Dealer & Adviser Registration

State Securities Board personnel review all applications for the registration of dealers, agents, investment advisers, and investment adviser representatives to ensure that individuals and firms dealing with Texas investors meet certain minimum qualifications, are financially solvent, and of good business repute.

Each initial Dealer and Investment Adviser applicant undergoes a stringent review process that includes a review of their firm's application along with a review of the firm's formation documents, audited or certified balance sheet, and, if applicable, their client/advisory agreement. Each agent/investment adviser representative applicant must pass an examination requirement(s) and undergo an individual background check.

Section 14.A(1) and (2) of the Act allow the Securities Commissioner to deny registration to a person:

  • convicted of any felony, or
  • convicted of any misdemeanor which directly relates to the person's securities-realted duties and responsibilities.

Applications or background checks showing a criminal conviction are considered on a case-by-case basis. See Rule 115.6 and Rule 116.6. The Texas State Auditor's Office has published a useful guide for applicants in this situation - Best Practices Guide: Applying for an Occupational License After Conviction or Deferred Adjudication (SAO Report No. 20-32).

A person with a criminal history may also request the Agency issue a criminal history evaluation letter regarding the person's eligibility for a license prior to applying for a license. See Rule 104.7.

Individuals and firms offering or selling securities, or providing investment advice within the state for compensation, must be registered or notice-filed unless they meet the criteria for an exemption. Applicants must submit to an extensive background investigation, pass examinations on securities laws and principles, and comply with certain record-keeping and disclosure requirements.

The primary statutory requirements for the registration of dealers and investment advisers and their agents or representatives are found in Sections 12, 12-1, 13, 14, 18, 19, and 35 of the Texas Securities Act.

Rules for the registration of dealers and investment advisers are found in Chapters 115 and 116 of the Board Rules. Section 115.1(c) provides several categories of restricted registration for dealers, each of which permits registrants to deal exclusively in a certain type of securities or transactions.

Once registered, each registrant is required to timely, within 30 days, amend its information when an event occurs that causes an answer to a question on its application to become incorrect.

All registrations for dealers, investment advisers, and their agents or representatives expire at the end of each calendar year and must be renewed timely for the registrant to remain registered to do business in Texas.

The State Securities Board participates in the Central Registration Depository (CRD) system for the registration of securities dealers and agents. The registrations of investment advisers are processed through the Investment Adviser Registration Depository (IARD) system. The registration of investment adviser representatives are processed through the CRD system. These online systems enable dealers and investment advisers to register themselves and their agents and representatives in all desired states via a single electronic platform. Registration and renewal fees are collected through CRD and IARD and transferred electronically to the State.