Procedures for notice filing and licensing; rules; examination; bond, letter of credit or other security; insurance; filing trade name or assumed business name; fees
(1)The Director of the Department of Consumer and Business Services by rule shall establish procedures for notice filings required of federal covered investment advisers as well as procedures for licensing broker-dealers, state investment advisers, investment adviser representatives and salespersons. The director may coordinate notice filings or licensing with any national registration, licensing or notice filing system.
(2)The director may require an applicant for a license as a broker-dealer or state investment adviser, including the applicant’s partners, directors, officers or any person occupying a similar status or performing similar functions, and any person directly or indirectly controlling such applicant and a person for whom application for a license as a salesperson or investment adviser representative is made, to pass an examination on such person’s knowledge and understanding of the Oregon Securities Law and the securities business. The director may establish by rule a fee for the examination.
(3)The director may make such further examination of the applicant and the applicant’s affairs as the director deems advisable and may require by rule or order that the applicant publish an announcement of the application in such manner as the director may specify.
(4)(a) Except as otherwise provided in paragraph (b) or (c) of this subsection, every applicant for a license as a broker-dealer or state investment adviser shall file with the director a corporate surety bond or irrevocable letter of credit issued by an insured institution as defined in ORS 706.008 (Additional definitions for Bank Act) or such other security as the director may approve by rule running to the State of Oregon in a sum to be established by rule of the director, but in no event more than $100,000.
(b)Licensed broker-dealers subject to section 15 of the Securities Exchange Act of 1934, as amended, are not required to comply with paragraph (a) of this subsection, nor are such licensed broker-dealers required to comply with any net capital requirements imposed by the director by rule or otherwise.
(c)A licensed state investment adviser who has its principal place of business in a state other than this state shall be exempt from the requirements of paragraph (a) of this subsection and from any net capital requirements imposed by the director by rule or otherwise, as long as the licensed state investment adviser is:
(A)Registered or licensed as a state investment adviser in the state where it maintains its principal place of business; and
(B)In compliance with the bonding or net capital requirements of the state where it maintains principal place of business.
(5)(a) Except as otherwise provided in paragraph (b) or (c) of this subsection, every applicant for a license or renewal of a license as a broker-dealer or state investment adviser shall file with the director proof that the applicant maintains an errors and omissions insurance policy in an amount of at least $1 million from an insurer authorized to transact insurance in this state or from any other insurer approved by the director according to standards established by rule.
(b)A licensed broker-dealer subject to section 15 of the Securities Exchange Act of 1934, as amended, is not required to comply with paragraph (a) of this subsection.
(c)A licensed state investment adviser who has its principal place of business in a state other than this state is exempt from the requirements of paragraph (a) of this subsection.
(6)(a) Subject to paragraph (b) of this subsection, if the application, surety bond, irrevocable letter of credit or other security, errors and omissions insurance policy and fees are in order and the director is satisfied that the application should not be denied upon one or more of the grounds specified in ORS 59.205 (Grounds for denying, suspending, revoking or imposing condition or restriction on license) to 59.225 (Cancellation of license or application), the director shall license the broker-dealer, state investment adviser, salesperson or investment adviser representative.
(b)If the director determines under ORS 59.205 (Grounds for denying, suspending, revoking or imposing condition or restriction on license) or 59.215 (Action against applicant or licensee for act or omission of associate) that a condition or restriction should apply to the license, the director, at the time the license is issued, shall specify in writing to the licensee the condition or restriction applicable to the license.
(7)A licensee under ORS 59.165 (Licensing of broker-dealers, investment advisers and salespersons required) shall amend the license application when there are material changes in the information contained in the original application.
(8)An applicant for or a person holding a license issued under ORS 59.005 (Short title) to 59.505 (Provision of records to law enforcement and certain state agencies) may file with the director a trade name, as defined in ORS 647.005 (Definitions), or an assumed business name, as defined in ORS 648.005 (Definitions). The trade name or assumed business name shall be filed in a form and manner established by rule by the director. If the application is complete and the fee described in subsection (9) of this section is paid, the director shall issue an order authorizing the licensee to operate under the trade name or assumed business name. The order shall remain in effect until canceled, suspended or revoked.
(9)The director shall charge and collect fees for:
(a)An application for a license as a broker-dealer or state investment adviser;
(b)An application to renew a license as a broker-dealer or state investment adviser;
(c)An application for a license as a salesperson;
(d)An application to renew a license as a salesperson;
(e)An application for a license as an investment adviser representative;
(f)An application to renew a license as an investment adviser representative;
(g)A notice filing for a federal covered investment adviser;
(h)A notice filing renewal for a federal covered investment adviser; and
(i)A filing for use of a trade name or an assumed business name.
(10)(a) The director shall set the fees described in subsection (9) of this section in an amount that the director determines is equal as nearly as possible to the national midpoint for similar fees charged by all other state regulatory agencies within the United States responsible for regulating securities.
(b)The director may adjust the amount of a fee described in subsection (9) of this section every two years to reflect changes in the national midpoint for a similar fee.
(c)In determining the national midpoint for similar fees under this section, the director may consider national midpoints determined by the North American Securities Administrators Association, the National Association of Securities Dealers or the United States Securities and Exchange Commission.
(11)Except as provided in this subsection, the fees under this section are not refundable. The director may provide for a method of equitably adjusting the payment of fees for broker-dealers, federal covered investment advisers, state investment advisers, salespersons and investment adviser representatives when the director determines that the changes in filing periods and expiration dates under ORS 59.185 (Expiration of license) are not equitable for the person making the payment. [1967 c.537 §18; 1969 c.137 §4; 1971 c.624 §3; 1985 c.349 §17; 1987 c.603 §11; 1989 c.197 §9; 1991 c.331 §16; 1993 c.508 §31; 1997 c.631 §376; 1997 c.772 §16; 1999 c.53 §3; 2001 c.32 §2; 2003 c.270 §5; 2003 c.785 §4; 2017 c.313 §1]
Notes of Decisions
An action on the bond under this section is not subject to the three-year statute of limitations under ORS 59.115. State ex rel Healy v. Maryland Cas. Co. and Deal, 27 Or App 735, 557 P2d 258 (1976), Sup Ct review denied
Successive bonds were correctly construed as cumulative where the bonds did not provide for limited or aggregate liability. State ex rel Healy v. Maryland Cas. Co. and Deal, 27 Or App 735, 557 P2d 258 (1976), Sup Ct review denied
Notes of Decisions
Public policy does not prohibit nonculpable corporate directors held liable under this chapter from seeking indemnification from persons actually responsible for the wrongful issuance of unregistered securities. Collins v. Fitzwater, 277 Or 401, 560 P2d 1074 (1977)
Atty. Gen. Opinions
Additional real estate license not required where security sold is interest in limited partnership to invest in real estate, (1978) Vol 38, p 1971