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Questions and Answers for Securities Professionals (Broker-Dealers, Broker-Dealer Agents, Agents of Issuers, Investment Advisers and Investment Adviser Representatives)

Question:
I wish to offer, purchase or sell securities or offer advisory services in the District of Columbia. Is there a ceiling on the number of District residents that I may have as clients without being required to have a District license?

Answer:
If you wish to offer, purchase or sell securities in the District of Columbia, you must be licensed as a broker-dealer or broker-dealer agent, no matter how few clients you have.  However, if you wish to offer investment advisory services to District residents, AND: 1) you have no place of business in the District; and 2) during the preceding 12 months you have had no more than five clients who are residents of the District, then you are not required to have a District license as an investment adviser or investment adviser representative.

Question:
How do I apply for a license as a broker-dealer, broker-dealer agent or investment adviser or investment adviser representative in the District of Columbia?

Answer:
To apply for a license as a broker-dealer, broker-dealer agent or investment adviser or investment adviser representative, a firm or individual must begin by submitting an initial application to Web/CRD/IARD systems. Contact the Financial Industry Regulatory Authority, Inc. (known as FINRA) at (301) 590-6500 or go to the FINRA website at www.crd.finra.org to link to Web/CRD/IARD for information. 

The District of Columbia requires additional documents to complete the filing of the initial application (i.e. the District of Columbia Clean Hands Form; the required Affidavits required and the Certification Form for the financial reports of a firm, which must be prepared within 30 days of the application).  These forms can be downloaded, or requested by email at maurice.goff@dc.gov

If you are a broker-dealer that is not a FINRA member, see section B of Initial Licensing of Broker-Dealers.  If you are an agent of a broker-dealer that is not a FINRA member, see section B of Initial Licensing of Broker-Dealers Agents.  If you are an agent of issuer, please contact maurice.goff@dc.gov.

Question:
Are there licensing requirements for those that wish to conduct investment seminars in the District of Columbia?

Answer:
The answer to this question depends on the facts and circumstances, including: the background of the organization and individuals that are conducting the seminar, whether the seminar is designed to present marketing information about investment services or products, or to offer, or obtain leads for offering, those services or products. Please contact the securities licensing division at maurice.goff@dc.gov before engaging in this activity.  

Question:
Do I need an investment adviser license to prepare and provide financial reports to broker-dealer or investment adviser firms in the District?

Answer:
The answer to this question will depend on how the definition of “Investment Adviser,”  and the investment adviser licensing provision in the Securities Act of 2000, Title 31 DC Code, Section 31-5601.01, et seq., apply to your facts and circumstances. Accordingly, we recommend that you obtain legal advice. After reviewing your contemplated activity in light of these provisions, you or your counsel may contact the securities licensing division at maurice.goff@dc.gov with any specific questions. 

Question:
Are broker-dealers required to file their Annual Audited Financial Statements with the D.C. Department of Insurance, Securities and Banking?

Answer:
If a D.C.-licensed broker-dealer is subject to, and in compliance with, the FINRA requirement to file its Audited Financial Statement with FINRA (SEC Rule 17a-5(d)); and if the broker-dealer is in compliance with the net capital requirements set forth in 26-B1 DCMR Sections 110 and 111, then the broker-dealer is not required to file an audited financial statement with the department. Please see the relevant DISB Bulletin: 05-SB-005 11/09 [PDF].