TITLE 7
Corporations, Associations, and Partnerships

CHAPTER 7-11
Rhode Island Uniform Securities Act

PART 7-11-201
Licensing of Broker Dealers, Sales Representatives, and Investment Advisers and Investment Adviser Representatives

SECTION 7-11-202


§ 7-11-202 Exempt broker dealers and sales representatives.

(a) The following broker dealers are exempt from the licensing requirements of § 7-11-201:

(1) A broker dealer who either is registered or, except as provided in subsection (b) of this section, is not required to be registered under the Securities Exchange Act of 1934, 15 U.S.C. § 78a et seq., and who has no place of business in this state if:

(i) The transactions effected by the broker dealer in this state are exclusively with the issuer of the securities involved in the transactions, other broker dealers licensed or exempt under this chapter, and financial or institutional investors;

(ii) The broker dealer is licensed under the securities act of a state in which the broker dealer maintains a place of business and the broker dealer offers and sells in this state to a person who is an existing customer of the broker dealer and whose principal place of residence is not in this state; and

(2) Other broker dealers the director, by rule or order, exempts.

(b) The exemption provided in paragraph (a)(1)(i) of this section is not available to a broker dealer who deals solely in governmental securities and is not registered under the Securities Exchange Act of 1934, 15 U.S.C. § 78a et seq., unless the broker dealer is subject to supervision as a dealer in government securities by the federal reserve board.

(c) The following sales representatives are exempt from the licensing requirements of § 7-11-201:

(1) A sales representative acting for a broker dealer exempt under subsection (a) of this section;

(2) A sales representative acting exclusively for an issuer in effecting transactions in a security exempted by § 7-11-401(1) – (4) and (10) – (12);

(3) A sales representative acting for an issuer effecting offers or sales of securities in transactions exempted by § 7-11-402;

(4) A sales representative acting for an issuer effecting transactions with employees, partners, officers, or directors of the issuer, a parent or a wholly owned subsidiary of the issuer, if no commission or other similar compensation is paid or given directly or indirectly to the sales representative for soliciting an employee, partner, officer, or director in this state;

(5) A sales representative acting for an issuer effecting offers or sales of securities that are covered securities under § 18(b)(3) or § 18(b)(4)(D) of the securities act of 1933, 15 U.S.C. § 77r(b)(3) or 77r(b)(4)(D), provided that no commission or other remuneration is paid or given directly or indirectly for soliciting any person in this state;

(6) A sales representative whose transactions in this state are limited to only those transactions set forth in § 15(h)(2) of the Securities Exchange Act of 1934, 15 U.S.C. § 78o(h)(2); and

(7) Other sales representatives that the director exempts by rule or order.

History of Section.
(P.L. 1990, ch. 460, § 2; P.L. 1997, ch. 69, § 1; P.L. 2002, ch. 422, § 1.)