Investment Adviser / Securities Agent, Securities Broker-Dealer
Agency contact information:
Commerce, Minnesota Department of
85 7th Place East, Suite 500
St. Paul, MN 55101
Securities Registration - Investment Adviser: (651) 539-1638 | firstname.lastname@example.org
Contact Info: Diane Walters -Securities Agent, Securities Broker-Dealer
The Minnesota Department of Commerce is the chief regulator for the banking, energy, insurance, real estate, securities, telecommunications industries and also operates Minnesota's Unclaimed Property.
Minn. Stats. 80A
MINNESOTA RULES 2876.
Non-Minnesota businesses: Form U-2, Consent to Service of Process
Investment Advisers must have information on file with the Investment Adviser Registration Depository (IARD) electronic system. Once filed with IARD, the State of Minnesota reviews the information on file. If additional information is required, the investment adviser will be contacted directly by the Department of Commerce.
To register in the State of Minnesota, investment advisers must do the following:
Submit Forms using Online Filing - Investment Adviser Registration Depository
-Submit examples of client contracts to be used in the State of Minnesota ensuring that Minnesota law applies to the contracts.
-Submit examples of any literature or advertising that may be used which, among other things, explains in clear terms the fee structure employed by the investment adviser.
Submit Financial Information
For investment advisers who have custody or discretionary authority over a client’s funds: You must provide audited financial statements of the firm dated within 135 days of the application including a current balance sheet.
-If the audit is in excess of 135 days, submit an unaudited financial statement.
-Investment advisers who do not have custody or discretionary authority over client funds or do not require a pre-payment of $500 in fees six or more months in advance per client can also submit an unaudited financial statement or balance sheet.
Complete Additional Requirements
-A surety bond of $25,000 is required to be maintained unless the applicant has no custody of or discretionary authority over, client assets and has $100,000 in net capital.
Net Worth Requirements
-Investment Advisers with custody over client funds must maintain a minimum net worth or $35,000 if they do not have direct fee deductions. Investment advisors with discretion over a client’s funds, but without custody, must maintain a minimum net worth of $10,000.
-To register as an investment adviser, an initial fee of $100 is required at the time of registration with IARD. Subsequently, a fee of $100 must be paid through the IARD system on an annual basis to keep registration current.
Completion of Exam
-Provide written evidence that the full time supervisor has a) passed the Series 65 or Series 66 exam, or, meet the requirements of Minnesota Rule 2876.4120.
-The supervisor responsible for compliance must have acted in a similar supervisory capacity for three of the last five years and must submit a narrative description of employment history including the names of the firms where the supervisor worked, the time period when such work occurred, the number of people supervised and the specific job duties and responsibilities in each position.
-$100 annual fee payable and sent directly to FINRA (Financial Industry Regulatory Authority) due upon registration and at the time of annual renewals
Register with the Office of the MN Secretary of State
-Register with the Secretary of State to do business in the State of Minnesota if you are an entity based in another state. Please note that the State of Minnesota has adopted the national deminimus rule.
>Requirements for Non-Minnesota Businesses
Agents must pass Series 63 or Series 66 exams plus one FINRA agent exam
Each partner, officer, director or person serving in a similar capacity, must have passed the required agent and principal examinations, or represent in writing that they will not be in engaged in the sale of securities in Minnesota.
One full-time supervisor, responsible for compliance matters, must satisfy the following:
-The individual has acted in a similar supervisory capacity for three of the past five years. Submit a detailed explanation of such experience (the Form U-4 does not provide a sufficiently detailed description).
-Must have passed the Series 63 or the Series 66 exam.
-Must have passed the FINRA principal examination or equivalent.
-The supervisor is not required to hold an agent license if they are not engaged in the sale of securities.
State by signature of an authorized principal or officer whether applicant:
-Has had a judgment or order entered against them in any civil or administrative proceeding in which fraud was an element (other than those previously described in Form BD)
-Has any civil or criminal complaint or indictment currently pending, including any officer, director or partner
-Has any unsatisfied judgments currently outstanding, including any officer, director or partner
-Has any institutional or retail clients in Minnesota, including inactive accounts.
If applicant answers yes to any of the above situations, provide a detailed written explanation.
Note: This disclosure information should include all actions with any state or federal court or agency or self-regulatory organization.
Net Capital Requirements :
-$5,000 if the firm does not hold customer funds or securities
-15:1 aggregate indebtedness to net capital ratio
-Note: Bonds are not required for broker-dealers.
Forms (available from FINRA (Financial Industry Regulatory Authority)):
-Complete Form BD , broker-dealer application including a manually signed, dated and notarized Execution page. (copies of the amendments from the CRD web site are not acceptable).
-$200 annual fee, payable to and sent to the FINRA.
-Attach a copy of applicant's latest audited financial statement, including net capital computation.
-If the audited financial report is dated more than 135 days prior to the date of application, attach a copy of an unaudited financial report, Joint Regulatory Report or Focus Report IIA, which must be dated no more than 135 days prior to the date of application.
-The State of Minnesota does not require broker dealers to mail us a copy of their audited financial reports on an annual basis.
-Complete Form U-2, Consent to Service of Process.
-Apply with the Office of the Minnesota Secretary of State to transact business as a foreign corporation.
Initial fee - $100 is required at the time of registration with IARD.
Renewal fee - $100 must be paid through the IARD system on an
annual basis to keep registration current.
SECURITIES AGENT, SECURITIES BROKER-DEALER
Securities Broker Dealer Agent - $50 initial and renewal
Securities Broker Dealer (company) - $200 annual fee,
payable to and sent to the FINRA.
Licensing surcharge to be assessed
The Minnesota Legislature passed legislation requiring a 10% surcharge of no less than $5 and no more than $150 on each business, commercial, professional or occupational license. The funding from this surcharge will go to MN.IT Services (formerly Office of Enterprise Technology (OET)), which is establishing an electronic licensing system for the state. The surcharge will be in place through June 30, 2015. See Minn. Stat. § 16E.22.
Period of Issuance:
Other Pertinent Information: