Broker - Dealer Registration
Securities Exam Preparation’s focus is to provide self-study test preparation for FINRA, NASAA, and CFTC exams. Clients often ask, however, if we assist in the application process of forming a Broker-Dealer. SEP does not help with FINRA applications but over the years we’ve found (and learned from our customers) various firms that can assist in forming a Broker-Dealer. Through that process we pass the information on to our clients. Below are some of the reasons to use a consultant.
The use of a consultant oftentimes allows you to complete the FINRA Broker-Dealer registration process in an efficient way.
Registration as a “B-D” oftentimes takes 90 to 180+ days. The time depends on complexity of the business, whether necessary exams have been completed, and if the firm is adequately capitalized. Paperwork is filed with Financial Industry Regulatory Authority (“FINRA”), the Securities and Exchange Commission (“SEC”), and each state in which the firm conducts its business.
Here are some of the reasons to use a Professional Consultant:
PRIOR to filing an application, you must consider:
- What type of entity will the firm choose to be?
- Corporation, Partnership, LLC?
- What type of broker-dealer operation will the firm be?
- Full-service Broker Dealer with all general securities?
- Limited Broker Dealer selling:
- mutual funds — limited partnerships — corporate securities?
- Will the firm maintain a “clearing” or “fully disclosed” agreement with another firm?
- Which firm?
- What types of securities registrations will the broker-dealer personnel be required to maintain?
- Will the firm be required to employ a Financial and Operations Principal?
- What are the minimum net capital requirements?
…plus other strategic decisions…
Some of the key steps in setting up a B/D are:
- Receive, complete, and send your application to FINRA
- Have your application assigned to an examiner in the FINRA District Office
- Provide additional support to the examiner
- Create a Business Plan
- Pass the appropriate FINRA exams, which generally include:
- Attend a Pre-Membership Interview (“PMI”)
- Respond to a Voluntary Restriction Letter
- Director Review
- District Conduct Committee Review
- File with State Securities Commissioners