Except as provided in subsection (d) of this section, a person may not transact business in this State as a broker–dealer or agent unless the person is registered under this subtitle. A person may not transact business in this State as an investment adviser or as an investment adviser representative unless: The person is registered as an investment adviser or an investment adviser representative under this subtitle; The person’s only clients in this State are investment companies as defined in the Investment Company Act of 1940, or insurance companies; or The person has no place of business in this State, and: The person’s only clients in this State are investment companies as defined in the Investment Company Act of 1940, other investment advisers, federal covered advisers, broker–dealers, banks, trust companies, savings and loan associations, insurance companies, employee benefit plans with assets of not less than $1,000,000, and governmental agencies or instrumentalities, whether acting for themselves or as trustees or fiduciaries with investment control, or other institutional investors as are designated by rule or order of the Commissioner; or During the preceding 12–month period, the person has had no more than five clients who: Are residents of the State; and Are not the types of clients described in item (i) of this paragraph. A federal covered adviser may not conduct advisory business in this State unless the federal covered adviser conducts the advisory business in accordance with § 11-405(b) of this subtitle or subsection (b)(2) or (3) of this section. A person that transacts business in this State as a federal exempt broker–dealer is not required to register under subsection (a) of this section. By rule or order, the Commissioner may modify the requirements of this section or exempt any broker–dealer, investment adviser, or federal covered adviser from the requirements of this section if the Commissioner determines that: Compliance with this section is not necessary or appropriate for the protection of investors; and The exemption is consistent with the public interest and within the purposes fairly intended by the policy and provisions of this title.

Except as provided in paragraph (3) of this subsection, a broker–dealer or issuer may not employ or associate with an agent unless the agent is registered. Except as provided in paragraph (3) of this subsection, when an agent terminates a connection with a broker–dealer or issuer or terminates those activities which make the individual an agent, the agent and the broker–dealer or issuer shall promptly notify the Commissioner. This subsection does not apply to a federal exempt broker–dealer. An investment adviser required to be registered may not employ or associate with an investment adviser representative unless the representative is registered under this subtitle. An investment adviser representative who has a place of business located in this State may not transact business on behalf of a federal covered adviser, unless the investment adviser representative is registered or exempt from registration under this subtitle. The registration of a representative is not effective during any period when the representative is not employed by or associated with: A registered investment adviser; or A federal covered adviser that has filed a notice under § 11-405(b) of this subtitle. When an investment adviser representative begins or terminates a connection with a registered investment adviser or terminates those activities that make the representative an investment adviser representative, the investment adviser shall promptly notify the Commissioner. When an investment adviser representative begins or terminates a connection with a federal covered adviser or terminates those activities that make the representative an investment adviser representative, the investment adviser representative shall promptly notify the Commissioner. It is unlawful for a broker–dealer or issuer engaged in offering, offering to purchase, purchasing, or selling securities in this State or an investment adviser offering or providing investment advice in this State, directly or indirectly, to employ or associate with an individual who is participating in the securities transaction or investment advice in this State if: The registration of the individual is suspended or revoked; or The individual is barred from employment or association with a broker–dealer, an issuer, an investment adviser, or a federal covered adviser by an order of the Commissioner under this title, the Securities and Exchange Commission, or a self–regulatory organization. A broker–dealer, an investment adviser, or an issuer may not be considered to have violated this subsection if the broker–dealer, investment adviser, or issuer did not know, and in the exercise of reasonable care could not have known, of the suspension, revocation, or bar. On request from a broker–dealer, an investment adviser, or an issuer and for good cause, the Commissioner, by order under subsection (d) of this section, may modify or waive, in whole or in part, the prohibitions of this subsection. By rule or order, the Commissioner may modify the requirements of this section or exempt any broker–dealer, agent, investment adviser, federal covered adviser, or investment adviser representative from the requirements of this section if the Commissioner determines that: Compliance with this section is not necessary or appropriate for the protection of investors; and The exemption is consistent with the public interest and within the purposes fairly intended by the policy and provisions of this title.

Unless sooner terminated under other provisions of this title, the registration of each broker-dealer, agent, investment adviser, and investment adviser representative and the notice filing of each federal covered adviser expires December 31, unless renewed.

The registration of an agent expires when the agent terminates a connection with a registered broker-dealer or with an issuer. The registration of an investment adviser representative expires when the representative terminates a connection with: An investment adviser registered under this subtitle; or A federal covered adviser subject to notice filing under § 11-405(b) of this subtitle. When a person who is currently registered as an agent under this subtitle begins a connection with another broker-dealer or issuer, the person shall file an application for initial registration as provided in § 11-405 of this subtitle and shall pay the fee required by § 11-407 of this subtitle. When a person who is currently registered as an investment adviser representative under this subtitle begins a connection with another investment adviser or federal covered adviser, the person shall file an application for initial registration as provided in § 11-405 of this subtitle and pay the fee required by § 11-407 of this subtitle. Unless the Commissioner takes action under §§ 11-412 through 11-414 of this subtitle to deny or suspend the registration, the agent or investment adviser representative registration shall become effective 30 days after receipt of the application by the Commissioner and shall continue in effect until it expires under the provisions of § 11-403 of this subtitle or under the provisions of this section, whichever would occur earlier. The Commissioner may waive the 30-day period or any portion of it at the Commissioner’s discretion.

A broker-dealer, agent, investment adviser, or investment adviser representative may obtain an initial registration by filing with the Commissioner, or any entity the Commissioner designates by rule or order, an application together with a consent to service of process under § 11-802(a) of this title. The application shall contain whatever information the Commissioner by rule or order requires. This subsection does not apply to a federal covered adviser who conducts advisory business in accordance with § 11-401(b)(2) or (3) of this subtitle. Before acting as a federal covered adviser in this State, a person shall pay the fee required by § 11-407 of this subtitle and shall file the following documents as the Commissioner may require by rule or order: The documents that the person filed with the Securities and Exchange Commission; and A consent to service of process under § 11-802(a) of this title. For purposes of this subsection, “private fund adviser” means an investment adviser that provides advice solely to one or more qualifying private funds, as defined in Securities and Exchange Commission Rule 203(m)–1 (17 C.F.R. 275.203(m)–1). Before acting as a private fund adviser, a person who is not a federal covered adviser shall pay the fee required under § 11–407 of this subtitle and shall file the following documents as the Commissioner may require by rule or order: The documents that the person filed with the Securities and Exchange Commission; and A consent to service of process under § 11–802(a) of this title. Notwithstanding the provisions of subsection (a) of this section, a registered broker–dealer who is also a registered investment adviser in this State may effect the initial registration of any or all of its registered agents in this State as investment adviser representatives by the filing of: A notice with the Commissioner designating the registered agents as representatives of the investment adviser; A consent to service of process under § 11–802(a) of this title; and Such other information as the Commissioner by rule or order may require. Notwithstanding the provisions of subsection (a) of this section, a registered broker–dealer who is also a federal covered adviser that has filed a notice under subsection (b) of this section may effect the initial registration of its registered agents with a place of business in this State as investment adviser representatives by the filing of: A notice with the Commissioner designating the registered agents as representatives of the federal covered adviser; A consent to service of process under § 11–802(a) of this title; and Such other information as the Commissioner by rule or order may require. The Commissioner in the Commissioner’s discretion may publish an announcement of the applicants for registration in the media the Commissioner determines. If a denial order is not in effect and a proceeding is not pending under §§ 11–412 through 11–414 of this subtitle, registration becomes effective at noon of the 30th day after an application is filed. The Commissioner by rule or order may specify an earlier effective date, and the Commissioner by order may defer the effective date until noon of the 30th day after the filing of any amendment.

A broker-dealer or investment adviser may obtain a renewal registration by filing with the Commissioner or any entity the Commissioner designates by rule or order an application containing whatever information the Commissioner by rule requires to keep current the information contained in the application for initial registration. A broker-dealer or issuer may obtain a renewal registration for the agents associated with it by filing with the Commissioner or any entity the Commissioner designates by rule or order an application containing the names of the agents associated with it and a certification that, to the best knowledge, information, and belief of the broker-dealer or issuer: There has been no change in the information contained in the agents’ applications for the registration then currently in effect; or If there has been any such change, specifying the change. A federal covered adviser who has filed a notice under § 11-405(b) of this subtitle or an investment adviser may obtain a renewal registration for the investment adviser representatives associated with it by filing with the Commissioner or any entity the Commissioner designates by rule or order an application containing the names of the representatives associated with it and a certification that, to the best knowledge, information, and belief of the federal covered adviser or the investment adviser: There has been no change in the information contained in the investment adviser representatives’ applications for the registration currently in effect; or If there has been any such change, specifying the change. An application for renewal registration is effective on receipt by the Commissioner of the proper application and fee or on the expiration of the previous registration, whichever date is later.

An applicant for initial or renewal registration as a broker–dealer shall pay a fee of $250. An applicant for initial or renewal registration or transfer of registration as an agent shall pay a fee of $65. From the fee paid under this paragraph, $25 shall be distributed to the Securities Act Registration Fund established under § 11–208 of this title. An applicant for initial or renewal registration as an investment adviser shall pay a fee of $300. A federal covered adviser filing notice under § 11–405(b) of this subtitle shall pay an initial fee of $300 and a renewal fee of $300. A private fund adviser filing notice under § 11–405(c) of this subtitle shall pay an initial fee of $300 and a renewal fee of $300. An applicant for initial or renewal registration or transfer of registration as an investment adviser representative shall pay a fee of $50. The Commissioner by rule may waive or reduce for any class of applicant the application of the fee requirements set forth in subsection (b) of this section. If an application is denied or an application or notice filing is withdrawn, the Commissioner shall retain the fee.

A registered broker-dealer or investment adviser may file an application for registration of a successor, whether or not the successor is then in existence, for the unexpired portion of the year. There is no fee. The registration of a predecessor remains effective as the registration of a successor for 60 days after the succession, if: A broker-dealer or investment adviser succeeds to and continues the business of a registered broker-dealer or investment adviser; and The successor files an application for registration within 30 days after the succession. A federal covered adviser who has filed a notice under § 11-405(b) of this subtitle may file a notice filing of a successor for the unexpired portion of the year, whether or not the successor is in existence at the time of the filing. There is no fee. The notice filing of a federal covered adviser stands as the notice filing of a successor for 60 days after the succession if: The federal covered adviser succeeds to and continues the business of a federal covered adviser that has filed a notice under § 11-405(b) of this subtitle; and The successor files a notice filing within 30 days after the succession. Each registered agent of a broker-dealer and each registered representative of an investment adviser whose successor is registered in accordance with subsection (a) or (b) of this section shall continue to be registered in accordance with rules that the Commissioner adopts. A registered investment adviser representative of a federal covered adviser whose successor has filed in accordance with subsection (d) of this section shall continue to be registered in accordance with rules that the Commissioner adopts.

The Commissioner may require by rule or order: A minimum capital for a registered broker-dealer, subject to the limitations of § 15 of the Securities Exchange Act of 1934; and Minimum financial requirements for an investment adviser, subject to the limitations of § 222 of the Investment Advisers Act of 1940. These financial requirements may include different requirements for those investment advisers who maintain custody of clients’ funds or securities, or who require payment more than 6 months in advance of fees in excess of $500, and those investment advisers who do not.

The Commissioner may require by rule or order a registered broker-dealer or agent to post a bond or deposit cash or any other equivalent form of security in amounts that the Commissioner may require. The Commissioner’s authority to adopt rules or issue orders under paragraph (1) of this subsection is subject to the limitations of § 15 of the Securities Exchange Act of 1934. The Commissioner may require by rule or order a registered investment adviser or representative who has custody of client funds or securities or requires payments of more than 6 months in advance of fees in excess of $500 to post a bond or deposit cash or any other equivalent form of security in amounts that the Commissioner requires. The Commissioner’s authority to adopt rules or issue orders under paragraph (3) of this subsection is subject to the limitations of § 222 of the Investment Advisers Act of 1940. The condition of such bond or equivalent form of security shall be that the registrant will comply with the provisions of this title and the rules and regulations issued under this title. The bond or equivalent form of security may be drawn to cover the original registration and any renewals of the registration. Every bond or equivalent form of security shall provide that: A suit may not be maintained to enforce any liability on the bond or equivalent form of security unless brought within two years after the contract of sale or other act on which the suit is based; and The liability of the surety on each bond or equivalent form of security to all persons aggrieved may not in any event exceed in the aggregate the penal sum of the bond.

A registered broker-dealer shall make and keep correspondence, memoranda, papers, books, and other records that the Commissioner requires by rule. The Commissioner’s authority to adopt rules under paragraph (1) of this subsection is subject to the limitations of § 15 of the Securities Exchange Act of 1934. A registered investment adviser shall make, keep, and preserve accounts, correspondence, memoranda, papers, books, and other records that the Commissioner requires by rule. The Commissioner’s authority to adopt rules under paragraph (3) of this subsection is subject to the limitations of § 222 of the Investment Advisers Act of 1940. With respect to investment advisers, the Commissioner by rule or order may require that certain information be furnished or disseminated as appropriate in the public interest or for the protection of investors and advisory clients. To the extent determined by the Commissioner in the Commissioner’s discretion, information furnished to clients or prospective clients of an investment adviser that would be in compliance with the disclosure requirements of the Investment Advisers Act of 1940 and the rules thereunder may be used in whole or partial satisfaction of this requirement. A registered broker-dealer shall file financial reports that the Commissioner requires by rule or order. The Commissioner’s authority to adopt rules under paragraph (1) of this subsection is subject to the limitations of § 15 of the Securities Exchange Act of 1934. A registered investment adviser shall file the financial reports that the Commissioner requires by rule or order. The Commissioner’s authority to adopt rules under paragraph (3) of this subsection is subject to the limitations of § 222 of the Investment Advisers Act of 1940. A registrant shall promptly file a correcting amendment, if: The information contained in any document filed with the Commissioner is or becomes inaccurate or incomplete in any material respect; and The registrant has not provided notification of the correction under § 11-402 of this subtitle. A federal covered adviser shall promptly file a correcting amendment with the Commissioner, if: The information contained in any document filed with the Commissioner by the federal covered adviser is or becomes inaccurate in any material respect; and The Securities and Exchange Commission requires the correcting amendment. All the records referred to in subsection (a) of this section are subject at any time or from time to time to the reasonable periodic, special, or other examinations by representatives of the Commissioner, within or without this State, which the Commissioner considers necessary or appropriate in the public interest or for the protection of investors. The Commissioner may perform an audit or inspection at any time and without prior notice. The Commissioner may copy and remove for audit or inspection copies of all records the Commissioner reasonably considers necessary or appropriate to conduct the audit or inspection. For the purpose of avoiding unnecessary duplication of examinations, the Commissioner, to the extent the Commissioner considers it practicable in administering this subsection, may cooperate with the securities administrators of other states, the Securities and Exchange Commission, and any national securities exchange or national securities association registered under the Securities Exchange Act of 1934.

The Commissioner by order may deny, suspend, or revoke any registration if the Commissioner finds that the order is in the public interest and that the applicant or registrant or, in the case of a broker–dealer or investment adviser, any partner, officer, or director, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling the broker–dealer or investment adviser: Has filed an application for registration which, as of its effective date or as of any date after filing in the case of an order denying effectiveness, was incomplete in any material respect or contained any statement which was, in light of the circumstances under which it was made, false or misleading with respect to any material fact; Has willfully violated or willfully failed to comply with any provisions of this title, a predecessor act, or any rule or order under this title or a predecessor act; Has been convicted, within the last 10 years, of a felony, or of an offense that: Involves the taking of a false oath, the making of a false report, bribery, perjury, burglary, or attempt or conspiracy to commit any of those offenses; Arises out of the conduct of business as, or employment by or association with, a broker–dealer, municipal or government securities broker or dealer, investment adviser, bank, savings institution, trust company, credit union, savings and loan association, insurance company or insurance producer, fiduciary, investment company, accountant, or real estate agent or broker, or any entity or person required to be registered under the Commodity Exchange Act; or Involves the larceny, theft, robbery, extortion, forgery, counterfeiting, fraudulent concealment, embezzlement, fraudulent conversion, or misappropriation of funds or securities, or an attempt or conspiracy to commit any of those offenses; Is permanently or temporarily enjoined by any court of competent jurisdiction from engaging in or continuing any conduct or practices involving any aspect of the securities or investment advisory or any other financial services business; Is the subject of an order of the Commissioner denying, suspending, or revoking registration as a broker–dealer, agent, investment adviser, or investment adviser representative; Is the subject of an order entered within the past five years by the securities administrator or any other financial services regulator of any state or by the Securities and Exchange Commission denying, suspending, or revoking registration as a broker–dealer, investment adviser, investment adviser representative, or agent or the substantial equivalent of those terms as defined in this title, or any other financial services license or registration, or is the subject of an order by the Commodity Futures Trading Commission denying, suspending, or revoking registration under the Commodity Exchange Act, or is suspended, expelled, or barred from a national securities exchange or national securities association registered under the Securities Exchange Act of 1934 either by action of a national securities exchange or national securities association, the effect of which action has not been stayed by appeal or otherwise, or by order of the Securities and Exchange Commission, or is the subject of a United States post office fraud order, but: The Commissioner may not institute a revocation or suspension proceeding under this item (6) more than one year from the date of the order or action relied on; and The Commissioner may not enter an order under this item (6) on the basis of an order under another state act unless that order was based on facts which would currently constitute a ground for an order under this section; Has engaged in dishonest or unethical practices in the securities or investment advisory or any other financial services business; Is insolvent, either in the sense that the person’s liabilities exceed assets or in the sense that the person cannot meet obligations as they mature, but the Commissioner may not enter an order against a broker–dealer or investment adviser under this item (8) without a finding of insolvency as to the broker–dealer or investment adviser; Is not qualified on the basis of factors such as training, experience, and knowledge of the securities or investment advisory or any other financial services business, except as otherwise provided in subsection (c) of this section; Has failed reasonably to supervise the broker–dealer’s agents, if the person is a broker–dealer, or the investment adviser’s representatives, if the person is an investment adviser; Has failed to pay the proper fee, but the Commissioner may enter only a denial order under this item (11), and the Commissioner shall vacate the order when the deficiency is corrected; Is subject to a request from the Child Support Administration to suspend or revoke a registration based on failure to pay support obligations; Refuses to allow the Commissioner to conduct or otherwise impedes the Commissioner in conducting an audit or inspection under § 11–411(f) of this subtitle or refuses access to a registrant’s office to conduct an audit or inspection under § 11–411(f) of this subtitle; or Is the subject of a cease and desist order issued by the Securities and Exchange Commission or issued under the securities, commodities, investment, franchise, banking, finance, or insurance laws of a state. In this subsection, “final administrative order” does not include an order that is stayed or subject to further review or appeal. If an applicant for initial registration discloses the existence of a final judicial or administrative order to the Commissioner before the effective date of the initial registration, the Commissioner may not institute a suspension or revocation proceeding based solely on the judicial or administrative order unless the proceeding is initiated within one year after the effective date of the applicant’s initial registration. The following provisions govern the application of subsection (a)(9) of this section: The Commissioner may not enter an order against a broker–dealer on the basis of the lack of qualification of any person other than that broker–dealer if the broker–dealer is an individual, or an agent of the broker–dealer; The Commissioner may not enter an order against an investment adviser on the basis of the lack of qualification of any person other than that investment adviser if the investment adviser is an individual, or an investment adviser representative of the investment adviser; The Commissioner may not enter an order solely on the basis of lack of experience if the applicant or registrant is qualified by training or knowledge or both; The Commissioner shall consider that an agent who will work under the supervision of a registered broker–dealer need not have the same qualifications as a broker–dealer and that an investment adviser representative who will work under the supervision of a registered investment adviser need not have the same qualifications as an investment adviser; The Commissioner shall consider that an investment adviser is not necessarily qualified solely on the basis of experience as a broker–dealer or agent. When the Commissioner finds that an applicant for initial or renewal registration as a broker–dealer is not qualified as an investment adviser, the Commissioner by order may condition the applicant’s registration as a broker–dealer upon the broker–dealer not transacting business in this State as an investment adviser; and The Commissioner by rule may provide for an examination, which may be written, oral, or both, to be taken by any class of or all applicants. The Commissioner by rule or order may waive the examination requirement as to a person or class of persons if the Commissioner determines that the examination is not necessary or appropriate in the public interest or for the protection of investors.

The Commissioner by order summarily may postpone or suspend registration pending final determination of any proceeding under § 11-412 of this subtitle. On the entry of the order, the Commissioner promptly shall notify the applicant or registrant, as well as the employer or prospective employer if the applicant or registrant is an agent or investment adviser representative: That it has been entered; The reasons for its entry; and That within 15 days after the receipt of a written request the matter will be set down for hearing. If a hearing is not requested and one is not ordered by the Commissioner, the order will remain in effect until it is modified or vacated by the Commissioner. If a hearing is requested or ordered, the Commissioner, after notice and opportunity for hearing, may modify or vacate the order or extend it until final determination.

By order, the Commissioner may cancel a registration or application, if the Commissioner finds that the applicant or registrant: Has abandoned the application; Is no longer in existence; Has ceased to do business as a broker-dealer, agent, investment adviser, or investment adviser representative; Is subject to an adjudication of mental incompetence or the control of a committee, conservator, or guardian; or Cannot be located after reasonable search. The Commissioner may deem abandoned a notice filing that a federal covered adviser has filed under § 11-405 of this subtitle, if the Commissioner finds that the federal covered adviser: Has abandoned the notice filing; Is no longer in existence; Has ceased to do business as a federal covered adviser; Is subject to adjudication of mental incompetence or to the control of a committee, conservator, or guardian; or Cannot be located after a reasonable search.

Withdrawal from registration as a broker-dealer, agent, investment adviser, or investment adviser representative becomes effective 90 days after receipt of an application to withdraw or within any shorter period of time which the Commissioner determines, unless: A revocation or suspension proceeding is pending when the application is filed; or A proceeding to revoke, suspend, or impose conditions on the withdrawal is instituted within 90 days after the application is filed. If a proceeding is pending or instituted, withdrawal becomes effective at the time and on the conditions the Commissioner by order determines. If no proceeding is pending or instituted and withdrawal automatically becomes effective, the Commissioner nevertheless may institute a revocation or suspension proceeding under § 11-412(a)(2) of this subtitle within 2 years after withdrawal became effective and enter a revocation or suspension order as of the last date on which registration was effective.

An order may not be entered under any part of §§ 11-412 through 11-415 of this subtitle, except § 11-413(a), without: Appropriate prior notice to the applicant or registrant, or person submitting a notice filing, as well as the employer or prospective employer if the applicant or registrant is an agent or investment adviser representative; Opportunity for hearing; and Written findings of fact and conclusions of law.

On notice and hearing as provided in § 11-416 of this subtitle, the Commissioner may fine any broker-dealer, agent, investment adviser, or investment adviser representative up to a maximum amount of $5,000 for any single violation of this title.