517.12 Registration of dealers, associated persons, intermediaries, and investment advisers.—
(1) No dealer or associated person shall sell or offer for sale any securities in or from offices in this state or sell securities to persons in this state from offices outside this state, by mail or otherwise, unless the person is registered with the office as a dealer or as an associated person of a dealer pursuant to this section. The office shall not register any person as an associated person of a dealer unless the dealer with which the applicant seeks registration is lawfully registered with the office pursuant to this chapter.
(2) The registration requirements of this section do not apply in a transaction exempted by s. 517.061(1)-(6), (8), (9), (12), and (13).
(3) No investment adviser or associated person of an investment adviser or federal covered adviser shall engage in business from offices in this state, or render investment advice to persons of this state, by mail or otherwise, unless the federal covered adviser has made a notice-filing with the office pursuant to s. 517.1201 or the investment adviser is registered pursuant to the provisions of this chapter and associated persons of the federal covered adviser or investment adviser have been registered with the office pursuant to this section. The office shall not register any person or an associated person of a federal covered adviser or an investment adviser unless the federal covered adviser or investment adviser with which the applicant seeks registration is in compliance with the notice-filing requirements of s. 517.1201 or is lawfully registered with the office pursuant to this chapter. A dealer or associated person who is registered pursuant to this section may render investment advice upon notification to and approval from the office.
(4) No dealer or investment adviser shall conduct business from a branch office within this state unless the branch office is notice-filed with the office pursuant to s. 517.1202.
(5) A dealer, associated person, or investment adviser, in order to obtain registration, must file with the office a written application, on a form which the commission may by rule prescribe. The commission may establish, by rule, procedures for depositing fees and filing documents by electronic means provided such procedures provide the office with the information and data required by this section. Each dealer or investment adviser must also file an irrevocable written consent to service of civil process similar to that provided for in s. 517.101. The application shall contain such information as the commission or office may require concerning such matters as:
(a) The name of the applicant and the address of its principal office and each office in this state.
(b) The applicant’s form and place of organization; and, if the applicant is:
1. A corporation, a copy of its articles of incorporation and amendments to the articles of incorporation;
2. A limited liability company, a copy of its articles of organization with amendments to its articles; or
3. A partnership, a copy of the partnership agreement.
(c) The applicant’s proposed method of doing business and financial condition and history, including a certified financial statement showing all assets and all liabilities, including contingent liabilities of the applicant as of a date not more than 90 days prior to the filing of the application.
(d) The names and addresses of all associated persons of the applicant to be employed in this state and the offices to which they will be assigned.
(6) The application must also contain such information as the commission or office may require about the applicant; any member, principal, or director of the applicant or any person having a similar status or performing similar functions; any person directly or indirectly controlling the applicant; or any employee of a dealer or of an investment adviser rendering investment advisory services. Each applicant and any direct owners, principals, or indirect owners that are required to be reported on Form BD or Form ADV pursuant to subsection (14) shall submit fingerprints for live-scan processing in accordance with rules adopted by the commission. The fingerprints may be submitted through a third-party vendor authorized by the Department of Law Enforcement to provide live-scan fingerprinting. The costs of fingerprint processing shall be borne by the person subject to the background check. The Department of Law Enforcement shall conduct a state criminal history background check, and a federal criminal history background check must be conducted through the Federal Bureau of Investigation. The office shall review the results of the state and federal criminal history background checks and determine whether the applicant meets licensure requirements. The commission may waive, by rule, the requirement that applicants, including any direct owners, principals, or indirect owners that are required to be reported on Form BD or Form ADV pursuant to subsection (14), submit fingerprints or the requirement that such fingerprints be processed by the Department of Law Enforcement or the Federal Bureau of Investigation. The commission or office may require information about any such applicant or person concerning such matters as:
(a) The applicant’s or person’s full name, and any other names by which the applicant or person may have been known, and the applicant’s or person’s age, social security number, photograph, qualifications, and educational and business history.
(b) Any injunction or administrative order by a state or federal agency, national securities exchange, or national securities association involving a security or any aspect of a dealer’s or investment adviser’s regulated business and any injunction or administrative order by a state or federal agency regulating banking, insurance, finance, or small loan companies, real estate, mortgage brokers, or other related or similar industries, which injunctions or administrative orders relate to such person.
(c) The applicant’s or person’s conviction of, or plea of nolo contendere to, a criminal offense or the applicant’s or person’s commission of any acts which would be grounds for refusal of an application under s. 517.161.
(d) The names and addresses of other persons of whom the office may inquire as to the applicant’s or person’s character, reputation, and financial responsibility.
(7) The commission or office may require the applicant or one or more principals or general partners, or natural persons exercising similar functions, or any associated person applicant to successfully pass oral or written examinations. Because any principal, manager, supervisor, or person exercising similar functions shall be responsible for the acts of the associated persons affiliated with a dealer, the examination standards may be higher for a dealer, office manager, principal, or person exercising similar functions than for a nonsupervisory associated person. The commission may waive the examination process when it determines that such examinations are not in the public interest. The office shall waive the examination requirements for any person who has passed any tests as prescribed in s. 15(b)(7) of the Securities Exchange Act of 1934 that relates to the position to be filled by the applicant.
(8)(a) All dealers, except securities dealers who are designated by the Federal Reserve Bank of New York as primary government securities dealers or securities dealers registered as issuers of securities, shall comply with the net capital and ratio requirements imposed pursuant to the Securities Exchange Act of 1934. The commission may by rule require a dealer to file with the office any financial or operational information that is required to be filed by the Securities Exchange Act of 1934 or any rules adopted under such act.
(b) The commission may by rule require the maintenance of a minimum net capital for securities dealers who are designated by the Federal Reserve Bank of New York as primary government securities dealers and securities dealers registered as issuers of securities and investment advisers, or prescribe a ratio between net capital and aggregate indebtedness, to assure adequate protection for the investing public. The provisions of this section shall not apply to any investment adviser that maintains its principal place of business in a state other than this state, provided such investment adviser is registered in the state where it maintains its principal place of business and is in compliance with such state’s net capital requirements.
(9)(a) An applicant for registration shall pay an assessment fee of $200, in the case of a dealer or investment adviser, or $50, in the case of an associated person. An associated person may be assessed an additional fee to cover the cost for the fingerprints to be processed by the office. Such fee shall be determined by rule of the commission. Such fees become the revenue of the state, except for those assessments provided for under s. 517.131(2) until such time as the Securities Guaranty Fund satisfies the statutory limits, and are not returnable in the event that registration is withdrawn or not granted.
(b) The office shall waive the $50 assessment fee for an associated person required by paragraph (a) for an applicant who:
1. Is or was an active duty member of the United States Armed Forces. To qualify for the fee waiver, an applicant who is a former member of the United States Armed Forces must have received an honorable discharge upon separation or discharge from the United States Armed Forces;
2. Is married to a current or former member of the United States Armed Forces and is or was married to the member during any period of active duty; or
3. Is the surviving spouse of a member of the United States Armed Forces if the member was serving on active duty at the time of death.
An applicant seeking such fee waiver must submit proof, in a form prescribed by commission rule, that the applicant meets one of the qualifications in this paragraph.
(10)(a) If the office finds that the applicant has complied with the applicable registration provisions of this chapter and the rules made pursuant hereto, it shall register the applicant unless the applicant is otherwise disqualified for registration pursuant to law. The registration of each dealer, investment adviser, and associated person expires on December 31 of the year the registration became effective unless the registrant has renewed its registration on or before that date. Registration may be renewed by furnishing such information as the commission may require, together with payment of the fee required in paragraph (9)(a) for dealers, investment advisers, or associated persons and the payment of any amount lawfully due and owing to the office pursuant to any order of the office or pursuant to any agreement with the office. Any dealer, investment adviser, or associated person who has not renewed a registration by the time the current registration expires may request reinstatement of such registration by filing with the office, on or before January 31 of the year following the year of expiration, such information as may be required by the commission, together with payment of the fee required in paragraph (9)(a) for dealers, investment advisers, or associated persons and a late fee equal to the amount of such fee. Any reinstatement of registration granted by the office during the month of January shall be deemed effective retroactive to January 1 of that year.
(b) The office shall waive the $50 assessment fee for an associated person required by paragraph (9)(a) for a registrant renewing his or her registration who:
1. Is an active duty member of the United States Armed Forces or the spouse of such member;
2. Is or was a member of the United States Armed Forces and served on active duty within the 2 years preceding the expiration date of the registration pursuant to paragraph (a). To qualify for the fee waiver, a registrant who is a former member of the United States Armed Forces who served on active duty within the 2 years preceding the expiration date of the registration must have received an honorable discharge upon separation or discharge from the United States Armed Forces; or
3. Is the surviving spouse of a member of the United States Armed Forces if the member was serving on active duty at the time of death and died within the 2 years preceding the surviving spouse’s registration expiration date pursuant to paragraph (a).
A registrant seeking such fee waiver must submit proof, in a form prescribed by commission rule, that the registrant meets one of the qualifications in this paragraph.
(11)(a) The office may issue a license to a dealer, investment adviser, or associated person to evidence registration under this chapter. The office may require the return to the office of any license it may issue prior to issuing a new license.
(b) Every dealer, investment adviser, or federal covered adviser shall promptly file with the office, as prescribed by rules adopted by the commission, notice as to the termination of employment of any associated person registered for such dealer or investment adviser in this state and shall also furnish the reason or reasons for such termination.
(c) Each dealer or investment adviser shall designate in writing to, and register with, the office a manager for each office the dealer or investment adviser has in this state.
(12) Changes in registration occasioned by changes in personnel of a partnership or in the principals, copartners, officers, or directors of any dealer or investment adviser or by changes of any material fact or method of doing business shall be reported by written amendment in such form and at such time as the commission may specify. In any case in which a person or a group of persons, directly or indirectly or acting by or through one or more persons, proposes to purchase or acquire a controlling interest in a registered dealer or investment adviser, such person or group shall submit an initial application for registration as a dealer or investment adviser prior to such purchase or acquisition. The commission shall adopt rules providing for waiver of the application required by this subsection where control of a registered dealer or investment adviser is to be acquired by another dealer or investment adviser registered under this chapter or where the application is otherwise unnecessary in the public interest.
(13) Every dealer or investment adviser registered or required to be registered or branch office notice-filed or required to be notice-filed with the office shall keep records of all currency transactions in excess of $10,000 and shall file reports, as prescribed under the financial recordkeeping regulations in 31 C.F.R. part 103, with the office when transactions occur in or from this state. All reports required by this subsection to be filed with the office shall be confidential and exempt from s. 119.07(1) except that any law enforcement agency or the Department of Revenue shall have access to, and shall be authorized to inspect and copy, such reports.
(14)(a) In order to facilitate uniformity and streamline procedures for persons who are subject to registration or notification in multiple jurisdictions, the commission may adopt by rule uniform forms that have been approved by the Securities and Exchange Commission, and any subsequent amendments to such forms, if the forms are substantially consistent with the provisions of this chapter. Uniform forms that the commission may adopt to administer this section include, but are not limited to:
1. Form BR, Uniform Branch Office Registration Form, adopted October 2005.
2. Form U4, Uniform Application for Securities Industry Registration or Transfer, adopted October 2005.
3. Form U5, Uniform Termination Notice for Securities Industry Registration, adopted October 2005.
4. Form ADV, Uniform Application for Investment Adviser Registration, adopted October 2003.
5. Form ADV-W, Notice of Withdrawal from Registration as an Investment Adviser, adopted October 2003.
6. Form BD, Uniform Application for Broker-Dealer Registration, adopted July 1999.
7. Form BDW, Uniform Request for Broker-Dealer Withdrawal, adopted August 1999.
(b) In lieu of filing with the office the applications specified in subsection (5), the fees required by subsection (9), the renewals required by subsection (10), and the termination notices required by subsection (11), the commission may by rule establish procedures for the deposit of such fees and documents with the Central Registration Depository or the Investment Adviser Registration Depository of the Financial Industry Regulatory Authority, as developed under contract with the North American Securities Administrators Association, Inc.
(15) Except for securities dealers who are designated by the Federal Reserve Bank of New York as primary government securities dealers or securities dealers registered as issuers of securities, every applicant for initial or renewal registration as a securities dealer and every person registered as a securities dealer shall be registered as a broker or dealer with the Securities and Exchange Commission and shall be subject to insurance coverage by the Securities Investor Protection Corporation.
(16)(a) A dealer that is located in Canada, does not have an office or other physical presence in this state, and has made a notice-filing in accordance with this subsection is exempt from the registration requirements of this section and may effect transactions in securities with or for, or induce or attempt to induce the purchase or sale of any security by:
1. A person from Canada who is present in this state and with whom the Canadian dealer had a bona fide dealer-client relationship before the person entered the United States; or
2. A person from Canada who is present in this state and whose transactions are in a self-directed, tax-advantaged retirement plan in Canada of which the person is the holder or contributor.
(b) A notice-filing under this subsection must consist of documents the commission by rule requires to be filed, together with a consent to service of process and a nonrefundable filing fee of $200. The commission may establish by rule procedures for the deposit of fees and the filing of documents to be made by electronic means, if such procedures provide the office with the information and data required by this section.
(c) A Canadian dealer may make a notice-filing under this subsection if the dealer provides to the office:
1. A notice-filing in the form the commission requires by rule.
2. A consent to service of process.
3. Evidence that the Canadian dealer is registered as a dealer in the jurisdiction in which the dealer’s main office is located.
4. Evidence that the Canadian dealer is a member of a self-regulatory organization or stock exchange in Canada.
(d) The office may issue a permit to evidence the effectiveness of a notice-filing for a Canadian dealer.
(e) A notice-filing is effective upon receipt by the office. A notice-filing expires on December 31 of the year in which the filing becomes effective unless the Canadian dealer has renewed the filing on or before that date. A Canadian dealer may annually renew a notice-filing by furnishing to the office such information as the office requires together with a renewal fee of $200 and the payment of any amount due and owing the office pursuant to any agreement with the office. Any Canadian dealer who has not renewed a notice-filing by the time a current notice-filing expires may request reinstatement of such notice-filing by filing with the office, on or before January 31 of the year following the year the notice-filing expires, such information as the commission requires by rule, together with the payment of $200 and a late fee of $200. A reinstatement of a notice-filing granted by the office during the month of January is effective retroactively to January 1 of that year.
(f) An associated person who represents a Canadian dealer who has made a notice-filing under this subsection is exempt from the registration requirements of this section and may effect transactions in securities in this state as permitted for a dealer under paragraph (a) if such person is registered in the jurisdiction from which he or she is effecting transactions into this state.
(g) A Canadian dealer who has made a notice-filing under this subsection shall:
1. Maintain its provincial or territorial registration and its membership in a self-regulatory organization or stock exchange in good standing.
2. Provide the office upon request with its books and records relating to its business in this state as a dealer.
3. Provide the office upon request notice of each civil, criminal, or administrative action initiated against the dealer.
4. Disclose to its clients in this state that the dealer and its associated persons are not subject to the full regulatory requirements under this chapter.
5. Correct any inaccurate information within 30 days after the information contained in the notice-filing becomes inaccurate for any reason.
(h) An associated person representing a Canadian dealer who has made a notice-filing under this subsection shall:
1. Maintain provincial or territorial registration in good standing.
2. Provide the office upon request with notice of each civil, criminal, or administrative action initiated against such person.
(i) A notice-filing may be terminated by filing notice of such termination with the office. Unless another date is specified by the Canadian dealer, such notice is effective upon receipt of the notice by the office.
(j) All fees collected under this subsection become the revenue of the state, except those assessments provided for under s. 517.131(2), until the Securities Guaranty Fund has satisfied the statutory limits. Such fees are not returnable if a notice-filing is withdrawn.
(17) Every dealer or associated person registered or required to be registered with the office shall satisfy any continuing education requirements established by rule pursuant to law.
(18) The registration requirements of this section which apply to investment advisers and associated persons do not apply to a commodity trading adviser who:
(a) Is registered as such with the Commodity Futures Trading Commission pursuant to the Commodity Exchange Act.
(b) Advises or exercises trading discretion, with respect to foreign currency options listed and traded exclusively on the Philadelphia Stock Exchange, on behalf of an “appropriate person” as defined by the Commodity Exchange Act.
The exemption provided in this subsection does not apply to a commodity trading adviser who engages in other activities that require registration under this chapter.
(19) An intermediary may not engage in business in this state unless the intermediary is registered as a dealer or as an intermediary with the office pursuant to this section to facilitate the offer or sale of securities in accordance with s. 517.0611. An intermediary, in order to obtain registration, must file with the office a written application on a form prescribed by commission rule and pay a registration fee of $200. The fees under this subsection shall be deposited into the Regulatory Trust Fund of the office. The commission may establish by rule procedures for depositing fees and filing documents by electronic means if such procedures provide the office with the information and data required by this section. Each intermediary must also file an irrevocable written consent to service of civil process, as provided in s. 517.101.
(a) The application must contain such information as the commission or office may require concerning:
1. The name of the applicant and address of its principal office and each office in this state.
2. The applicant’s form and place of organization; and, if the applicant is:
a. A corporation, a copy of its articles of incorporation and amendments to the articles of incorporation;
b. A limited liability company, a copy of its articles of organization and amendments to the articles and a copy of the company’s operating agreement as may be amended; or
c. A partnership, a copy of the partnership agreement.
3. The website address where securities of the issuer will be offered.
4. Contact information.
(b) The application must also contain such information as the commission may require by rule about the applicant; any member, principal, or director of the applicant or any person having a similar status or performing similar functions; or any persons directly or indirectly controlling the applicant. Each applicant and any direct owners, principals, or indirect owners that are required to be reported on a form adopted by commission rule shall submit fingerprints for live-scan processing in accordance with rules adopted by the commission. The fingerprints may be submitted through a third-party vendor authorized by the Department of Law Enforcement to provide live-scan fingerprinting. The costs of fingerprint processing shall be borne by the person subject to the background check. The Department of Law Enforcement shall conduct a state criminal history background check, and a federal criminal history background check must be conducted through the Federal Bureau of Investigation. The office shall review the results of the state and federal criminal history background checks and determine whether the applicant meets registration requirements. The commission may waive, by rule, the requirement that applicants, including any direct owners, principals, or indirect owners, which are required to be reported on a form adopted by commission rule, submit fingerprints or the requirement that such fingerprints be processed by the Department of Law Enforcement or the Federal Bureau of Investigation. The commission, by rule, or the office may require information about any applicant or person, including:
1. The applicant’s or person’s full name and any other names by which the applicant or person may have been known and the applicant’s or person’s age, social security number, photograph, qualifications, and educational and business history.
2. Any injunction or administrative order by a state or federal agency, national securities exchange, or national securities association involving a security or any aspect of an intermediary’s regulated business and any injunction or administrative order by a state or federal agency regulating banking, insurance, finance, real estate, mortgage brokers, or other related or similar industries, which relate to such person.
3. The applicant’s or person’s conviction of, or plea of nolo contendere to, a criminal offense or the applicant’s or person’s commission of any acts that would be grounds for refusal of an application under s. 517.161.
(c) The application must be amended within 30 days if any information contained in the form becomes inaccurate for any reason.
(d) An intermediary or persons affiliated with the intermediary are not subject to any disqualification described in s. 517.1611 or Securities and Exchange Commission Rule 506(d), 17 C.F.R. 230.506(d), adopted pursuant to the Securities Act of 1933, as amended. Each director, officer, manager or managing member, control person of the issuer, any person occupying a similar status or performing a similar function, and each person holding more than 20 percent of the ownership interests of the intermediary is subject to this requirement.
(e) If the office finds that the applicant has complied with the applicable registration provisions of this chapter and the rules adopted thereunder, it shall register the applicant. The registration of each intermediary expires on December 31 of the year the registration became effective unless the registrant renews his or her registration on or before that date. Registration may be renewed by furnishing such information as the commission may require by rule, together with payment of a $200 fee and the payment of any amount due to the office pursuant to any order of the office or pursuant to any agreement with the office. An intermediary who has not renewed a registration by the time that the current registration expires may request reinstatement of such registration by filing with the office, on or before January 31 of the year following the year of expiration, such information as required by the commission, together with payment of the $200 fee and a late fee of $200. Any reinstatement of registration granted by the office during the month of January is deemed effective retroactive to January 1 of that year.
(20) The registration requirements of this section do not apply to any general lines insurance agent or life insurance agent licensed under chapter 626, with regard to the sale of a security as defined in s. 517.021(25)(g), if the individual is directly authorized by the issuer to offer or sell the security on behalf of the issuer and the issuer is a federally chartered savings bank subject to regulation by the Federal Deposit Insurance Corporation. Actions under this subsection constitute activity under the insurance agent’s license for purposes of ss. 626.611 and 626.621.
(21)(a) As used in this subsection, the term:
1. “Broker” has the same meaning as “dealer” as defined in s. 517.021.
2. “Control person” means an individual or entity that possesses the power, directly or indirectly, to direct the management or policies of a company through ownership of securities, by contract, or otherwise. A person is presumed to be a control person of a company if, with respect to a particular company, the person:
a. Is a director, a general partner, a member, or a manager of a limited liability company, or is an officer who exercises executive responsibility or has a similar status or function;
b. Has the power to vote 20 percent or more of a class of voting securities or has the power to sell or direct the sale of 20 percent or more of a class of voting securities; or
c. In the case of a partnership or limited liability company, may receive upon dissolution, or has contributed, 20 percent or more of the capital.
3. “Eligible privately held company” means a company that meets all of the following conditions:
a. The company does not have any class of securities which is registered, or which is required to be registered, with the United States Securities and Exchange Commission under the Securities Exchange Act of 1934, 15 U.S.C. ss. 78a et seq., or with the office under s. 517.07, or for which the company files, or is required to file, summary and periodic information, documents, and reports under s. 15(d) of the Securities Exchange Act of 1934, 15 U.S.C. s. 78o(d).
b. In the fiscal year immediately preceding the fiscal year during which the merger and acquisition broker begins to provide services for the securities transaction, the company, in accordance with its historical financial accounting records, has earnings before interest, taxes, depreciation, and amortization of less than $25 million or has gross revenues of less than $250 million. On July 1, 2021, and every 5 years thereafter, each dollar amount in this sub-subparagraph shall be adjusted by dividing the annual value of the Employment Cost Index for wages and salaries for private industry workers, or any successor index, as published by the Bureau of Labor Statistics, for the calendar year preceding the calendar year in which the adjustment is being made, by the annual value of such index or successor index for the calendar year ending December 31, 2012, and multiplying such dollar amount by the quotient obtained. Each dollar amount determined under this sub-subparagraph shall be rounded to the nearest multiple of $100,000.
4. “Merger and acquisition broker” means any broker and any person associated with a broker engaged in the business of effecting securities transactions solely in connection with the transfer of ownership of an eligible privately held company, regardless of whether that broker acts on behalf of a seller or buyer, through the purchase, sale, exchange, issuance, repurchase, or redemption of, or a business combination involving, securities or assets of the eligible privately held company.
5. “Public shell company” means a company that at the time of a transaction with an eligible privately held company:
a. Has any class of securities which is registered, or which is required to be registered, with the United States Securities and Exchange Commission under the Securities Exchange Act of 1934, 15 U.S.C. ss. 78a et seq., or with the office under s. 517.07, or for which the company files, or is required to file, summary and periodic information, documents, and reports under s. 15(d) of the Securities Exchange Act of 1934, 15 U.S.C. s. 78o(d);
b. Has nominal or no operations; and
c. Has nominal assets or no assets, assets consisting solely of cash and cash equivalents, or assets consisting of any amount of cash and cash equivalents and nominal other assets.
(b) Prior to the completion of any securities transaction described in s. 517.061(7), a merger and acquisition broker must receive written assurances from the control person with the largest percentage of ownership for both the buyer and seller engaged in the transaction that:
1. After the transaction is completed, any person who acquires securities or assets of the eligible privately held company, acting alone or in concert, will be a control person of the eligible privately held company or will be a control person for the business conducted with the assets of the eligible privately held company; and
2. If any person is offered securities in exchange for securities or assets of the eligible privately held company, such person will, before becoming legally bound to complete the transaction, receive or be given reasonable access to the most recent year-end financial statements of the issuer of the securities offered in exchange. The most recent year-end financial statements shall be customarily prepared by the issuer’s management in the normal course of operations. If the financial statements of the issuer are audited, reviewed, or compiled, the most recent year-end financial statements must include any related statement by the independent certified public accountant; a balance sheet dated not more than 120 days before the date of the exchange offer; and information pertaining to the management, business, results of operations for the period covered by the foregoing financial statements, and material loss contingencies of the issuer.
(c) A merger and acquisition broker engaged in a transaction exempt under s. 517.061(7) is exempt from registration under this section unless the merger and acquisition broker:
1. Directly or indirectly, in connection with the transfer of ownership of an eligible privately held company, receives, holds, transmits, or has custody of the funds or securities to be exchanged by the parties to the transaction;
2. Engages on behalf of an issuer in a public offering of any class of securities which is registered, or which is required to be registered, with the United States Securities and Exchange Commission under the Securities Exchange Act of 1934, 15 U.S.C. ss. 78a et seq., or with the office under s. 517.07; or for which the issuer files, or is required to file, periodic information, documents, and reports under s. 15(d) of the Securities Exchange Act of 1934, 15 U.S.C. s. 78o(d);
3. Engages on behalf of any party in a transaction involving a public shell company;
4. Is subject to a suspension or revocation of registration under s. 15(b)(4) of the Securities Exchange Act of 1934, 15 U.S.C. s. 78o(b)(4);
5. Is subject to a statutory disqualification described in s. 3(a)(39) of the Securities Exchange Act of 1934, 15 U.S.C. s. 78c(a)(39);
6. Is subject to a disqualification under the United States Securities and Exchange Commission Rule 506(d), 17 C.F.R. s. 230.506(d); or
7. Is subject to a final order described in s. 15(b)(4)(H) of the Securities Exchange Act of 1934, 15 U.S.C. s. 78o(b)(4)(H).
(22)(a) As used in this subsection, the term:
1. “Advisory affiliate” has the same meaning as in the Glossary of Terms to Form ADV, the uniform application for investment adviser registration, 17 C.F.R. s. 279.1.
2. “Exempt reporting adviser” has the same meaning as in the Glossary of Terms to Form ADV, the uniform application for investment adviser registration, 17 C.F.R. s. 279.1.
3. “Private fund adviser” means an investment adviser who provides advice to solely one or more qualifying private funds.
4. “Qualifying private fund” means:
a. A private fund that meets the definition of the term “qualifying private fund” in Securities and Exchange Commission Rule 203(m)-1, 17 C.F.R. s. 275.203(m)-1;
b. A private fund that meets the definition of the term “venture capital fund” in Securities and Exchange Commission Rule 203(l)-1, 17 C.F.R. s. 275.203(l)-1; or
c. A “venture capital operating company” as defined in 29 C.F.R. s. 2510.3-101(d) adopted by the United States Department of Labor under the Employee Retirement Income Security Act of 1974.
5. “3(c)(1) fund” means a qualifying private fund that is eligible for the exclusion from the definition of the term “investment company” under s. 3(c)(1) of the Investment Company Act of 1940, 15 U.S.C. s. 80a-3(c)(1), as amended.
(b) Subject to the additional requirements of paragraph (c), a private fund adviser is exempt from the registration requirements of this section if the private fund adviser satisfies the following conditions:
1. Neither the private fund adviser nor any of its advisory affiliates are subject to an event that would disqualify an issuer under Securities and Exchange Commission Rule 506(d)(1) of Regulation D, 17 C.F.R. s. 230.506(d)(1); and
2. The private fund adviser files with the office each report and amendment thereto that an exempt reporting adviser is required to file with the Securities and Exchange Commission pursuant to Securities and Exchange Commission Rule 204-4, 17 C.F.R. s. 275.204-4.
(c) In order to qualify for the exemption from the registration requirements of this section, a private fund adviser who advises at least one 3(c)(1) fund that is not a venture capital fund shall, in addition to satisfying the conditions specified in subparagraphs (b)1. and 2., comply with the following requirements:
1. The private fund adviser shall advise only those 3(c)(1) funds, other than venture capital funds, whose outstanding securities, other than short-term paper, are beneficially owned entirely by accredited investors; and
2. At the time of purchase, the private fund adviser shall disclose the following in writing to each beneficial owner of a 3(c)(1) fund that is not a venture capital fund:
a. All services, if any, to be provided to individual beneficial owners;
b. All duties, if any, the investment adviser owes to the beneficial owners; and
c. Any other material information affecting the rights or responsibilities of the beneficial owners.
(d) If a private fund adviser is registered with the Securities and Exchange Commission, the adviser is not eligible for the exemption from the registration requirements of this section and shall comply with the notice filing requirements applicable to federal covered advisers in s. 517.1201.
(e) A person is exempt from the registration requirements of this section if the person is employed by or associated with an investment adviser that is exempt from registration and does not otherwise act as an associated person of an investment adviser or federal covered adviser.
(f) The report filings and the amendments thereto described in subparagraph (b)2. shall be made electronically through the Investment Adviser Registration Depository of the Financial Industry Regulatory Authority. A report is deemed filed with the office when the report has been filed and accepted by the depository on the office’s behalf.
History.—s. 11, ch. 14899, 1931; s. 6, ch. 17253, 1935; CGL 1936 Supp. 6002(12); s. 3, ch. 20960, 1941; s. 3, ch. 21709, 1943; s. 1, ch. 57-288; s. 1, ch. 59-169; s. 1, ch. 63-321; s. 6, ch. 65-454; ss. 12, 35, ch. 69-106; s. 6, ch. 71-96; s. 2, ch. 72-152; s. 3, ch. 73-68; s. 1, ch. 74-278; s. 3, ch. 76-168; s. 194, ch. 77-104; s. 1, ch. 77-457; s. 4, ch. 78-435; s. 19, ch. 79-8; s. 149, ch. 79-164; ss. 7, 15, ch. 79-381; ss. 3-5, ch. 80-254; ss. 2, 3, ch. 80-403; ss. 4, 6, ch. 81-115; ss. 2, 3, ch. 81-318; s. 3, ch. 83-184; s. 3, ch. 83-265; s. 4, ch. 84-159; s. 9, ch. 85-165; s. 8, ch. 86-85; s. 2, ch. 88-187; ss. 6, 14, 15, ch. 90-362; s. 4, ch. 91-429; s. 3, ch. 92-9; s. 4, ch. 92-45; s. 5, ch. 96-338; s. 336, ch. 96-406; s. 1167, ch. 97-103; s. 8, ch. 97-224; s. 1, ch. 98-82; s. 6, ch. 98-221; s. 51, ch. 2000-154; s. 12, ch. 2002-404; s. 65, ch. 2003-1; s. 593, ch. 2003-261; s. 62, ch. 2006-1; s. 36, ch. 2006-213; s. 1, ch. 2007-63; s. 4, ch. 2009-242; s. 48, ch. 2013-116; s. 3, ch. 2013-201; s. 1, ch. 2013-202; s. 4, ch. 2015-171; s. 2, ch. 2016-111; s. 36, ch. 2018-7; s. 6, ch. 2023-205; s. 22, ch. 2024-168.
