2006 Utah Code - 61-1-4 — Licensing and notice filing procedure.

     61-1-4.   Licensing and notice filing procedure.
     (1) (a) A broker-dealer, agent, investment adviser, or investment adviser representative must obtain an initial or renewal license by filing with the division or its designee an application together with a consent to service of process under Section 61-1-26.
     (b) (i) The application shall contain the applicant's Social Security number and whatever information the division by rule requires concerning such matters as:
     (A) the applicant's form and place of organization;
     (B) the applicant's proposed method of doing business;
     (C) the qualifications and business history of the applicant; in the case of a broker-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 or investment adviser;
     (D) 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
     (E) the applicant's financial condition and history.
     (ii) An applicant's Social Security number is a private record under Subsection 63-2-302(1)(h).
     (c) The division may, by rule or order, require an applicant for an initial license to publish an announcement of the application in one or more specified newspapers published in this state.
     (d) Licenses or notice filings of broker-dealers, agents, investment advisers, and investment adviser representatives shall expire on December 31 of each year.
     (e) (i) If no denial order is in effect and no proceeding is pending under Section 61-1-6, a license becomes effective at noon of the 30th day after an application is filed.
     (ii) The division may by rule or order specify an earlier effective date and may by order defer the effective date until noon of the 30th day after the filing of any amendment.
     (iii) Licensing of a broker-dealer automatically constitutes licensing of only one partner, officer, director, or a person occupying a similar status or performing similar functions as a licensed agent of the broker-dealer.
     (iv) Licensing of an investment adviser automatically constitutes licensing of only one partner, officer, director, or a person occupying a similar status or performing similar functions.
     (2) Except with respect to federal covered advisers whose only clients are those described in Subsection 61-1-3(3)(b) or (c), a federal covered adviser shall file with the division, prior to acting as a federal covered adviser in this state, a notice filing consisting of such documents as have been filed with the Securities and Exchange Commission as the division by rule or order may require.
     (3) (a) Any applicant for an initial or renewal license as a broker-dealer or agent shall pay a reasonable filing fee as determined under Section 61-1-18.4.
     (b) Any applicant for an initial or renewal license as an investment adviser or investment adviser representative who is subject to licensing under this chapter shall pay a reasonable filing fee as determined under Section 61-1-18.4.
     (c) Any person acting as a federal covered adviser in this state shall pay an initial and renewal notice filing fee as determined under Section 61-1-18.4.
     (d) If the license or renewal is not granted or the application is withdrawn, the division shall retain the fee.

---

     (4) A licensed broker-dealer or investment adviser may file an application for licensing of a successor for the unexpired portion of the year. There shall be no filing fee.
     (5) The division may by rule or order require a minimum capital for licensed 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 or have discretionary authority over client funds or securities and those investment advisers who do not.
     (6) (a) The division may by rule or order require licensed broker-dealers and investment advisers who have custody of or discretionary authority over client funds or securities to post bonds in amounts as the division may prescribe, subject to the limitations of Section 15 of the Securities Exchange Act of 1934 for broker-dealers and Section 222 of the Investment Advisers Act of 1940 for investment advisers, and may determine their conditions.
     (b) Any appropriate deposit of cash or securities may be accepted in lieu of any required bond.
     (c) No bond may be required of any licensee whose net capital, or in the case of an investment adviser whose minimum financial requirements, which may be defined by rule, exceeds the amounts required by the division.
     (d) Every bond shall provide for suit on the bond by any person who has a cause of action under Section 61-1-22 and, if the division by rule or order requires, by any person who has a cause of action not arising under this chapter.
     (e) Every bond shall provide that no suit may be maintained to enforce any liability on the bond unless brought before the expiration of four years after the act or transaction constituting the violation or the expiration of two years after the discovery by the plaintiff of the facts constituting the violation, whichever expires first.

Amended by Chapter 90, 2004 General Session