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disb

Department of Insurance, Securities and Banking

Licensing Requirements for Fintech Companies in the Securities Industry

LICENSING REQUIREMENTS

The DISB Office of Innovation and the Securities Bureau want fintech companies to be aware of broker-dealer and investment adviser licensing requirements in the District of Columbia.

BROKER-DEALERS

Under the Code of the District of Columbia, no person shall transact business in the District of Columbia as a broker-dealer unless the person is licensed or exempt from the licensing requirement.

Most broker-dealers must register with the Securities and Exchange Commission (SEC) and become members of the Financial Industry Regulatory Authority (FINRA). A broker-dealer that conducts all of its business exclusively in the District of Columbia does not have to register with the SEC and become a FINRA member. To qualify for this exception, all securities transactions must be done within the borders of the District.

The filing procedures for FINRA members are different from the filing procedures for non-FINRA members. For information about licensing procedures for broker-dealers who are FINRA members, see section A of Initial Licensing of Broker-Dealers (Firms). For information about licensing procedures for non-FINRA members, see section B of Initial Licensing of Broker-Dealers (Firms).

Broker-dealers must submit a Form U4 and the license application fee for all persons who will work as agents of broker-dealers. For initial filing information for agents of FINRA member firms, see section A of Initial Licensing of Broker-Dealers Agents. For Agents of non-FINRA member firms, see section B of Initial Licensing of Broker-Dealers Agents.

INVESTMENT ADVISERS

Under the Code of the District of Columbia, no person shall transact business in the District of Columbia as an investment adviser unless the person is licensed or exempt from the licensing requirement.

Federal Covered Advisers (FCAs) are registered with the SEC. Non-Federal or State-Covered Investment Advisers (SCIAs) that engage in the District of Columbia in the business of advising others as to securities or as to the advisability of investing in, purchasing, or selling securities, or that issue or promulgate analyses or reports concerning securities in the District of Columbia must be licensed by DISB.

The filing procedures for FCAs are different from the filing procedures for SCIAs. For information about licensing procedures for FCAs, see Initial Notice Filing of FCAs. For information about licensing procedures for SCIAs, see Initial Licensing of SCIAs.

Investment Advisers must submit, through IARD, a Form U4 and the license application fee for all persons who will work as IARs. For Initial Filing Information for Representatives of either Federal-Covered or State-Covered Advisers, see Initial Filings of Investment Adviser Representatives.

For more information regarding securities compliance requirements with DISB, click here.