General Information
Broker-Dealer

Under Indiana law, a broker-dealer is “a person engaged in the business of effecting transactions in securities for the account of others or for the person’s own account.” Most commonly, broker-dealers effect transactions in stocks, bonds, mutual funds and other investment products. Any transaction related to a security could involve the use of a broker-dealer. It is unlawful for a person to transact business as a broker-dealer in Indiana unless registered as a broker-dealer, exempt from registration, or otherwise excluded from the definition of a broker-dealer.

A broker-dealer conducting business in Indiana must register with the Securities and Exchange Commission (“SEC”) unless exempt from federal registration, as well as the Indiana Secretary of State, Securities Division (“Division”). All filings and associated fees are completed through the Central Registration Depository (“CRD”) system managed by the Financial Industry Regulatory Authority (“FINRA”). Any business registering with the Division needs a CRD number.

Broker-Dealer Agent

Under Indiana law, a broker-dealer agent is “an individual, other than a broker-dealer, who represents a broker-dealer in effecting or attempting to effect purchases or sales of securities or represents an issuer in effecting or attempting to effect purchases or sales of the issuer’s securities. However, a partner, officer, or director of a broker-dealer or issuer, or an individual having a similar status or performing similar functions is an agent only if the individual otherwise comes within the term.” Both the individual who effectuates transactions in Indiana, as well as the principals of the broker-dealer in Indiana are required to register as agents. Individuals that are exempt are not required to register as a broker-dealer agent.

In order to become registered in Indiana, a broker-dealer agent must pass the requisite examinations. A broker-dealer agent must pass the applicable required FINRA examinations and either the Uniform Securities Agent State Law Examination (Series 63) or the Uniform Combined State Law Examination (Series 66). If the individual has a period of non-registration of more than two (2) years, the examinations must be repeated. A broker-dealer agent may apply for a waiver of these examination requirements by submitting a Waiver Request to the Division.

All broker-dealer representative filings and associated fees are completed through the CRD system managed by the FINRA. Any individual registering with the Division needs a CRD number.

Requirements
Broker-Dealer Registration
  • The non-refundable initial filing fee is two hundred fifty dollars ($250) and is paid through FINRA. Each broker-dealer must register two principals pursuant to 710 IAC 4-7-2(d), however only one principal is required if the broker-dealer maintains no branch offices in any location (not including the broker-dealer’s principal place of business) and the broker-dealer employs no more than ten (10) agents in total. If the broker-dealer is eligible for waiver of the dual principal requirement, it may submit a Waiver Request to the Division.
    • The broker-dealer principals must pass appropriate principal FINRA examinations and register as a broker-dealer agent in order to supervise the activities of the broker-dealer in Indiana.
  • Form BD, the Uniform Application for Broker-Dealer Registration must be submitted through CRD with the filer requesting registration in Indiana.
  • The Division will provide the broker-dealer with a Portfolio number (Broker Dealer - P - ######) upon receipt of the application from FINRA.
  • In addition to the fields listed on the portal, the broker-dealer will be required to submit the broker-dealer’s:
    • Most recent audited financial statements;
    • Most recent FOCUS report; and
    • If the audited financial statements and/or the FOCUS report are more than sixty (60) days old, the broker-dealer must include an unaudited balance sheet.
  • If the firm will have a branch office or individual living in Indiana, a copy of the Certificate of Authority of a Foreign Corporation to Transact Business in Indiana must be submitted.
  • Approved registrations expire on December 31. In order to continue operating its business, a broker-dealer must submit a renewal registration and pay any associated fees
    • The non-refundable renewal filing fee is one hundred twenty-five dollars ($125) and is paid through FINRA.
    • As renewals are handled through CRD, it is vital to pay attention to the system’s annual Renewal Calendar to ensure that a renewal is submitted prior to any FINRA system shutdown.
Broker-Dealer Operation
  • Broker-Dealers are required to meet certain continuing obligations and requirements in order to operate in Indiana. The continuing obligations and requirements are in addition to any federal guidelines and may relate to the records maintenance, supervision, fee management, disclosures, and contract offerings to clients, among other topics. The requirements and obligations for broker-dealers are detailed in the Indiana Code and the Indiana Administrative Code. If a broker-dealer has questions regarding whether its activities comply with the outlined obligations, it should consult legal counsel or a compliance consultant.
  • Broker-Dealers must submit responses to the Annual Questionnaire upon initial registration and annually by March 31. Responses to the Annual Questionnaire must be submitted online.
  • The Senior Savings Protection legislation seeks to protect senior citizens and other financially vulnerable adults by requiring broker-dealers to report instances of suspected financial exploitation.
Broker-Dealer Agent Registration
  • The non-refundable initial filing fee is twenty-five dollars ($25) and is paid through FINRA.
  • In order to become registered in Indiana, a broker-dealer agent must be associated with a registered broker-dealer and pass the requisite examinations unless an examination waiver is approved.
    • To see if an individual meets the qualifications for an examination waiver, see the Waiver Request: General Information page and review the section titled “Examination Waiver: Broker-Dealer Agent”.
    • If an individual has not been registered for more than two years, the individual would need to be granted an examination waiver, otherwise the required examinations would need to be repeated.
  • Individuals will submit a Form U-4.
  • Approved registrations expire on December 31. In order to continue operating its business, a broker-dealer agent must submit a renewal registration and any associated fees.
    • The non-refundable renewal filing fee is twenty-five dollars ($25) and is paid through FINRA.
    • As renewals are handled through CRD, it is vital to pay attention to the system’s annual Renewal Calendar to ensure that a renewal is submitted prior to any FINRA system shutdown.
  • A broker-dealer agent may act as a broker-dealer agent for only one broker-dealer unless the broker-dealers are affiliated under direct or indirect common control.
    • To see if an individual meets the qualifications for a dual registration waiver, see the Waiver Request: General Information page and review the section titled “Dual Registration”.
Relevant Law

Indiana Code [23-19]
Indiana Administrative Code [710 IAC 4-7]
Temporary Relief for Registrants Affected by COVID-19 Outbreak [20-0010 AO - March 24, 2020]
Broker-Dealer and Agent Examinations [18-0002 AO - January 25, 2018]
Order Adopting Rule Amending 710 IAC 1-14-6 [05-0105 AO - September 8, 2005]
Statement of Policy Regarding Temporary Relief from Branch Examination Regulation [July 13, 2020]
Compliance Alert: Phishing Campaign Advisory - Phishing Email Campaign Impersonating FINRA Seeking Survey Responses [October 7, 2020]
Compliance Alert: Cybersecurity Advisory Issued by the Department of Homeland Security [July 20, 2020]
Compliance Alert: Temporary Relief from Branch Examination Regulation [July 13, 2020]
Compliance Alert: Phishing Campaign Advisory - Email Impersonating FINRA Executives [May 5, 2020]
Compliance Alert: Indiana Securities Division Response to the COVID-19 Outbreak [March 24, 2020]
Compliance Alert: Administrative Order 20-0010 AO Granting Temporary Relief for Registrants Affected by COVID-19 Outbreak [March 24, 2020]

Helpful Resources

Administrative Action Search
BrokerCheck by FINRA
File a Complaint
FINRA Annual Renewal Calendar
FINRA Broker-Dealer Firm Registration
FINRA Disciplinary Actions Online
FINRA Notice on Remote Work During COVID-19 Pandemic
FINRA Rules
NASAA - Broker-Dealers
SEC Guide to Broker-Dealer Registration

Division Personnel

Stephen Nelson
Compliance Officer
stnelson@sos.in.gov
317-232-0093