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Broker-Dealer Registration: Where to File

Before opening for business, a broker-dealer has to comply with a number of requirements. This topic briefly explains the steps that are required to register as a broker-dealer. For more information, read our publication, Compliance Guide to the Registration and Regulation of Brokers and Dealers.

The SEC Must Grant Registration

To register with the SEC, you must file one completed copy of Form BD through the Central Registration Depository, operated by NASD. The only exception is for banks registering as municipal securities dealers, which file Form MSD directly with the SEC. The SEC does not charge a filing fee. Applicants that reside outside the U.S. must appoint the SEC as agent for service of process. The SEC will return an application if it is incomplete.

Within 45 days of filing an application, the SEC must either grant registration or begin proceedings to determine whether it should deny registration. Broker-dealers must also update Form BD by filing amendments whenever the information becomes inaccurate or incomplete.

Become a Member of a Self-Regulatory Organization

In addition to registering with the SEC, a broker-dealer applicant must become a member of a self-regulatory organization (SRO) - NASD, a national securities exchange, or both. SROs may charge a fee and, unlike the SEC, do not have to act within 45 days. "Associated persons" of broker-dealers, which include their salespeople, must register with an SRO and, if they trade securities, satisfy their qualification requirements.

Comply With Any State Requirements

Each state where the broker-dealer wants to operate may have its own registration requirements. You can visit the website of the North American Securities Administrators Association, Inc. for a list of your state securities regulators so you can contact them to find out their requirements.

Become a Member of the Securities Investor Protection Corporation

In most cases, broker-dealers must also be members of the Securities Investor Protection Corporation, a non-profit entity that assists investors when their brokerage firms go bankrupt or otherwise fail.