Section 710IAC4-7-2. Examination for registration

   (a) Unless specifically exempt, as hereinafter provided, the broker-dealer examinations in the form and content prescribed or approved by the commissioner must be taken and passed by every principal of a broker-dealer in order to test the principal's knowledge of:

(1) the securities business;

(2) state securities laws; and

(3) the responsibilities of a supervisor in the securities business;

before the applicant will be considered eligible for registration.

  (b) The commissioner shall establish or approve the standards for a minimum acceptable grade in determining each applicant's qualification for registration under this provision. The examination requirements for broker-dealer applicants shall be higher than those for agent applicants.

  (c) Upon failure to receive a minimum passing grade the principal of the broker-dealer applicant may retake the examination on the next date available. A second failure, or failure to take or retake the examination within a thirty (30) day period from the date the broker-dealer application was filed, shall be sufficient grounds for denial of the broker-dealer application and an order to that effect may be entered by the commissioner. The broker-dealer applicant shall be considered ineligible for licensing during a period of three (3) months, at which time a new broker-dealer application may be filed and its eligibility reexamined. The original filing fee shall not be refunded nor applied to a subsequent application for registration under this provision. However, if the:

(1) broker-dealer applicant is qualified;

(2) broker-dealer applicant meets the requirements of subsection (d); and

(3) principal of that applicant who fails the examination qualifies for an exemption under subsection (f);

then the broker-dealer application shall not be denied.

  (d) The following are the examination requirements for principals of a broker-dealer:

(1) In the case of:

(A) a partnership;

(B) a corporation; or

(C) another association;

(2) at least two (2):

(A) partners;

(B) officers;

(C) directors; or

(D) persons occupying a similar position;

(3) must satisfy the examination requirement.

(4) However, only one (1) of those persons must satisfy the examination requirement if the broker-dealer maintains no branch offices and employs no more than ten (10) agents.

  (e) An application shall be deemed incomplete until there is a showing of compliance with the examination requirements or an exemption from those requirements.

  (f) The examination requirements may be waived by a proper showing or certification that the applicant:

(1) has:

(A) taken an examination in the form and content approved by the commissioner within the preceding two (2) years; and

(B) passed the examination with the minimum acceptable passing grade for broker-dealer applicants; or

(2) has:

(A) taken an examination in the form and content prescribed or approved by the commissioner;

(B) attained an acceptable passing grade; and

(C) thereafter, remained continuously in the securities business, duly licensed by another state;

prior to making application.

(Securities Division; 710 IAC 4-7-2; filed Jun 28, 2010, 2:36 p.m.: 20100728-IR-710100044FRA; readopted filed May 12, 2016, 1:47 p.m.: 20160608-IR-710160136RFA)