Registration and Post-Registration Requirements

The whole unit on one sheet: how a registration begins, what it owes while it lasts, and how it ends.

How Does a Registration Begin?

• File Form BD plus a consent to service of process and the fee. Registration is per state: registering with the SEC and FINRA satisfies no state.
• Absent a denial order or pending proceeding, registration is effective at noon on the 30th day after an application is filed. The Administrator may specify an earlier date or defer effectiveness until noon on the 30th day after an amendment. Registration expires December 31 each year.
• The consent appoints the Administrator as legal agent for noncriminal actions. It is one-time and irrevocable, never renews, and survives termination.

What Does a Registered Firm Owe Afterward?

• Keep the books and records the Administrator prescribes. Blotters and ledgers: 6 years, first 2 easily accessible. Correspondence and advertising: 3 years, first 2 easily accessible. Customer account records use a separate 6-year clock, and complaints use 4 years. Compliance, supervisory, and procedures manuals stay easily accessible while used and for 3 years after use ends.
• File the prescribed financial reports. A state may not set capital, custody, margin, financial responsibility, recordkeeping, bonding, or financial or operational reporting requirements that differ from, or add to, the federal requirements.
• Those prescribed records are open to examination at any time, inside or outside the state, without a subpoena.

How Does a Registration End?

• The Administrator may deny, suspend, revoke, bar, censure, or restrict. All six need a public-interest finding AND a statutory ground, plus prior notice, a hearing opportunity, and written findings. The only order entered without them is a summary postponement or suspension pending final determination of a proceeding.
• Cancellation is different and non-punitive. It needs no public-interest finding or disciplinary ground, but its order still requires prior notice, a hearing opportunity, and written findings. Its status finding is that the registrant no longer exists, ceased business, was adjudicated mentally incompetent or placed under specified control, or cannot be located after reasonable search.
• Withdrawal ordinarily takes 30 days, may be shortened by the Administrator, and may be held for a pending or timely instituted proceeding. Willful-violation exposure continues for 1 year.

Which Numbers Must You Lock In?

Which Gotchas Are Tested Most?

• Non-securities misdemeanors are not grounds. Only felonies and securities-related misdemeanors inside 10 years qualify.
• Insolvency alone is grounds, no fraud required, but the finding must be as to the firm itself.
• An ordinary agent's violation is not automatically imputed to the firm. A found unreasonable supervisory failure can support firm action when the public-interest test is also met.

One-Breath Recap

A broker-dealer registers in each state on Form BD with an irrevocable consent to service of process that never renews, becoming effective at noon on the thirtieth day and expiring every December 31. While registered it owes prescribed records and financial reports capped by the federal standard, and those prescribed records remain open to examination at any time without a subpoena. Discipline needs public interest plus a ground. Cancellation is housekeeping without those two prongs but still uses prior notice, a hearing opportunity, and written findings. Withdrawal ordinarily takes thirty days unless shortened and stays reachable for a year.

Need more than the recap? Read the full Registration and Post-Registration Requirements unit.