Chapter 073

2008 -- S 2445 SUBSTITUTE B

Enacted 06/25/08

A N A C T

RELATING TO CORPORATIONS, ASSOCIATIONS, AND PARTNERSHIP - RHODE ISLAND UNIFORM SECURITIES ACT

          

     Introduced By: Senators Walaska, and Bates

     Date Introduced: February 13, 2008  

 

It is enacted by the General Assembly as follows:

 

     SECTION 1. Section 7-11-206 of the General Laws in Chapter 7-11 entitled "Rhode

Island Uniform Securities Act" is hereby amended to read as follows:

 

     7-11-206. Licensing and notice fees; and filing requirements for federal covered

advisers. -- (a) A federal covered adviser or an applicant for licensing shall pay an annual fee as

follows:

      (1) Broker dealer two hundred and fifty dollars ($250) and for each branch office one

hundred dollars ($100);

      (2) Sales representative fifty dollars ($50.00);

      (3) Investment adviser two hundred and fifty dollars ($250); and

      (4) Investment adviser representative fifty dollars ($50.00).

      (5) Federal covered adviser two hundred and fifty dollars ($250).

      (b) Except with respect to federal covered advisers whose only clients are those

described in section 7-11-204(1)(i), a federal covered adviser shall file any documents filed with

the U.S. Securities and Exchange Commission with the director, that the director requires by rule

or order, together with any notice fee and consent to service of process that the director requires

by rule or order. The notice filings under this subsection expire annually on December 31, unless

renewed.

      (c) A notice filing under this section is effective from receipt until the end of the

calendar year. A notice filing may be renewed by filing any documents that have been filed with

the U.S. Securities and Exchange Commission as required by the director along with a renewal

fee of two hundred fifty dollars ($250).

      (d) A federal covered adviser may terminate a notice filing upon providing the director

notice of the termination, which is effective upon receipt by the director.

      (e) Notwithstanding the provisions of this section, until October 11, 1999, the director

may require the registration as an investment adviser of any federal covered adviser who has

failed to promptly pay the fees required by this section after written notification from the director

of the non-payment or underpayment of the fees. A federal covered adviser is considered to have

promptly paid the fees if they are remitted to the director within fifteen (15) days following the

federal covered adviser's receipt of written notice from the director.

      (f) For purposes of this section, "branch office" means an office of a broker dealer in this

state, other than the principal office in this state of the broker dealer, from which three (3) or

more sales representatives transact business.

     For purposes of this section, "branch office" means any location where one or more

associated persons of a broker-dealer regularly conducts the business of effecting any transactions

in, or inducing or attempting to induce the purchase or sale of any security, or is held out as such,

excluding:

     (1) Any location that is established solely for customer service and/or back office type

functions where no sales activities are conducted and that is not held out to the public as a branch

office;

     (2) Any location that is the associated person's primary residents; provided that:

     (i) Only one associated person, or multiple associated persons who reside at that location

and are members of the same immediate family, conduct business at the location;

     (ii) The location is not held out to the public as an office and the associated person does

not meet with customers at the location;

     (iii) Neither customer funds nor securities are handled at that location;

     (iv) The associated person is assigned to a designated branch office, and such designated

branch office is reflected on all business cards, stationery, advertisements and other

communications to the public by such associated person;

     (v) The associated person's correspondence and communications with the public are

subject to the firm's supervision in accordance with Rule 3010 of the Financial Industry

Regulatory Authority;

     (vi) Electronic communications are made through the broker-dealer's electronic system;

     (vii) All orders are entered through the designated branch office or an electronic system

established by the broker-dealer that is reviewable at the branch office;

     (viii) Written supervisory procedures pertaining to supervision of sales activities

conducted at the residence are maintained by the broker-dealer; and

     (ix) A list of the residence locations is maintained by the broker-dealer;

     (3) Any location, other than a primary residence, that is used for securities business for

less than thirty (30) business days in any one calendar year, provided the broker-dealer complies

with the provisions of paragraph (f)(2)(i) through (ix) above;

     (4) Any office of convenience, where associated person occasionally and exclusively by

appointment meet with customers, which is not held out to the public as an office.

     (5) Any location that is used primarily to engage in non-securities activities and from

which the associated person(s) effects no more than twenty-five (25) securities transactions in any

one calendar year; provided that any advertisement or sales literature identifying such location

also sets forth the address and telephone number of the location from which the associated

person(s) conducting business at the non-branch locations are directly supervised;

     (6) The floor of a registered national securities exchange where a broker-dealer conducts

a direct access business with public customers.

     (7) A temporary location established in response to the implementation of a business

continuity plan.

     (8) Notwithstanding the exclusions in paragraph (f), any location that is responsible for

supervising the activities of persons associated with the broker-dealer at one or more non-branch

locations of the broker-dealer is considered to be a branch office.

     (9) The term "business day" as used in subsection 7-11-206(f) shall not include any

partial business day provided that the associated person spends at least four (4) hours on such

business day at his or her designated branch office during the hours that such office is normally

open for business.

     (10) Where such office of convenience is located on bank premises, signage necessary to

comply with applicable federal and state laws, rules and regulations and applicable rules and

regulations of the New York Stock Exchange, other self-regulatory organizations, and securities

and banking regulators may be displayed and shall not be deemed "holding out" for purposes of

subdivision 7-11-206(f)(iv).

      (g) If an application is denied or withdrawn or the license is revoked, suspended, or

withdrawn, the director is not required to refund the fee paid.

      (h) The director may issue a stop order suspending the activities of a federal covered

adviser in this state if the director reasonably believes there has been a violation of the provisions

of this section.

 

     SECTION 2. This act shall take effect upon passage.

     

=======

LC02033/SUB B

=======