Activities Requiring Agent Registration

Now that you know who is excluded from the agent definition, the next question is: what triggers the registration obligation for those who ARE agents?

The General Registration Requirement

The Uniform Securities Act (USA) Section 201(a)-(b) establishes a dual obligation:

  • Agent obligation: An agent must be registered before transacting business. Violating this makes it unlawful to transact business as an unregistered agent.
  • Employer obligation: A broker-dealer or issuer must not employ an unregistered agent. Violating this makes it unlawful to employ an agent who is not registered.
  • Both the agent AND the employer face liability if the agent is unregistered
  • The obligation runs both ways; it is not just the agent's responsibility

Exam Tip: Gotchas

  • The employer is also liable for employing an unregistered agent. The obligation is not just on the agent; the broker-dealer or issuer faces its own violation for allowing unregistered individuals to transact business.

Agent Registration Is Employer-Specific

One of the most important rules about agent registration:

  • An agent's registration is not effective during any period when the agent is not associated with a particular registered broker-dealer (BD) or a particular issuer (USA Section 201(b))
  • There is no such thing as a "free-floating" agent registration
  • The registration is always tied to a specific employer
  • If an agent leaves their BD, the registration becomes inactive until the agent associates with a new registered BD or issuer

Triple Notification on Status Changes

When an agent begins or terminates a connection with a broker-dealer or issuer, all three parties must promptly notify the Administrator:

  1. The agent
  2. The old employer (the BD or issuer being left)
  3. The new employer (the BD or issuer being joined)

Exam Tip: Gotchas

  • If an agent leaves Firm A to join Firm B, THREE parties must notify the Administrator: the agent, Firm A, AND Firm B. Failure of any party to provide prompt notification is a violation of the Act.
  • An agent's registration goes inactive the moment the agent leaves the BD. There is no grace period. The registration only becomes active again when the agent associates with a new registered BD or issuer.

Dual Registration

  • An agent may be registered with more than one broker-dealer (BD) simultaneously
  • Each BD must consent to the dual registration
  • Each registration is independent; termination from one BD does not affect registration with another

Exam Tip: Gotchas

  • Dual registration requires consent from all BDs involved. An agent cannot simply register with a second firm without both firms agreeing to the arrangement.