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Georgia State Code
Title      10
Chapter       5  
Section Navigation        1 ... 10         11 ... 20    
    21 ... 24      
Section1 2 3 4 5 6 7 8 9 10 >>>  
Title 10, Chapter 5, Section 3 (10-5-3)

(a) Generally. No dealer, limited dealer, salesperson, or limited salesperson, as defined by this chapter, shall offer for sale or sell any securities within or from this state, except in transactions exempt under paragraph (1), (2), (6), (7), (8), (9), (11), or (12) of Code Section 10-5-9, unless he or she is a registered dealer, limited dealer, salesperson, or limited salesperson pursuant to this Code section; provided, however, that a real estate broker or salesperson licensed to sell real estate in this state shall not be required to register as a dealer or a limited dealer or as a salesperson or a limited salesperson under this chapter in connection with a sale by him or her of a security consisting of any interest in a residential unit and any rental management arrangement relating thereto. No investment adviser or investment adviser representative, as defined by this chapter, shall transact business within or from this state unless he or she is a registered investment adviser or investment adviser representative pursuant to this Code section.

(b) Applicability of subsections (a) and (g). The provisions of subsections (a) and (g) of this Code section regarding investment advisers, federal covered advisers, or investment adviser representatives shall not apply to:

(1) Any investment adviser, federal covered advisers, or investment adviser representative whose only clients are insurance companies; or

(2) Any investment adviser, federal covered advisers, or investment adviser representative who during the course of the preceding 12 months has had fewer than six clients in this state.

(c) Dealers and limited dealers. Application for registration as a dealer or limited dealer may be made by any person. Such application for registration shall be made in a manner prescribed by the commissioner, shall be verified by the applicant, shall be filed with the commissioner, and shall contain the following information:

(1) The name of the applicant;

(2) The address of the principal place of business of the applicant and the addresses of all branch offices of the applicant in this state;

(3) The form of business organization and the date of organization of the applicant;

(4) The names and business addresses of all general partners, limited partners, directors, affiliates, or executive officers of the applicant; a statement of the limitations, if any, of the liability of any general partner, limited partner, director, affiliate, or executive officer; and a statement setting forth in chronological order the occupational activities of each such general partner, limited partner, director, affiliate, or executive officer during the preceding ten years;

(5) A brief description of the general character of the business conducted or proposed to be conducted by the applicant; (6) A list of any other states in which the applicant is registered as a securities broker, dealer, or salesperson and, if registration of the applicant as a securities broker, dealer, or salesperson has ever been denied, revoked, suspended, or withdrawn or if such a proceeding is pending in any state, full details with respect thereto;

(7) Whether the applicant is registered as a broker or dealer under the Securities Exchange Act of 1934 or any act adopted in amendment thereof and whether any such registration of the applicant has ever been denied, revoked, or suspended or is then the subject of proceedings for revocation or suspension by the Securities and Exchange Commission;

(8) The names of all organizations of securities brokers or dealers of which the applicant is a member or before which any application for membership on the part of the applicant is then pending and whether any membership of the applicant in any such organization has ever been denied, revoked, or suspended or is then the subject of proceedings for revocation or suspension;

(9) The names of any securities exchanges of which the applicant or any of its partners, limited partners, directors, affiliates, or executive officers is a member and whether any such membership has ever been denied, revoked, or suspended or is then the subject of proceedings for revocation or suspension;

(10) A balance sheet as of a date within 90 days prior to the date of filing. This balance sheet need not be certified. If the balance sheet is not certified, there shall be filed in addition a certified balance sheet as of a date within one year prior to the date of filing unless the fiscal year of the applicant has ended within 90 days prior to the date of filing, in which case the balance sheet may be dated as of the end of the fiscal year preceding such last fiscal year. Such balance sheets shall be prepared in accordance with generally accepted accounting principles and, if required to be certified, shall be certified by an independent public accountant duly registered and in good standing as such under the laws of the place of his or her residence or principal office;

(11) Whether the applicant or any general partner, limited partner, director, affiliate, or executive officer of such applicant has ever been subject to any injunction or disciplinary proceeding of the Securities and Exchange Commission or any state securities commission involving a security or any aspect of the securities business, has ever been convicted of or charged with a misdemeanor of which fraud is an essential element or which involves a security or any aspect of the securities business, or has ever been convicted of or charged with a felony and, if so, all pertinent information with respect to such injunction, disciplinary proceeding, conviction, or charge.

The commissioner may waive the furnishing of any information required by this subsection (other than the requirements with respect to financial statements provided for in paragraph (10) of this subsection) and may require such additional information as to the previous history, records, or association of the applicant, its general partners, limited partners, directors, affiliates, or executive officers as he or she may deem necessary to establish whether or not the applicant should be registered as a dealer under this chapter.

No applicant shall be registered as a dealer or limited dealer under this chapter nor shall any such registration be renewed, unless each principal of such applicant has passed a written examination administered by the commissioner or someone acting under his or her direction, or unless such applicant presents proof satisfactory to the commissioner showing that each principal has previously passed a similar examination conducted by the National Association of Securities Dealers, Inc., or any other examination substantially similar to that given by the commissioner, as the commissioner may determine. The commissioner is further authorized to prescribe the time, manner, or procedure relative to the holding of such examination and may impose a fee against each principal taking said examination to cover the costs thereof. For the purposes of this subsection only, with respect to a dealer or an applicant for registration as a dealer, the term "principal" refers to a person associated with such dealer or applicant who is engaged in the management of such dealer's or applicant's business, including the supervision, solicitation, or conduct of such business or the training of persons associated with such dealer or applicant for any of these functions.

There shall be filed with such application an irrevocable written consent of the applicant to the service of process upon the commissioner in actions against such applicant in the manner and form provided in Code Section 10-5-18 and payment of the prescribed registration fee.

When an applicant has fully complied with this subsection and subsections (j) and (k) of this Code section, the commissioner shall register such applicant as a dealer unless he or she shall find that the applicant is not of good business reputation or does not appear qualified by training or experience to act as a dealer in securities. When the commissioner has registered an applicant as a dealer, he or she shall immediately notify the applicant of such registration.

The procedure and requirements relative to the registration of a dealer as provided in this subsection shall likewise apply to the registration of a limited dealer, except that an applicant for registration as a limited dealer shall furnish the commissioner, as part of his or her application, information as to the particular issue or class or type of securities with respect to which he or she desires to act as a dealer. Any license, certificate, or other evidence of registration issued by the commissioner to a limited dealer shall specify the issue or class or type of securities with respect to which such registration authorizes such limited dealer to act as a dealer.

(d) Salespersons and limited salespersons. Application for registration as a salesperson or a limited salesperson may be made by any individual. Such application for registration shall be made in a manner prescribed by the commissioner, shall be verified by the applicant and by the dealer, limited dealer, or issuer employing or proposing to employ such applicant, shall be duly verified under oath, shall be filed with the commissioner, and shall contain the following information: (1) Name and residence and business addresses of the applicant;

(2) Name of the dealer, limited dealer, or issuer employing or proposing to employ the applicant;

(3) Names and addresses of three persons of whom the commissioner may inquire as to the character and business reputation of the applicant;

(4) Applicant's age and education;

(5) The nature of employment and names and addresses of employers of the applicant for the period of ten years immediately preceding the date of application;

(6) Other state or federal laws under which the applicant has ever been registered as a securities broker, dealer, or salesperson and, if any such registration has ever been refused, canceled, suspended, or revoked or if such a proceeding is pending, full details with respect thereto; and

(7) Whether the applicant has ever been subject to any injunction or disciplinary proceeding of the Securities and Exchange Commission or any state securities commission involving a security or any aspect of the securities business, has ever been convicted of or charged with a misdemeanor of which fraud is an essential element or which involves a security or any aspect of the securities business, or has ever been convicted of or charged with a felony, and, if so, all pertinent information with respect to such injunction, disciplinary proceeding, conviction, or charge.

The commissioner may waive the furnishing of any information required by this subsection and may require such additional information as to applicant's previous business experience as he or she may deem necessary to determine whether or not the applicant should be registered as a salesperson under the provisions of this chapter. There shall be filed with such application payment of the prescribed registration fee.

When an applicant has fully complied with the provisions of this subsection and subsections (j) and (k) of this Code section, the commissioner shall register such applicant as a salesperson, unless he or she finds that such applicant is not of good business reputation or does not appear to be qualified by training, experience, or knowledge of the securities business to act as a salesperson of securities. When the commissioner has registered an applicant as a salesperson, he or she shall immediately notify the applicant of such registration.

No dealer, limited dealer, or issuer shall employ any salesperson or limited salesperson who is not registered as required by this chapter, and each such person shall promptly notify the commissioner of the termination of the employment by him or her of a salesperson or limited salesperson; and the registration of such salesperson or limited salesperson shall automatically be terminated from the time of termination of such employment. Any license, certificate, or other evidence of such registration which such salesperson or limited salesperson has been issued shall immediately be returned to the commissioner. The procedure relative to the registration of a salesperson as provided in this subsection shall likewise apply to the registration of a limited salesperson, except that an applicant for registration as a limited salesperson shall furnish the commissioner with information as to the particular issue or class or type of securities which he or she desires to sell or offer for sale. Any license, certificate, or other evidence of registration issued by the commissioner to a limited salesperson shall specify the issue or class or type of securities which such registration authorizes such limited salesperson to sell or offer for sale.

No applicant shall be registered as a salesperson or limited salesperson under this chapter nor any such registration be renewed, unless such person has passed a written examination administered by the commissioner or someone acting under his or her direction or unless such applicant presents proof satisfactory to the commissioner showing that he or she has previously passed a similar examination conducted by the National Association of Securities Dealers, Inc., or any other examination substantially similar to that given by the commissioner, as the commissioner may determine. The commissioner is further authorized to prescribe the time, manner, and procedure relative to the holding of such examination and may impose a fee against the applicant taking said examination to cover the costs thereof.

There shall be filed with such application an irrevocable written consent of the applicant to the service of process upon the commissioner in actions against the applicant in the manner and form provided in Code Section 10-5-18.

In addition to the requirements of this subsection, an application for registration by any individual who, upon registration, would be a designated salesperson shall contain a certification that the applicant has completed or has begun and will complete a four-month period of training with a dealer or designated dealer registered under this chapter before offering to sell, selling, offering to purchase, or purchasing any designated security.

(e) Investment advisers. Application for registration as an investment adviser may be made by any person. Such application for registration shall be made in a manner prescribed by the commissioner, shall be verified by the applicant, shall be filed with the commissioner, and shall contain the following information:

(1) The name and form of organization under which the investment adviser engages or intends to engage in business in this state;

(2) The name of the state or other sovereign power under which such investment adviser is organized;

(3) The location of the investment adviser's principal place of business and branch offices, if any;

(4) The names and addresses of the investment adviser's partners, officers, directors, and persons performing similar functions, or, if such an investment adviser is an individual, the name and residence and business addresses of such individual;

(5) The number of the investment adviser's employees; (6) The education, the business affiliations for the past ten years, and the present business affiliations of such investment adviser and of such investment adviser's partners, officers, directors, and persons performing similar functions and of any controlling person thereof;

(7) The nature of the business of such investment adviser, including the manner of giving advice and rendering analyses or reports;

(8) Investment advisers with custody of client funds or securities or requiring prepayment of more than $500.00 in fees per client six or more months in advance must provide a balance sheet for the most recent fiscal year. Said balance sheet shall be prepared in accordance with generally accepted accounting principles and shall, as the commissioner may by rule specify, be audited by an independent public accountant;

(9) The nature and scope of the authority of such investment adviser with respect to clients' funds and accounts;

(10) The basis or bases upon which such investment adviser is compensated;

(11) Whether such investment adviser, any investment adviser representative, or any person associated with such investment adviser is subject to any disqualification which would be a basis for denial, suspension, or revocation of registration of such investment adviser under the provisions of subsection (h) of this Code section or under the provisions of Code Section 10-5-4 of this chapter; and

(12) A statement as to whether the principal business of such investment adviser consists or is to consist of acting as investment adviser, and a statement as to whether a substantial part of the business of such investment adviser consists or is to consist of rendering investment supervisory services.

The commissioner may waive the furnishing of any information required by this subsection and may require such additional information as to the previous history, records, or association of the applicant, its general partners, limited partners, directors, affiliates, or executive officers as he or she may deem necessary to establish whether or not the applicant should be registered as an investment adviser under this chapter. The commissioner may further, if he or she finds it to be in the best interests of the public, by rule or regulation create procedures and exemptions relating to investment advisers which procedures and exemptions would have as their objectives compatibility with federal exemptions and uniformity among the states.

No applicant shall be registered as an investment adviser under this chapter nor shall any such registration be renewed unless the applicant, if an individual, and each investment adviser representative of such applicant has passed a written examination approved by the commissioner.

There shall be filed with such application an irrevocable written consent of the applicant to the service of process upon the commissioner in actions against such applicant in the manner and form provided in Code Section 10-5-18 and payment of the prescribed registration fee.

When an applicant has fully complied with this subsection and subsection (j) of this Code section, the commissioner shall register such applicant as an investment adviser unless he or she shall find that the applicant is not of good business reputation or does not appear qualified by training or experience to act as an investment adviser. When the commissioner has registered an applicant as an investment adviser, he or she shall immediately notify the applicant of such registration.

(f) Investment adviser representatives. Application for registration as an investment adviser representative may be made by any individual. Such application for registration shall be made in a manner prescribed by the commissioner, shall be verified by the applicant and by the investment adviser or federal covered adviser employing or proposing to employ such applicant, shall be filed with the commissioner, and shall contain the following information:

(1) Name and residence and business addresses of the applicant;

(2) Name of the investment adviser or federal covered adviser employing or proposing to employ the applicant;

(3) Applicant's age and education;

(4) The nature of employment and names and addresses of employers of the applicant for the period of ten years immediately preceding the date of application;

(5) Other state or federal laws under which the applicant has ever made a notice filing or been registered as an investment adviser or investment adviser representative and, if any such registration or notice filing has ever been refused, canceled, suspended, or revoked or, if such a proceeding is pending, full details with respect thereto; and

(6) Whether the applicant has ever been subject to any injunction or disciplinary proceeding of the Securities and Exchange Commission or any state securities commission involving a security or any aspect of the securities or investment advisory business, has ever been convicted of or charged with a misdemeanor of which fraud is an essential element or which involves a security or any aspect of the securities business, or has ever been convicted of or charged with a felony and, if so, all pertinent information with respect to such injunction, disciplinary proceeding, conviction, or charge.

The commissioner may waive the furnishing of any information required by this subsection and may require such additional information as to the applicant's previous business experience as he or she may deem necessary to determine whether or not the applicant should be registered as an investment adviser representative under the provisions of this chapter. There shall be filed with such application payment of the prescribed registration fee. The commissioner may further, if he or she finds it to be in the best interests of the public, by rule or regulation create procedures and exemptions relating to investment adviser representatives which procedures and exemptions would have as their objectives compatibility with federal exemptions and uniformity among the states.

When an applicant has fully complied with the provisions of this subsection and subsection (j) of this Code section, the commissioner shall register such applicant as an investment adviser representative, unless he or she finds that such applicant is not of good business reputation or does not appear to be qualified by training, experience, or knowledge of the securities business to act as an investment adviser representative. When the commissioner has registered an applicant as an investment adviser representative, the applicant shall be immediately notified of such registration.

No investment adviser shall employ any investment adviser representative who is not registered as required by this chapter, and each such person shall promptly notify the commissioner of the termination of the employment by him or her of an investment adviser representative; and the registration of such investment adviser representative shall automatically be terminated from the time of termination of such employment. No investment adviser representative shall conduct business on behalf of a federal covered adviser unless such representative is registered as required by this chapter. An investment adviser representative of a federal covered adviser shall promptly notify the commissioner of the termination of his or her employment with the adviser and such representative's registration shall automatically terminate as of the date the employment terminated.

No applicant shall be registered as an investment adviser representative under this chapter nor any such registration be renewed, unless such person has passed a written examination approved by the commissioner.

There shall be filed with such application an irrevocable written consent of the applicant to the service of process upon the commissioner in actions against the applicant in the manner and form provided in Code Section 10-5-18.

(g) Federal covered advisers. No federal covered adviser shall transact business within, into, or from this state unless such adviser has made a notice filing with the commissioner. Such notice filing shall consist of a copy of those documents filed by the adviser with the Securities and Exchange Commission that the commissioner, by rule or regulation, requires to be filed together with the fee required by subsection (j) of this Code section. A notice filing shall be effective upon receipt by the commissioner.

(h) Refusal of registration; finding applicant "not of good reputation." If, after affording an applicant a hearing or an opportunity for a hearing as provided in Code Section 10-5-16, the commissioner finds that there are sufficient grounds to refuse to register the applicant as provided in this Code section, he or she shall issue an order refusing to register the applicant. The order shall state specifically the grounds for its issuance. A copy of the order shall be mailed to the applicant at his or her business address and, if the application is for registration as a salesperson, limited salesperson, or investment adviser representative, to the dealer, limited dealer, issuer, or investment adviser who proposed to employ such applicant. If the commissioner shall find that an applicant has committed any act or made any omission which would constitute a sufficient ground for revocation of a dealer's, limited dealer's, salesperson's, limited salesperson's, investment adviser's, or investment adviser representative's registration under Code Section 10-5-4, such act or omission may constitute a sufficient ground for a finding by the commissioner, under subsection (c), (d), (e), or (f) of this Code section, that such applicant is not of "good business reputation."

(i) Expiration and renewal of registration or notice filing.

(1) Every registration and every notice filing under this Code section shall expire on December 31 in each year.

(2) Registration of dealers, limited dealers, salespersons, limited salespersons, investment advisers, and investment adviser representatives must be renewed each year by the submission of a renewal application containing the information required in an application for registration, to the extent that such information has not previously been included in an application or renewal application previously filed, by the payment of the proper registration fee, and, in the case of a dealer or limited dealer, by the filing of a balance sheet as of a date within 90 days prior to the date of filing. This balance sheet need not be certified. If the balance sheet is not certified, there shall be filed in addition a certified balance sheet as of a date within one year of the date of filing unless the fiscal year of the applicant has ended within 90 days prior to the date of filing, in which case the balance sheet may be dated as of the end of the preceding fiscal year. Such balance sheets shall be prepared in accordance with generally accepted accounting principles and, if required to be certified, shall be certified by an independent public accountant duly registered and in good standing as such under the laws of the place of his or her residence or principal office. The commissioner may provide by rule or regulation that a dealer or limited dealer which is registered under the Securities Exchange Act of 1934 may file with such dealer's renewal application a copy of such dealer's financial statements prepared pursuant to the Securities Exchange Act of 1934 in lieu of a balance sheet.

(3) Investment advisers with custody of client funds or securities or requiring prepayment of more than $500.00 in fees per client six or more months in advance must provide a balance sheet for the most recent fiscal year. Said balance sheet shall be prepared in accordance with generally accepted accounting principles and shall, as the commissioner may by rule specify, be audited by an independent public accountant.

(4) Upon any change in the general partners, limited partners, directors, affiliates, or executive officers of a dealer, limited dealer, or investment adviser, such dealer, limited dealer, or investment adviser shall promptly notify the commissioner and shall furnish to him or her in writing such information concerning such persons which has not previously been filed as required in an original application for registration. Upon any change in the general partners, limited partners, directors, affiliates, or executive officers of a federal covered adviser, such adviser shall provide the commissioner with a copy of any information concerning such change at the same time such information is filed with the Securities and Exchange Commission.

(j) Fees. The fee for the initial registration of a dealer, limited dealer, or investment adviser, or the initial notice filing by a federal covered adviser, shall be $250.00. The annual renewal fee for a dealer, limited dealer, investment adviser, or federal covered adviser shall be $100.00. The initial registration fee and transfer fee for each salesperson, limited salesperson, and investment adviser representative shall be $50.00. The annual renewal fee for each salesperson, limited salesperson, and investment adviser representative shall be $40.00.

(k) Bonds.

(1) Except as otherwise provided in this subsection, no applicant shall be registered as a dealer, limited dealer, salesperson, or limited salesperson under this chapter nor shall any such registration be renewed until the applicant files with the commissioner bond satisfactory to the commissioner in the sum of $25,000.00 as to dealers and limited dealers and $2,500.00 as to salespersons and limited salespersons, payable to the State of Georgia for the use of all interested persons and conditioned upon the faithful compliance by the principal with any and all provisions of this chapter and any regulations and orders issued by the commissioner. Any such bond may be canceled by the principal or surety by giving notice to the commissioner, but such cancellation shall not affect any cause of action accruing thereon prior to cancellation and such cancellation shall result in automatic cancellation of the principal's registration until new bond satisfactory to the commissioner is filed. Any action on such bond must be brought within two years after accrual of the cause of action. The amounts above-prescribed for the bonds required of salespersons, limited salespersons, dealers, and limited dealers shall be construed as being the aggregate liability recoverable against such bonds, regardless of the number of claimants, and shall not be construed as individual liability.

(2)(A) The requirement for filing of such bond by an applicant for registration or renewal of registration as a dealer or limited dealer shall not be applicable if:

(i) Such applicant is registered under the Securities Exchange Act of 1934; or

(ii) As of the dates of the most recent balance sheet certified by an independent public accountant filed by such applicant pursuant to this Code section and any subsequent noncertified balance sheet so filed, such applicant had a minimum capital of not less than $250,000.00. For the purposes of this division, minimum capital shall mean net worth as determined in accordance with generally accepted accounting principles, unless for the purposes of this division the commissioner shall adopt rules and regulations for determining the minimum capital of a dealer or limited dealer, in which case minimum capital shall be determined in accordance with such rules and regulations. The aforesaid balance sheets filed by such applicant shall be used to determine the applicant's minimum capital unless the commissioner shall have adopted the rules or regulations authorized in the preceding sentence, in which case the applicant's minimum capital shall be determined from schedules prepared in accordance with such rules and regulations. The schedule prepared as of the date of the certified balance sheet referred to above shall be certified as having been prepared in accordance with the rules or regulations adopted by the commissioner, as provided in this division, by an independent public accountant duly registered and in good standing as such under the laws of the place of his or her residence.

(B) The requirement for the filing of such bond by an applicant for registration or renewal of registration as a salesperson or limited salesperson shall not be applicable if the dealer or limited dealer by whom such applicant is employed or is to be employed is not subject to the bond requirements of this Code section.

(3) The requirement for filing such bond by an applicant for registration or renewal of registration as a dealer or limited dealer shall not be applicable if such applicant has deposited in trust with the commissioner:

(A) A certificate of deposit evidencing a deposit with a financial institution satisfactory to the commissioner in the amount of $25,000.00 payable to the applicant and assigned to the commissioner;

(B) An irrevocable letter of credit addressed to the commissioner in the amount of $25,000.00, issued by a bank which is a member of the Federal Reserve System and conditioned only upon the rendering of a judgment by a court of competent jurisdiction in which the applicant is found liable for damages under this chapter; or

(C) Obligations of the United States, an agency thereof, or of the State of Georgia which mature in not more than two years and which have a market value as of the date of deposit of at least $25,000.00.

Such deposits shall be held for the benefit of all persons to whom applicant is liable for damages under this chapter for a period of two years after such applicant's registration has expired or been revoked; provided, however, such deposits shall not be released at any time while there is pending against applicant an action (including any direct appeal of such action or an appeal based on a petition for certiorari jurisdiction), of which the commissioner has notice, in a court of competent jurisdiction in which it is alleged that applicant is liable for damages under this chapter. Such deposits shall not be released except upon application to and the written order of the commissioner. The commissioner shall have no liability for any such release of any deposit or part thereof so made by him or her in good faith. The commissioner may designate any regularly constituted state depository having trust powers domiciled in this state as a depository to receive and hold any such deposit. Any such deposit so held shall be at the expense of the applicant. Such depository shall give to the commissioner proper trust and safekeeping receipt upon which the commissioner shall give official receipt to the applicant. The State of Georgia shall be responsible for the safekeeping and return of all deposits made pursuant to this Code section. So long as the applicant complies with this chapter, the applicant may demand, receive, sue for, and recover the income from the securities deposited or may exchange and substitute for the letter of credit or securities deposited or a part thereof, with the approval of the commissioner, a letter of credit or securities of the kinds specified above of equivalent or greater value. No judgment creditor or other claimant of applicant shall levy upon any deposit held pursuant to this paragraph or upon any part thereof, except as specified in this paragraph. Whenever any person shall file an action in a court of competent jurisdiction in which it is alleged that the applicant is liable for damages under this chapter, such person, in order to secure his or her recovery, may give notice to the commissioner of such alleged liability and of the amount of damages claimed, after which notice the commissioner shall be bound to retain, subject to the order of the Superior Court of Fulton County, as provided below, a sufficient amount of the deposit to pay the judgment in the action.

In the event that the applicant prevails in such action and in the event that such deposits have been held by the commissioner for a period of at least two years after the applicant's registration has expired or been revoked, then such deposits shall be released to the applicant; provided, however, such deposits shall not be released at any time while there is pending against applicant an action (including any direct appeal of such action or an appeal based on a petition for certiorari jurisdiction), of which the commissioner has notice, in a court of competent jurisdiction in which it is alleged that the applicant is liable for damages under this chapter. In the event that a judgment is rendered in such action by which it is determined that the applicant is liable for damages under this chapter, and the applicant has not paid the judgment within ten days of the date the judgment became final, or in the event the applicant petitions for the Supreme Court of the United States to take certiorari jurisdiction over such action, and the applicant has not paid the judgment within ten days of the date the Supreme Court of the United States denies certiorari jurisdiction or within ten days of the date the Supreme Court of the United States affirms the judgment, then said person may petition the Superior Court of Fulton County for an order directing the commissioner to reduce such deposit or a portion thereof sufficient to pay the judgment, to cash or its equivalent and to pay such judgment to the extent the judgment may be satisfied with the proceeds of the deposit. If there shall remain any residue from the deposit and if at least two years have passed since the expiration or revocation of the applicant's registration, the commissioner shall pay over such residue to the applicant, taking his or her receipt for the residue, which shall be filed and recorded with the other papers of the case, unless there is pending against applicant an action (including any direct appeal of such action or an appeal based on a petition for certiorari jurisdiction), of which the commissioner has notice, in a court of competent jurisdiction in which it is alleged that applicant is liable for damages under this chapter, in which case the commissioner shall hold or dispose of such residue in accordance with the provisions of this paragraph relating to the holding or disposing of the entire deposit. In the event that more than one final judgment is rendered against the applicant for violation of this chapter, the judgment creditors shall be paid in full from such deposit or residue thereof, to the extent the deposit or residue is sufficient to pay the judgment, in the order in which the judgment creditors petitioned the Superior Court of Fulton County.

(4) Anything in this subsection to the contrary notwithstanding, the commissioner shall comply with any order of a Georgia or United States court of competent jurisdiction to turn over any deposit held by him or her pursuant to paragraph (3) of this subsection or the proceeds from any bond held by him or her pursuant to paragraph (1) of this subsection to a trustee or receiver for the use and sole benefit of persons on whose behalf the commissioner holds such deposit or proceeds.

(l) Records.

(1) Every dealer, limited dealer, salesperson, or limited salesperson registered under this chapter shall make and keep such accounts and other records with respect to sales of securities in this state, whether or not pursuant to exemptions contained in Code Section 10-5-8 or 10-5-9, as the commissioner may by rule or regulation require. Every investment adviser or investment adviser representative registered under this chapter shall make and keep such accounts and records with respect to its business activities in this state as the commissioner by rule or regulation may require. All records so required shall be preserved for five years unless the commissioner shall provide otherwise. All records of such dealers, limited dealers, salespersons, limited salespersons, investment advisers, or investment adviser representatives are subject to such reasonable periodic, special, or other examinations by representatives of the commissioner, within or outside this state, as the commissioner deems necessary or appropriate in the public interest or for the protection of the public.

(2) The requirements of this subsection shall not apply to:

(A) A dealer or limited dealer that is registered under the Securities Exchange Act of 1934; or

(B) An investment adviser that maintains its principal place of business in a state other than this state, provided that such adviser is registered in the state where it maintains its principal place of business and is in compliance with such state's record-keeping requirements, if any.

(m) Amendment of dealers', limited dealers', or investment advisers' registrations.

(1) The registration of a dealer, limited dealer, or investment adviser shall be amended to reflect a change of name, home and business address, branch offices, principals, state of incorporation, corporate forms (including a merger of two registered dealers or investment advisers), or any other change which does not materially affect the business of the dealer, limited dealer, or investment adviser. Applications by dealers, limited dealers, and investment advisers to amend their registrations shall be made in a manner which the commissioner may, by rule or regulation, prescribe, and the commissioner may charge: (A) A fee for such amendments, which fee shall not exceed the fee provided for renewal of such registrations; and

(B) A fee of $1.00 for each salesperson's or limited salesperson's license which must be altered because of the amendment.

(2) Whenever a federal covered adviser files with the Securities and Exchange Commission an amendment to its federal registration, such adviser shall file at the same time a copy of such amendment with the commissioner.

(n) Successors to dealers, limited dealers, or investment advisers. In the event that a dealer, limited dealer, or investment adviser succeeds to and continues the business of another registered dealer, limited dealer, or investment adviser, the registration of the predecessor shall be deemed to remain effective as the registration of the successor for a period of 75 days after such succession, provided that an application for registration is filed within 30 days after succession on a form prescribed by the commissioner. In the event an investment adviser or federal covered adviser is a successor to and continues the business of a federal covered adviser, the notice filing of the predecessor adviser shall be deemed effective for 30 days after such succession.

(o) Dissemination of information. With respect to investment advisers, the commissioner may require that certain information be furnished or disseminated as necessary or appropriate in the public interest or for the protection of investors and advisory clients. To the extent determined by the commissioner in his or her discretion, information furnished to clients or prospective clients of an investment adviser which information would be in compliance with the disclosure requirements of a federal covered adviser pursuant to the Investment Advisers Act of 1940 and the rules thereunder may be used in whole or partial satisfaction of this requirement. With respect to dealers, limited dealers, salespersons, and limited salespersons, the commissioner shall make available to any person so requesting information concerning whether a dealer, limited dealer, salesperson, or limited salesperson is or indicates that he or she is a designated dealer or designated salesperson, as well as information possessed by the commissioner concerning any public administrative, civil, or criminal proceedings against and sanctions imposed on any designated dealer or its employees, affiliates, or salespersons.

(p) Within 30 days after any dealer, limited dealer, salesperson, or limited salesperson becomes a designated dealer or designated salesperson, said dealer, limited dealer, salesperson, or limited salesperson shall inform the commissioner of such in writing and shall submit the certification required by subsection (d) of this Code section, and any other information or material requested by the commissioner.

(q)(1) In connection with the public sale or purchase of securities, every dealer and limited dealer subject to this chapter shall send written confirmations of transactions which are fully descriptive of the transaction in compliance and accordance with such rules and regulations as the commissioner may promulgate. (2) With respect to transactions in designated securities made or caused to be made by designated dealers, in addition to the information required to be contained on confirmations under paragraph (1) of this subsection, each written confirmation required to be sent under paragraph (1) of this subsection shall be accompanied by the following information, which shall be clearly explained and identified:

(A) The price at which the dealer is currently selling or offering to sell the security and the price at which the dealer is currently buying or offering to buy the security; and

(B) All commissions, fees, bonuses, or other compensation payable to the dealer and salesperson as a result of the transaction.

Defined terms referenced in this section:
Saturday May 23 19:27 EDT


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