Here are some answers to questions we receive frequently from professionals wishing to conduct business in securities in North Carolina. We provide this for informational purposes only. It does not constitute legal advice.

1 Do people and firms have to register with the government before selling investments or providing advice about investments for a fee?
2 How do I contact the Securities Division?
3 What fees must I pay under the NC Securities Act and the Investment Adviser Act?
4 What forms do I use to apply for a registration or exemption with the Securities Division and where can I find them?
5 Whom do I pay?
6 May a securities salesman register with more than one broker-dealer firm at a time?
7 ”May an investment adviser representative register with more than one firm at a time?
8 I am an insurance agent residing outside North Carolina who wishes to sell variable annuities in North Carolina. What do I need to do?
9 Where can I find the state laws governing stockbrokers and investment advisers?
10 What is the Qualified Business Tax Credit Program, and how does it work?

 


1. Do people and firms have to register with the government before selling investments or providing advice about investments for a fee?

In most cases, the person selling an investment must register to do so. This also applies to anyone paid to provide investment advice. In most cases, firms offering securities must register them. Broker-dealers, investment advisers and their representatives must register with the Securities Division or qualify to register with the U.S. Securities and Exchange Commission (SEC). They must provide full information about themselves, their firms and their products. Click here for more information.

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2. How do I contact the Securities Division?

You may contact us at the following:

Mailing Address Street Address
NC Department of the Secretary of State
Securities Division
PO Box 29622
Raleigh, NC 27626-0622
NC Department of the Secretary of State
Securities Division
4701 Atlantic Avenue, Suite 116
Raleigh, NC 27604

Telephone: (919) 733-3924 or toll-free (800) 688-4507
Fax: (919) 807-2183.
Email: secdiv@sosnc.com

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3. What fees must I pay under the NC Securities Act and the Investment Adviser Act?

Fee Schedule
Registration/Filing: Amount When is it due and how often is it paid?
Securities Dealer $300.00 On initial registration and then on annual renewal before the CRD cut-off in mid-December of each year
Securities Salesperson $125.00 On initial registration and then on annual renewal before the CRD cut-off in mid-December of each year
Investment Adviser $300.00 On initial registration and then on annual renewal before the CRD cut-off in mid-December of each year
Investment Adviser Representative $75.00 On initial registration and then on annual renewal before the CRD cut-off in mid-December of each year
Registered public offering of securities $2,000.00 On initial application
Notice filing for investment company securities $1,725.00 plus $275.00 for each series, fund or portfolio offered in North Carolina On initial notice filing and then on annual renewal
Notice filing for Rule 506 transaction $350.00 One-time fee per offering due within 15 days of first sale in NC
Exemption notice for a limited offering subject to Rule .1205(b) $150.00 One-time fee per offering due 10 days before the first sale in NC
Exemption notice for Rule 505 transaction $150.00 One-time fee per offering due 10 days before the first sale in NC
Amendment of mutual fund offering amount $50.00 One-time fee for each amendment to increase offering amount
Exemption filing by not-for-profit issuer No Charge No fee, but filing is due 5 days before the first sale in NC

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4. What forms do I use to apply for a registration or exemption with the Securities Division and where can I find them?


Registrations / Exemptions / Notice Filings Forms or Information Found At:
(Click the links)
Securities Dealer – Form BD
Securities Salesperson – Form U-4
Investment Adviser – Form ADV Part I & 2
To register, use the CRD and the IARD registration systems.
Investment Adviser Representative – Form U-4 Print the current uniform registration forms.
Registered public offering of securities

Securities offering – Forms U-1, U-2 and U-2A (for corporate issuer)
See N.C.G.S. §§ 78A-26, -27 & -28

North American Securities Administrators Association (NASAA)
Small Company Offering Registration (SCOR) – Forms U-7, U-1, U-2 and U-2A (for corporate issuer) See N.C.G.S. § 78A-27
See the NASAA website.
Notice filing for a mutual fund – Form NF See N.C.G.S. § 78A-31(a)

See the NASAA website.
Rule 506 transaction notice filing – Form D

State filing requirements for Issuers Relying on the Securities Act of 1933, Regulation D, Rule 506 beginning March 16, 2009
See requirements at 18 NCAC 06A.1211

See the Securities and Exchange Commission (SEC) website.

See NC Securities Division’s Informational Bulletin.
Limited offering subject to Rule .1205(b) See requirements and schedule at 18 NCAC 06A.1205(b)

Form U-2 (and Form U-2A, for corporate issuer) -- NASAA website
Rule 505 transaction – Form D, plus schedule required by Rule .1208(c), plus Form U-2 (and Form U-2A, for corporate issuer) See requirements and schedule at 18 NCAC 06A.1208

Form D – SEC website

Form U-2 (and Form U-2A, for corporate issuer) – NASAA website
Exempt not-for-profit offering -- Schedule required by Rule.1209(d), plus Form U-2 (and Form U-2A, for corporate issuer) See schedule at 18 NCAC 06A.1209(d)

Form U-2 (and Form U-2A, for corporate issuer) – NASAA website

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5. Whom do I pay?


To pay a securities registration fee or an exemption filing fee, please make your check payable to “The NC Department of the Secretary of State” and mail it to:

NC Department of the Secretary of State
Securities Division
PO Box 29622
Raleigh, NC 27626-0622

For all other payments, please follow the instructions on the CRD and IARD websites.

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6. May a securities salesman register with more than one broker-dealer firm at a time?


No. A securities salesman may register with only one firm at a time.

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7. May an investment adviser representative register with more than one firm at a time?


It depends. A representative may register with more than one firm if the firms are under common ownership or control, or the representative is acting as a "solicitor" for more than one firm. A "solicitor" refers clients to the firm for a fee.


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8. I am an insurance agent residing outside North Carolina who wishes to sell variable annuities in North Carolina. What do I need to do?


Ask the compliance officer of the broker-dealer firm with which you are employed to file a Form U-4 on your behalf. Once your securities registration has been approved, contact the NC Department of Insurance at (919) 807-6750 and give them your CRD number and the effective date of your North Carolina securities registration. You must successfully pass the Series 63 exam to be a securities salesman.


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9. Where can I find the state laws governing stockbrokers and investment advisers?


Click the link for the NC Securities Act.

Click the link for the NC Investment Advisers Act.

Click the link for the rules supplementing both acts.

The U.S. Securities and Exchange Commission (SEC) enforces federal securities laws and regulations.


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10. What is the Qualified Business Tax Credit Program, and how does it work?


The Division reviews applications from firms wishing to register under the Qualified Business Tax Credit Program. If a business qualifies, investors claim a credit on their North Carolina state income tax forms. The credit is generally 25% of the amount invested, with an annual cap of $50,000 per investor.

Only the investor gets the tax credit. The investor claims the credit the year after the year of the investment. You may carry unused credits for five years before they expire.

Only certain businesses can register under this program. For more information, click here.


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