Chapter 4

BROKER-DEALER REGULATIONS

Section 1.                Initial Registration.  An applicant seeking broker-dealer registration in Wyoming:

(a)              Shall make initial application by completing the Form BD in accordance with the form instructions, filing the form with the CRD, and paying the fee set forth in W.S. §17-4-410.

(b)              Shall supply their last annual audited financial statement prepared by an independent certified public accountant and filed with the SEC pursuant to SEC Rule 17a-5(d).

(i)                If a recently formed broker-dealer does not have an audited financial statement, an unaudited financial statement may be substituted if it has been signed and dated within 90 days of the date of application by an appropriate officer or principal of the broker-dealer. A copy of SEC Form X-17A-5 (Focus Report Part II or IIA) may be used as an unaudited financial statement provided that document includes Part II or Part IIA dated within 90 days of the date of application.

(ii)              The unaudited financial statement shall contain a compilation of net capital figured according to net capital regulations contained in federal laws and rules.

(c)              Shall supplement the audited financial statement with the latest SEC Form X-17a-5 (Focus Report Part II or IIA). If the applicant does not report using the FOCUS Part II or IIA, an applicant may instead submit an unaudited financial statement signed and dated within 90 days of the date of application by an appropriate officer or principal of the broker-dealer which contains a statement of net capital compliance.

(d)              Shall be registered with or be a member in good standing with the SEC and the appropriate Self-Regulatory Organization ("SRO") prior to submission of an initial application for broker-dealer registration.

Section 2.                Registration Procedures.

(a)              When registering a broker-dealer, the Secretary of State may:

(i)                Accept application materials by email addressed to compliance@wyo.gov.

(ii)              Accept an initial application pursuant to this section and delay the effectiveness of the registration until January 1 at the request of the applicant provided the information on Form BD remains current.

Section 3.                General Broker-Dealer Requirements.

(a)              Compliance with all current SEC regulations is a condition of registration as a broker-dealer in Wyoming.

(b)              Upon request broker-dealers may be required to provide the Secretary of State any notices, computations, and reports required for submission to the SEC or an SRO.

(c)              Broker-dealers shall make, maintain and preserve books and records in compliance with SEC Rules and make them available for inspection to the Secretary of State upon request.

(d)              Following initial registration approval, broker-dealers shall file amendments to Form BD with the CRD system whenever the information on file with the CRD becomes inaccurate, but not later than 30 days following any material change.

(e)              Shall remain in good standing with the SEC and the appropriate SRO. The Secretary of State may summarily suspend any broker-dealer registration if that broker-dealer is not registered in good standing with the SEC and the appropriate SRO.

Section 4.                Renewal.

(a)              Every broker-dealer registered in Wyoming which desires to renew its registration shall renew through the CRD and follow the renewal procedures established by the CRD of each year.

(b)              If renewal fees are not paid on or before the cut-off date established by the CRD, a broker-dealer's registration may be subject to administrative action on January 1 or thereafter for willful failure to comply with any provision of the Act or rules following notice, opportunity for hearing, and written findings of fact and conclusions of law.

(i)                Notice, as contemplated in this section, shall be given by the Secretary of State via a letter to the broker-dealer's last known address advising the broker-dealer of its failure to renew and need for immediate compliance;

(ii)              To the extent the broker-dealer cannot be located, mailing a copy of any Order Canceling Broker-Dealer Registration to the broker-dealer's last known address shall be deemed sufficient notice and service by the Secretary of State of the requirement and failure of the broker-dealer to renew;

(c)              Broker-dealers which do not participate in CRD renewal by the CRD cut-off date, but which contact the Secretary of State and deliver the appropriate renewal fees for the broker-dealer and agents before a final Order of revocation is entered, may have their registration renewed for another year subject to payment of an administrative penalty pursuant to W.S. §17- 4-412 in an amount not to exceed two hundred dollars ($200) for failure to comply with the Act and Rules.

Section 5.                Termination/Cancellation.  A broker-dealer desiring to end its registration in Wyoming shall submit executed Form BDW with the CRD.

Section 6.                Conduct.  Every broker-dealer shall observe high standards of commercial honor and just and equitable principles of trade in the conduct of their business. Acts and practices including but not limited to items set forth by NASAA on DISHONEST OR UNETHICAL BUSINESS PRACTICES OF BROKER-DEALERS AND AGENTS (Statement of Policy) adopted May 23, 1983 (found at nasaa.org), herein incorporated by reference, may be considered contrary to such standards. These acts and practices may constitute dishonest or unethical practices as found in W.S. §17-4-412(d)(xiii) or other listed grounds for denial, suspension or revocation of registration, monetary penalty or such other action authorized by statute.

Section 7.                Required Disclosures for Investments that Incorporate a Social Objective.

(a)              If a broker-dealer incorporates a social objective into a discretionary investment decision to buy or sell a security or commodity for a customer or client, a recommendation or solicitation to a customer or client for the purchase or sale of a security or commodity, or the selection, recommendation or advice to a customer or client regarding the selection of a third-party manager or subadviser to manage the investments in the customer or client's account, then such broker-dealer shall disclose to such customer or client the existence of such incorporation.

(b)              The disclosure obligation under subsection (a) of this section is satisfied by providing clear and conspicuous disclosure, via written communication. Thereafter, the disclosure shall be provided to the customer or client on an annual basis and whenever the broker-dealer undergoes a suitability review with a customer.