviser's principal place of business is located, no later than one business day after the filing that is the subject of the Form ADV-H was due; and
                (ii) Submit the filing that is the subject of the Form ADV-H in electronic format to IARD no later than 7 business days after the filing was due.
             (C) The temporary hardship exemption will be deemed effective upon receipt by the secretary of state of the complete Form ADV-H. Multiple temporary hardship exemption requests within the same calendar year may be disallowed by the secretary of state.
          (2) Continuing hardship exemption:
             (A) A continuing hardship exemption shall be granted only if the investment adviser is able to demonstrate that the electronic filing requirements of this rule are prohibitively burdensome.
             (B) To apply for a continuing hardship exemption, the investment adviser shall:
                (i) File Form ADV-H (17 CFR 279.3) in paper format with the secretary of state at least 20 business days before filing is due; and
                (ii) If a filing is due to more than one administrator, the Form ADV-H shall be filed with the administrator where the investment adviser's principal place of business is located. The administrator who receives the application shall grant or deny the application within 10 business days after the filing of Form ADV-H.
             (C) An exemption is effective upon approval by the secretary of state. The time period of the exemption may be no longer than one year after the date on which the Form ADV-H is filed. If the secretary of state approves the application, the investment adviser shall, no later than 5 business days after the exemption approval date, submit filings to IARD in paper format (along with the appropriate processing fees) for the period of time for which the exemption is granted.
          (3) The decision to grant or deny a request for a hardship exemption shall be made by the administrator where the investment adviser's principal place of business is located, which decision shall be followed by the secretary of state.
       (e) (1) An investment adviser shall file with IARD, in accordance with the instructions in the Form ADV, any amendments to the investment adviser's Form ADV. 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 the amendment.
          (2) An investment adviser representative is under a continuing obligation to update information required by Form U-4 as changes occur. An investment adviser representative and the investment adviser shall file promptly with IARD any amendments to the representative's Form U-4.
          (3) Within 90 days of the end of the investment adviser's fiscal year, an investment adviser shall file an updated Form ADV with IARD.
       (f) (1) By June 30, 2001, each investment adviser licensed or required to be licensed under this chapter shall resubmit its Form ADV electronically (if it has not previously done so) with IARD unless it has been granted a hardship exemption under this section.
          (2) If the amendment to Form ADV is made after June 30, 2001, or at an earlier date if an investment adviser has filed its Form ADV (17 CFR 279.1), or any amendments to Form ADV, electronically with IARD, the licensee shall file amendments to Form ADV required by this paragraph electronically with IARD, unless it has been granted a hardship exemption under this paragraph.
       (g) By June 30, 2001, for each investment adviser representative licensed or required to be licensed under this chapter, Form U-4 must be resubmitted electronically if it has not previously been done with IARD, unless the investment adviser, filing on behalf of the investment adviser representative, has been granted a hardship exemption under this paragraph.
    I-b. Except with respect to federal covered advisers whose only clients are those described in RSA 421-B:2, IX(f), a federal covered adviser shall file with the secretary of state or his or her designee, prior to acting as a federal covered adviser in this state, a notice, which shall consist of a copy of the most recent complete Form ADV filed with the Securities and Exchange Commission (SEC) and a Form U-2, and shall pay initial and annual fees in accordance with RSA 421-B:31. Initial fees shall be paid before business is transacted in this state, and annual fees shall be paid on or before December 31 of the current year for the ensuing year. Federal covered advisers shall submit copies to the secretary of state of all documents filed with the Securities and Exchange Commission pursuant to the securities laws within 10 business days of their submission to the Securities and Exchange Commission. Documents and fees that are accepted by IARD may be submitted through IARD. Other documents filed or deemed filed with the SEC shall be submitted directly to the secretary of state. Until IARD provides for the filing of Part 2 of Form ADV, the secretary of state shall deem filed Part 2 of Form ADV if a federal covered adviser provides, within 5 days of a request, Part 2 of Form ADV to the secretary of state. Because the secretary of state deems Part 2 of the Form ADV to be filed, a federal covered adviser is not required to submit Part 2 of Form ADV to the secretary of state unless requested.
    I-c. (a) The application for withdrawal of licensure as an investment adviser pursuant to Section 204(e) of the Investment Advisers Act of 1940 shall be completed by following the instructions on Form ADV-W. (Notice of Withdrawal from Registration as Investment Adviser) (17 CFR 279.2) and filed upon Form ADV-W with IARD.
       (b) The application for withdrawal of licensure as an investment adviser representative pursuant to Section 204(e) of the Investment Advisers Act of 1940 shall be completed by following the instructions on Form U-5 (Uniform Termination Notice for Securities Industry Registration) and filed upon Form U-5 with IARD.
    II. A licensed broker-dealer or investment adviser may file an application for licensing of a successor, whether or not the successor is then in existence, for the unexpired portion of the term. There shall be no filing fee.
    II-a. The secretary of state may issue a limited license to a broker-dealer whose license is similarly restricted by the National Association of Securities Dealers.
    III. The secretary of state may, by rule or order, require a minimum capital for broker-dealers, subject to the limitations of section 15 of the Securities Exchange Act of 1934, and establish minimum financial requirements for investment advisers, subject to the limitations of section 222 of the Investment Advisers Act of 1940, which may include different requirements for those investment advisers who maintain custody of clients' funds or securities or who have discretionary authority over such funds or securities and those investment advisers who do not.
    IV. [Repealed.]
    V. The secretary of state may by rule prescribe standards of qualification with respect to training, experience and knowledge of the securities business and provide for examinations, which may be written or oral or both, to be taken by any class of or all applicants, as well as persons who represent or will represent an investment adviser, and the secretary of state may by order require an examination of a licensed broker-dealer, agent or investment adviser for due cause.
    VI. The secretary of state may, as an alternative means of licensing, under RSA 421-B:6 or in conjunction with this section, license agents, broker-dealers, or investment advisers by means of or through the facilities of a national organization which facilitates licensing on a nationwide basis.
    VII. (a) Each applicant for individual broker-dealer licensure or licensure as an agent of a broker-dealer shall provide the secretary of state with proof of obtaining a passing score on the Uniform Securities Agent State Law Examination (Series 63 examination) or the Uniform Combined State Law Examination (Series 66 examination).
       (b) Each applicant for individual investment adviser licensure, investment adviser agent licensure, or investment adviser representative licensure shall provide the secretary of state with proof of obtaining a passing score on one of the following examination requirements:
          (1) The Uniform Investment Adviser Law Examination (Series 65 examination); or
          (2) The General Securities Representative Examination (Series 7 examination) and the Uniform Combined State Law Examination (Series 66 examination).
       (c) (1) Any individual who was registered or licensed as an investment adviser, investment adviser agent, or investment adviser representative in any jurisdiction in the United States on January 1, 2000 shall not be required to satisfy the examination requirements for investment adviser licensure in this state, except that the secretary of state may require additional examinations for any individual found to have violated any state or federal securities law.
          (2) Any individual who has not been registered or licensed in any jurisdiction for a period of 2 years shall be required to comply with the examination requirements.
       (d)(1) The examination requirement shall not apply to an individual who upon application holds one of the following professional designations:
             (A) Certified Financial Planner (CFP) awarded by the Certified Financial Planner Board of Standards, Inc.;
             (B) Chartered Financial Consultant (ChFC) awarded by the American College, Bryn Mawr, Pennsylvania;
             (C) Personal Financial Specialist (PFS) awarded by the American Institute of Certified Public Accountants;
             (D) Chartered Financial Analyst (CFA) awarded by the Institute of Chartered Financial Analysts;
             (E) Chartered Investment Counselor (CIC) awarded by the Investment Advisor Association; or
             (F) Such other professional designation as the secretary of state may by rule or order recognize.
          (2) The examination requirements shall not apply to a solicitor that submits an application to the secretary of state containing:
             (A) A request for a waiver of the examination requirements;
             (B) A copy of the solicitation agreement described in RSA 421-B:2, XX-b(d);
             (C) A copy of the disclosure document of the investment adviser on whose behalf the solicitor solicits or refers clients disclosing the arrangements between the solicitor and the investment adviser; and
             (D) An undertaking that, prior to, or at the time of, entering into any investment advisory contract with a client, the investment adviser will obtain from such client a signed and dated acknowledgment of receipt of the investment adviser's written disclosure statement and acknowledgment that the investment advisory contract is being entered into pursuant to a solicitation arrangement with the solicitor as described in the investment adviser's written disclosure statement.
    VIII. Except for applicants subject to issuer-dealer licensing under RSA 421-B:6, I-a and I-b:
       (a) Applications for an issuer-dealer's license in New Hampshire may be obtained from and shall be filed at the office of the secretary of state.
       (b) Each applicant for a license under this paragraph shall make application on the appropriate state of New Hampshire form and shall supply the following information:
          (1) Name, address, and telephone number.
          (2) Date and place of incorporation or organization, and type of organization.
          (3) Principals, officers, directors, or managing agents.
          (4) References or letters of recommendation.
          (5) General business plan.
          (6) Type and amount of securities to be sold.
          (7) Signature of the general partner, or in the case of a corporation, the person or persons so authorized by corporate resolution.
       (c) In addition, each applicant shall submit a requisition for license of issuer-dealers agents on the appropriate form and shall supply the following information:
          (1) Name of corporation.
          (2) Name and address of all persons being appointed as issuer-dealer agents.
          (3) Signature of principal.
       (d) Each applicant shall submit to the department of safety with the requisite fees a completed criminal records release authorization form, signed by the applicant under penalty of perjury, notarized, and releasing criminal record information to the secretary of state.
       (e) In addition to the forms required by subparagraphs (b), (c), and (d), the application for an issuer-dealer's license shall consist of:
          (1) The articles of incorporation and by-laws of the issuer-dealer or the partnership agreement, certified by the appropriate person as complete current copies of the same.
          (2) A financial statement which shall be audited or, if no audited financial statement is in existence, certified by the appropriate person as a complete, accurate pro forma financial statement.
          (3) Copies of all circulars, prospectuses, or memoranda of the issue.
          (4) The appropriate fee pursuant to RSA 421-B:31.
       (f) Each applicant for licensure as an issuer-dealer shall appoint the secretary of state and his or her successors in office as its agent to receive service of all legal process issued against it in any civil action or proceeding in this state, and shall agree that process so served shall be valid and binding upon said applicant. The appointment shall be irrevocable. It shall bind said applicant and any successor in interest as to the assets or liabilities of said applicant, and it shall remain in effect as long as there are outstanding in this state any obligations or liability, or the potential for obligations or liability, resulting from the activities creating the need for the license.
       (g) The secretary of state shall issue an issuer-dealer license to the applicant if the following criteria have been met:
          (1) Timely filing of an application with the secretary of state complete in all respects.
          (2) Demonstration by the applicant of complete fulfillment of the requirements of RSA 421-B.
       (h) If an application for an original issuer-dealer license in the state of New Hampshire fails to meet the requirements of RSA 421-B, the secretary of state shall deliver to the applicant a written denial of the application, specifying the requirement which the applicant failed to meet and how the applicant is deficient. The notice of denial shall be issued according to procedures set forth in this chapter.
    IX. (a) Except for applicants subject to issuer-dealer licensing under RSA 421-B:6, I-a and I-b, applications for license as an issuer-dealer agent may be obtained and shall be filed at the office of the secretary of state.
       (b) Each applicant for a license under this paragraph shall provide a personal statement of agent on the appropriate state of New Hampshire form and shall supply the following:
          (1) Name, address, and date of birth.
          (2) Past and present occupations.
          (3) Name and address or employer, whether or not a member of the firm, and names of other firm partners.
          (4) Information regarding securities experience, employment, and licenses held, applied for, or denied.
          (5) A consent to service of process appointing the secretary of state as agent for service of process.
          (6) Signature of applicant.
       (c) The secretary of state shall issue an issuer-dealer agent's license to the applicant if the following criteria have been met:
          (1) Timely filing of an application with the secretary of state complete in all respects.
          (2) Demonstration by the applicant of complete fulfillment of the requirements of this chapter.
       (d) If an application for an original issuer-dealer agent's license in the state of New Hampshire fails to meet the requirements of RSA 421-B, the secretary of state shall deliver to the applicant a written denial of the application, specifying the requirement which the applicant failed to meet and how the applicant is deficient. The notice of denial shall be issued according to procedures set forth in this chapter.
    X. Except for applicants subject to issuer-dealer licensing under RSA 421-B:6, I-a and I-b:
       (a) Application for renewal of an issuer-dealer license shall be made by December 31 of each year to the secretary of state and shall include the fee prescribed by RSA 421-B:31.
       (b) Applications for renewal of an issuer-dealer agent's license in New Hampshire shall be made by December 31 of each year to the secretary of state and shall include the fee prescribed by RSA 421-B:31.
       (c) The secretary of state shall notify the applicant in writing as to how the renewal application is deficient. The applicant may then correct the deficiency or file with the secretary of state a written request for a hearing.
       (d) The secretary of state shall issue a renewal issuer-dealer or issuer-dealer agent's license to the applicant if the following criteria have been met:
          (1) Timely filing of an application with the secretary of state complete in all respects; and
          (2) Demonstration by the applicant of complete fulfillment of the requirements of this chapter.
       (e) The secretary of state may, at his or her discretion, issue duplicate or replacement issuer-dealer or issuer-dealer agent's licenses upon:
          (1) A written request therefor signed by the applicant.
          (2) Proof that good cause exists for the issuance of the duplicate or replacement license.
    XI. (a) The suspension of an issuer-dealer's or issuer-dealer agent's license shall temporarily withdraw the authority to conduct an issuer-dealer's or issuer-dealer agent's business in New Hampshire until the time specified in the order of suspension. The authority to conduct an issuer-dealer's or issuer-dealer agent's business in New Hampshire shall be recovered only by complying with all of the requirements of this section regarding the renewal of an issuer-dealer's or issuer-dealer agent's license and the payment of any penalties assessed in connection with the cause for suspension.
       (b)(1) Any person holding an issuer-dealer's or issuer-dealer agent's license may voluntarily return that license to the secretary of state. The return of such license shall be accompanied by the licensee's signed, written statement as to why the license is being voluntarily returned to the secretary of state. The voluntary surrender of an issuer-dealer's or issuer-dealer agent's license shall serve to withdraw the authority for the issuer-dealer or issuer-dealer agent to conduct an issuer-dealer's or issuer-dealer agent's business in New Hampshire.
          (2) Voluntary return of an issuer-dealer's or issuer-dealer agent's license shall not be permitted if there exists, at the time the license is presented to the secretary of state, any cause for involuntary revocation or suspension of the license, unless the licensee presenting the license shall state in writing that the voluntary return of the license is in lieu of proceedings relating to the involuntary revocation or suspension of the license to do business as an issuer-dealer or issuer-dealer agent in New Hampshire.
       (c) Except as authorized by statute, an issuer-dealer's or issuer-dealer agent's license shall not be revoked or suspended except in accordance with procedures set forth in this chapter.
       (d) Any issuer-dealer or issuer-dealer agent whose license has been revoked or suspended shall, within 5 days after the date of the order of revocation or suspension, return the license to the secretary of state.

Source. 1981, 214:1. 1986, 131:2. 1987, 411:2. 1990, 58:1. 1991, 355:73, 89, II. 1992, 288:31, 39. 1994, 388:5. 1997, 112:3; 296:10, 11. 2001, 260:7, 8, eff. July 13, 2001. 2006, 245:8-10, 29, I, eff. July 1, 2006. 2007, 104:7, eff. July 1, 2007. 2010, 101:1, eff. July 1, 2010.