STATE OF WISCONSIN DEPARTMENT OF FINANCIAL INSTITUTIONS DIVISION OF SECURITIES Mail Completed Application to: 345 W. Washington Ave. 4th Floor (53703) P.O. Box 1768 Madison, WI 53701-1768 (608) 266-3693 TTY: (608) 266-8818 Internet: www.wdfi.org WISCONSIN BROKER-DEALER LICENSING PROCEDURE The following information is provided to assist you in preparing an application for a Wisconsin securities broker-dealer license. Until this application is approved, neither the firm nor its agents are licensed in Wisconsin. Therefore, they cannot solicit accounts, open accounts, receive any Wisconsin accounts from other brokerage firms or transact any other securities business with any Wisconsin residents. AGENTS MUST BE LICENSED IN WISCONSIN Each person who wishes to represent your firm by effecting or attempting to effect securities transactions in this state must be licensed as a securities agent for a Wisconsin licensed broker-dealer. To become licensed, each prospective licensee must file an application (see instructions below) and successfully complete the Uniform Securities Agent State Law Examination (Series 63) or the Uniform Combined State Law Examination (Series 66) and the examination administered by FINRA which is applicable to the business the applicant intends to transact in Wisconsin. Study materials for each exam and an explanation of the examination process can be obtained by writing to FINRA, Book Order Department, 9513 Key West Avenue, Rockville, MD 20850 or by visiting the FINRA website at http://www.finra.org and following the Registration & Qualification tab or calling (301) 590-6500. AGENT APPLICATIONS MUST BE SUBMITTED TO CRD All individuals who will act as agents of a firm that is or will be registered with FINRA must submit a Form U-4 and the license application fee set forth below to the Central Registration Depository (“CRD”). NET CAPITAL REQUIREMENT Pursuant to s. DFI-Sec 4.02(1), Wis. Adm. Code, every broker-dealer must maintain net capital as prescribed by its activities under rule 15c3-1 of the Securities Exchange Act of 1934. Financial reports are not required to be filed with the application. However, if the firm is deficient in its net capital or is subject to special net capital conditions by FINRA or the SEC, the firm must advise this Division at the time of application. CLEARING BROKERS If the applicant will use the services of a clearing broker for trading and/or customer account maintenance, the clearing broker must also be licensed as a broker-dealer in Wisconsin. BROKER-DEALERS PROVIDING INVESTMENT ADVISORY SERVICES In Wisconsin, a broker-dealer may provide investment advisory services under its broker-dealer license without applying for a separate license. Broker-dealers who wish to provide advisory services in Wisconsin must make an initial registration or notice filing via the Investment Adviser Registration Depository (“IARD”). The broker-dealer will not be charged additional fees for this filing. Firms acting as federal advisers need only file via IARD and are not required to file any other information with the DFI/DOS/BDP 10/07 1 American LegalNet, Inc. www.FormsWorkFlow.com Division. Firms that act as state advisers must forward a copy of their Form ADV Part 2 or other disclosure document, a copy of their advisory contract and their fee schedule directly to the Division. If the firm is providing advisory services in some jurisdictions but will not provide that service in Wisconsin, provide a statement to that effect. The firm can apply later to add advisory services to its application if desired. Agents of the broker-dealer who will provide the advisory services must have passed the Series 65 exam (post January 1, 2000), the combination of the Series 7 and 66 exams (post January 1, 2000), or the combination of the Series 7 and 63 exams. Examination waivers for investment adviser representatives listed in section DFI-Sec 5.01(4), Wis. Adm. Code also apply to agents who will provide advisory services. At this time, no additional U4 filings are required for licensed agents who will act as investment adviser representatives. Do not submit an application for an RA license on CRD if the person is already licensed as an AG on CRD for the firm. SUMMARY OF WISCONSIN REQUIREMENTS TO LICENSE A SECURITIES BROKER-DEALER 1. Initial applications for broker-dealer licensing in Wisconsin are accomplished with a two-stage filing. The following forms and fees must be filed directly with the CRD: a. b. 2. Form BD (including $400 filing fee) Form U-4 and $80 for each agent to be licensed in Wisconsin. In addition, the following documents must be filed directly with this Division (no application will be considered complete without these additional documents): a. A completed WISCONSIN SECURITIES ACTIVITY QUESTIONNAIRE. A blank form is enclosed. b. Financials – Most applications DO NOT require financial information. If the broker-dealer is not delinquent in the filing of its annual financial statements with the U.S. Securities and Exchange Commission under Rule 17a-5 of the Securities Exchange Act of 1934, it is not necessary to file a financial statement with the Division. However, information on any deficiencies or special conditions must be reported to the Division in writing. c. A LIST OF BRANCH OFFICES the applicant intends to have IN WISCONSIN. The Division has adopted the FINRA branch office definition. The list must include all offices in Wisconsin for which the firm will file an electronic Form BR via the CRD. Identify any branch that will be located on the premises of a financial institution and identify the institution. d. Information as to whether ONLINE TRADING will be available from the broker-dealer. If the firm has a WEBSITE, provide the URL address or samples of the front page and any pages relating to account opening, terms and conditions, agreements and disclosures. DFI/DOS/BDP 10/07 2 American LegalNet, Inc. www.FormsWorkFlow.com FEES Fees incident to filing broker-dealer and agent applications include the following: $400 FILING ($200) and EXAMINATION FEES ($200) – For review of the application by this Division prescribed by sec. 551.52(2), Wis. Stats. and s. DFI-Sec 7.01, Wis. Adm. Code, for a BROKER-DEALER APPLICATION. These fees are to be submitted directly to the CRD. $80 SECURITIES AGENT APPLICATION FILING FEE ($80) must be remitted for each securities agent application filed. These fees are to be submitted directly to the CRD. $80 BRANCH OFFICE FILING FEE ($80) prescribed by sec. 551.52(2), Wis. Stats., for each branch office located in Wisconsin. These fees are to be submitted directly to the CRD. REVIEW BY STAFF After an application is received by the Division it will be reviewed and you will be notified in writing of any deficiencies within 30 days. However, most deficiency letters are sent within 10 days. The date of filing is based upon the date the application is transferred from “No Status” to “Pending” on the records of the CRD. Depending upon the information filed in the application and at the discretion of the staff, additional information may be requested. The filing of any information with the CRD does not preclude a request that a hard copy be filed with the Division. Wisconsin statutes require that a firm be advised of any deficiencies in its application within 30 days of filing. The applicant has 180 days from the initial filing date of its application to address all deficiencies and complete the application. AMENDMENTS to Form BD, changes of address or principal office, changes to Schedules A through D or other related topics will be accepted as filed with the CRD. These amendments are not required to be filed directly with the Division. All reports required by s. DFI-Sec 4.04, Wis. Adm. Code with the exception of the branch office report in s. DFI-Sec 4.04(8) and copies of all civil suits must still be filed with the Division regardless of their inclusion with a Form BD amendment. LAW AND RULES AVAILABLE Copies of the Wisconsin Uniform Securities Law and Rules of the Division are available online at the DFI website at: http://www.wdfi.org/fi/securities/statutes.htm. ************************************************************************************ If you have questions about requirements for registering as a foreign corporation in Wisconsin, contact the DFI Division of Corporate & Consumer Services, 345 W. Washington Ave., 3rd Floor, Madison, Wisconsin 53703, (608) 261-9555. If you have any additional questions concerning Wisconsin broker-dealer license application requirements, you may call (608) 266-2139 for assistance. Additional copies of this packet and forms are available online at: http://www.wdfi.org/_resources/indexed/site/fi/securities/licensing/f_bdpacket.pdf DFI/DOS/BDP 10/07 3 American LegalNet, Inc. www.FormsWorkFlow.com