Sec. 36b-6. (Formerly Sec. 36-474). Broker-dealer, agent or investment adviser required to register. Exemptions. Branch offices. Notice re termination of business.
Sec. 36b-6. (Formerly Sec. 36-474). Broker-dealer, agent or investment adviser required to register. Exemptions. Branch offices. Notice re termination of
business. (a) No person shall transact business in this state as a broker-dealer unless
such person is registered under sections 36b-2 to 36b-33, inclusive. No person shall
transact business in this state as a broker-dealer in contravention of a sanction that is
currently effective imposed by the Securities and Exchange Commission or by a self-regulatory organization of which such person is a member if the sanction would prohibit
such person from effecting transactions in securities in this state. No individual shall
transact business as an agent in this state unless such individual is (1) registered as an
agent of the broker-dealer or issuer whom such individual represents in transacting
such business, or (2) an associated person who represents a broker-dealer in effecting
transactions described in subdivisions (2) and (3) of Section 15(h) of the Securities
Exchange Act of 1934. No individual shall transact business in this state as an agent of
a broker-dealer in contravention of a sanction that is currently effective imposed by the
Securities and Exchange Commission or a self-regulatory organization of which the
employing broker-dealer is a member if the sanction would prohibit the individual employed by such broker-dealer from effecting transactions in securities in this state.
(b) No issuer shall employ an agent unless such agent is registered under sections
36b-2 to 36b-33, inclusive. No broker-dealer shall employ an agent unless such agent
is (1) registered under sections 36b-2 to 36b-33, inclusive, or (2) an associated person
who represents a broker-dealer in effecting transactions described in subdivisions (2)
and (3) of Section 15(h) of the Securities Exchange Act of 1934. The registration of an
agent is not effective during any period when such agent is not associated with a particular broker-dealer registered under sections 36b-2 to 36b-33, inclusive, or a particular
issuer. When an agent begins or terminates a connection with a broker-dealer or issuer,
or begins or terminates those activities which make such individual an agent, both the
agent and the broker-dealer or issuer shall promptly notify the commissioner.
(c) (1) No person shall transact business in this state as an investment adviser unless
registered as such by the commissioner as provided in sections 36b-2 to 36b-33, inclusive, or exempted pursuant to subsection (e) of this section. No person shall transact
business, directly or indirectly, in this state as an investment adviser if the registration
of such investment adviser is suspended or revoked or, in the case of an investment
adviser who is an individual, the investment adviser is barred from employment or
association with an investment adviser or broker-dealer by order of the commissioner,
the Securities and Exchange Commission or a self-regulatory organization.
(2) No individual shall transact business in this state as an investment adviser agent
unless such individual is registered as an investment adviser agent of the investment
adviser for which such individual acts in transacting such business. An investment adviser agent registered under sections 36b-2 to 36b-33, inclusive, who refers advisory
clients to another investment adviser registered under said sections 36b-2 to 36b-33,
inclusive, or to an investment adviser registered with the Securities and Exchange Commission that has filed a notice under subsection (e) of this section, is not required to
register as an investment adviser agent of such investment adviser if the only compensation paid for such referral services is paid to the investment adviser with whom the
individual is employed or associated. No individual shall transact business, directly or
indirectly, in this state as an investment adviser agent on behalf of an investment adviser
if the registration of such individual as an investment adviser agent is suspended or
revoked or the individual is barred from employment or association with an investment
adviser by an order of the commissioner, the Securities and Exchange Commission or
a self-regulatory organization.
(3) No investment adviser shall engage an investment adviser agent unless such
investment adviser agent is registered under sections 36b-2 to 36b-33, inclusive. The
registration of an investment adviser agent is not effective during any period when such
investment adviser agent is not associated with a particular investment adviser. When
an investment adviser agent begins or terminates a connection with an investment adviser, both the investment adviser agent and the investment adviser shall promptly notify
the commissioner. If an investment adviser or investment adviser agent provides such
notice, such investment adviser or investment adviser agent shall not be liable for the
failure of the other to give such notice.
(d) No broker-dealer or investment adviser shall transact business from any place
of business located within this state unless that place of business is registered as a branch
office with the commissioner pursuant to this subsection. An application for branch
office registration shall be made on forms prescribed by the commissioner and shall be
filed with the commissioner, together with a nonrefundable application fee of one hundred dollars per branch office. A broker-dealer or investment adviser shall promptly
notify the commissioner in writing if such broker-dealer or investment adviser (1) engages a new manager at a branch office in this state, (2) acquires a branch office of
another broker-dealer or investment adviser in this state, or (3) relocates a branch office
in this state. In the case of a branch office acquisition or relocation, such broker-dealer
or investment adviser shall pay to the commissioner a nonrefundable fee of one hundred
dollars. Each registrant or applicant for branch office registration shall pay the actual
cost, as determined by the commissioner, of any reasonable investigation or examination
made of such registrant or applicant by or on behalf of the commissioner.
(e) The following investment advisers are exempted from the registration requirements under subsection (c) of this section: Any investment adviser that (1) is registered
or required to be registered under Section 203 of the Investment Advisers Act of 1940;
(2) is excepted from the definition of investment adviser under Section 202(a)(11) of
the Investment Advisers Act of 1940; or (3) has no place of business in this state and,
during the preceding twelve months, has had no more than five clients who are residents
of this state. Any investment adviser claiming an exemption pursuant to subdivision (1)
or (2) of this subsection that is not otherwise excluded under subsection (11) of section
36b-3, shall first file with the commissioner a notice of exemption together with a consent
to service of process as required by subsection (g) of section 36b-33 and shall pay to
the commissioner or to any person designated by the commissioner in writing to collect
such fee on behalf of the commissioner a nonrefundable fee of two hundred fifty dollars.
The notice of exemption shall contain such information as the commissioner may require. Such notice of exemption shall be valid until December thirty-first of the calendar
year in which it was first filed and may be renewed annually thereafter upon submission
of such information as the commissioner may require together with a nonrefundable fee
of one hundred fifty dollars. If any investment adviser that is exempted from registration
pursuant to subdivision (1) or (2) of this subsection fails or refuses to pay any fee required
by this subsection, the commissioner may require such investment adviser to register
pursuant to subsection (c) of this section. For purposes of this subsection, a delay in the
payment of a fee or an underpayment of a fee which is promptly remedied shall not
constitute a failure or refusal to pay such fee.
(f) Any broker-dealer or investment adviser ceasing to transact business at any
branch office or main office in this state shall, in addition to providing written notice
to the commissioner prior to the termination of business activity at that office, (1) provide
written notice to each customer or client serviced by such office at least ten business
days prior to the termination of business activity at that office, or (2) demonstrate to the
commissioner, in writing, the reasons why such notice to customers or clients cannot
be provided within the time prescribed. If the commissioner finds that the broker-dealer
or investment adviser cannot provide notice to customers or clients at least ten business
days prior to the termination of business activity, the commissioner may exempt the
broker-dealer or investment adviser from giving such notice. The commissioner shall
act upon a request for such exemption within five business days following receipt by
the commissioner of the written request for such an exemption. The notice to customers
or clients shall contain the following information: The date and reasons why business
activity will terminate at the office; if applicable, a description of the procedure the
customer or client may follow to maintain the customer's account at any other office
of the broker-dealer or investment adviser; the procedure for transferring the customer's
or client's account to another broker-dealer or investment adviser; and the procedure
for making delivery to the customer or client of any funds or securities held by the
broker-dealer or investment adviser.
(g) Any broker-dealer or investment adviser ceasing to transact business at any
branch office or main office in this state as a result of executing an agreement and plan
of merger or acquisition shall provide written notice to the commissioner and to each
customer or client serviced by such office not later than the date such merger or acquisition is completed. The notice provided to each customer or client shall contain the
information specified in subsection (f) of this section.
(h) Any broker-dealer or investment adviser ceasing to transact business at any
branch office or main office in this state as a result of the commencement of a bankruptcy
proceeding by such broker-dealer or investment adviser or by a creditor or creditors of
such broker-dealer or investment adviser shall, immediately upon the filing of a petition
with the bankruptcy court, provide written notice to the commissioner. The commissioner shall determine the time and manner in which notice shall be provided to each
customer or client serviced by such office.
(i) (1) A broker-dealer or investment adviser may succeed to the current registration of another broker-dealer or investment adviser or to a notice filing of an investment
adviser registered with the Securities and Exchange Commission, and an investment
adviser registered with the Securities and Exchange Commission may succeed to the
current registration of an investment adviser or to a notice filing of another investment
adviser registered with the Securities and Exchange Commission, by filing as a successor
an application for registration pursuant to section 36b-7 or a notice pursuant to subsection
(e) of this section for the unexpired portion of the current registration or notice filing
and paying the fee required by subsection (a) of section 36b-12.
(2) A broker-dealer or investment adviser that changes its form of organization or
state of incorporation or organization may continue its registration by filing an amendment to its registration if the change does not involve a material change in its management. The amendment shall become effective when filed or on a date designated by the
registrant in its filing. The new organization shall be a successor to the original registrant
for the purposes of sections 36b-2 to 36b-33, inclusive. If there is a material change in
management, the broker-dealer or investment adviser shall file a new application for
registration. A predecessor registered under sections 36b-2 to 36b-33, inclusive, shall
stop conducting its securities business or investment advisory business other than winding down transactions and shall file for withdrawal of its broker-dealer or investment
adviser registration not later than forty-five days after filing its amendment to effect
succession.
(3) A broker-dealer or investment adviser that changes its name may continue its
registration by filing an amendment to its registration. The amendment shall become
effective when filed or on a date designated by the registrant.
(4) The commissioner may, by regulation adopted, in accordance with chapter 54, or
order, prescribe the means by which a change of control of a broker-dealer or investment
adviser may be made.
(5) Nothing in this subsection shall relieve a registrant of its obligation to pay agent
and investment adviser agent transfer fees as described in subsection (d) of section
36b-12.
(j) The commissioner may, by regulation adopted, in accordance with chapter 54,
or order, require an agent or investment adviser agent to participate in a continuing
education program approved by the Securities and Exchange Commission and administered by a self-regulatory organization or, in the absence of such a program, the commissioner may require continuing education for registered investment adviser agents by
regulation or order.
(k) For purposes of subsections (d), (f), (g) and (h) of this section, "investment
adviser" means an investment adviser registered or required to be registered with the
commissioner.
(P.A. 77-482, S. 5; P.A. 81-292, S. 3; P.A. 83-368, S. 3, 11; P.A. 85-169, S. 3, 11; P.A. 87-375, S. 2; P.A. 89-220, S.
2; P.A. 97-220, S. 3, 15; P.A. 98-162, S. 3; P.A. 04-45, S. 1; P.A. 05-177, S. 2.)
History: P.A. 81-292 inserted a new Subsec. (c) providing that offers or sales of securities relating to oil, gas or other
mining commodities must be made through a registered broker-dealer, and relettered the former Subsec. (c) accordingly;
P.A. 83-368 deleted the provisions of former Subsec. (c) re offers or sales with respect to oil, gas or mining limited
partnerships, relettering former Subsec. (d) accordingly; P.A. 85-169 added Subsecs. (d), (e) and (f) re notice of termination
of business; P.A. 87-375 amended Subsec. (c) to add provisions re connections between investment advisors and agents
and to require that agents be registered; P.A. 89-220 amended Subsec. (a) by requiring an agent to register as an agent of a
particular broker-dealer or issuer, amended Subsec. (c) by requiring an investment advisor agent to register as an investment
advisor agent of a particular investment advisor, added a new Subsec. (d) re registration of branch offices and relettered
the remaining Subsecs. accordingly, amending Subsecs. (e), (f) and (g) by extending the requirements of the subsections
to investment advisors; Sec. 36-474 transferred to Sec. 36b-6 in 1995; P.A. 97-220 amended Subsecs. (a) and (b) by adding
exception for associated persons representing broker-dealers in effecting specified transactions, amended Subsec. (c) by
adding reference to Subsec. (e) and making a technical change, added new Subsec. (e) re exemptions from investment
adviser registration requirements, redesignated former Subsecs. (e), (f) and (g) as Subsecs. (f), (g) and (h), and made
Subsecs. (f), (g) and (h) applicable to any broker-dealer or investment adviser ceasing to transact business at any office in
this state, effective July 1, 1997; P.A. 98-162 amended Subsec. (d) to establish branch office requirements for investment
advisers registered with the Securities and Exchange Commission and to make technical changes; P.A. 04-45 amended
Subsec. (a) to prohibit transaction of business in this state as a broker-dealer or agent in contravention of a sanction currently
effective imposed by SEC or a self-regulatory organization and to make technical changes, amended Subsecs. (b) and (c)
to make technical changes, amended Subsec. (d) to eliminate provisions re investment advisers registered with SEC,
amended Subsec. (f) to make technical changes, and added Subsec. (i) defining "investment adviser" for purposes of
Subsecs. (d), (f), (g) and (h); P.A. 05-177 amended Subsec. (a) to delete provisions re self-regulatory organization registered
under federal laws administered by Securities and Exchange Commission, amended Subsec. (c) to insert Subdiv. designators
(1) to (3), make technical changes, prohibit persons from transacting business in this state as an investment adviser if the
registration of such investment adviser is suspended or revoked or, in the case of an investment adviser who is an individual,
the investment adviser is barred from employment or association with an investment advisor or broker-dealer by order of
commissioner, the Securities and Exchange Commission or a self-regulatory organization in Subdiv. (1), provide that a
registered investment adviser agent who refers advisory clients to another registered investment adviser does not have to
register as an investment adviser agent of such investment adviser if the only compensation paid for such referral services
is to the investment adviser with whom the individual is employed or associated and prohibit individuals from transacting
business in this state as an investment adviser agent on behalf of an investment adviser if the registration of such individual
as an investment adviser agent is suspended or revoked or the individual is barred from employment or association with
an investment adviser by order of commissioner, the Securities and Exchange Commission or a self-regulatory organization
in Subdiv. (2), amended Subsec. (e) to make technical changes and to provide that nonrefundable fee of $250 be paid to
commissioner or to any person designated by commissioner in writing to collect such fee on behalf of commissioner,
amended Subsecs. (f) to (h) to substitute "any branch office or main office in this state" for "any office in this state",
inserted new Subsec. (i) re procedure for broker-dealers or investment advisers to succeed to the current registration of
another broker-dealer or investment adviser or to a notice filing of a registered investment adviser, procedures for broker-dealers or investment advisers to file an amendment to their registrations if they change their form of organization, state
of incorporation, organization or name, and authority of commissioner to prescribe the means by which change of control
of a broker-dealer or investment adviser may be made, added new Subsec. (j) authorizing commissioner to require an agent
or investment adviser agent to participate in continuing education, and redesignated existing Subsec. (i) as Subsec. (k).
Annotations to former section 36-474:
Subsec. (a) and (d) cited. 39 CS 462.
Annotation to present section:
Cited. 233 C. 352.