Source: http://www.rld.state.nm.us/securities-division/nmsa-58-13c-article-4.aspx
Timestamp: 2015-10-09 21:47:59
Document Index: 621831250

Matched Legal Cases: ['§ 401', '§ 402', '§ 403', '§ 404', '§ 405', '§ 406', '§ 407', '§ 408', '§ 409', '§ 410', '§ 411', '§ 412']

Broker-Dealers, Agents, Investment Advisers, Investment Adviser Representatives
and Federal Covered Investment Advisers Section
58-13C-401 Broker-dealer registration requirement and exemptions.
58-13C-402 Agent registration requirement and exemptions.
58-13C-403 Investment adviser registration requirement and exemptions.
58-13C-404 Investment adviser representative registration requirement and exemptions.
58-13C-405 Federal covered investment adviser notice filing requirement.
58-13C-406 Registration by broker-dealer, agent, investment adviser and investment adviser representative.
58-13C-407 Succession and change in registration of broker-dealer or investment adviser.
58-13C-408 Termination of employment or association of agent and investment adviser representative and transfer of employment or association.
58-13C-409 Withdrawal of registration of broker-dealer, agent, investment adviser and investment adviser representative.
58-13C-410 Filing fees.
58-13C-411 Post-registration requirements.
58-13C-412 Denial, revocation, suspension, withdrawal, restriction, condition or limitation of registration.
58-13C-401. Broker-dealer registration requirement and exemptions. (2009) A. It is unlawful for a person to transact business in New Mexico as a broker-dealer unless the person is registered pursuant to the New Mexico Uniform Securities Act [58-13C-101 NMSA 1978] as a broker-dealer or is exempt from registration as a broker-dealer pursuant to Subsection B or D of this section.
B. The following persons are exempt from the registration requirement of Subsection A of this section:
(1) a broker-dealer without a place of business in New Mexico if its only transactions effected in New Mexico are with:
(b) a broker-dealer registered as a broker-dealer pursuant to the New Mexico Uniform Securities Act or not required to be registered as a broker-dealer pursuant to that act;
(c) an institutional investor; (d) a nonaffiliated federal covered investment adviser with investments under management in excess of one hundred million dollars ($100,000,000) acting for the account of others pursuant to discretionary authority in a signed record;
(e) a bona fide preexisting customer whose principal place of residence is not in New Mexico and the person is registered as a broker-dealer pursuant to the federal Securities Exchange Act of 1934 or not required to be registered pursuant to that act and is registered pursuant to the securities act of the state in which the customer maintains a principal place of residence;
(f) a bona fide preexisting customer whose principal place of residence is in New Mexico but was not present in New Mexico when the customer relationship was established, if: 1) the broker-dealer is registered pursuant to the federal Securities Exchange Act of 1934 or not required to be registered or licensed pursuant to that act and is registered pursuant to the securities laws of the state in which the customer relationship was established and where the customer had maintained a principal place of residence; and 2) within forty-five days after the customer's first transaction in New Mexico, the person files an application for registration as a broker-dealer in New Mexico and no further transactions are effected more than forty-five days after the date on which the application is filed. Only unsolicited transactions are permitted pursuant to this subparagraph; or (g) any other person exempted by rule adopted or order issued pursuant to the New Mexico Uniform Securities Act; and
(2) a person that deals solely in United States government securities and is supervised as a dealer in government securities by the board of governors of the federal reserve system, the comptroller of the currency, the federal deposit insurance corporation or the office of thrift supervision.
C. It is unlawful for a broker-dealer, or for an issuer engaged in offering, offering to purchase, purchasing or selling securities in New Mexico, directly or indirectly, to employ or associate with an individual to engage in an activity related to securities transactions in New Mexico 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 investment adviser by an order of the director pursuant to the New Mexico Uniform Securities Act, the securities and exchange commission or a self-regulatory organization. A broker-dealer or issuer does not violate this subsection if the broker-dealer or issuer did not know, and in the exercise of reasonable care could not have known, of the suspension, revocation or bar. Upon request from a broker-dealer or issuer and for good cause, an order pursuant to the New Mexico Uniform Securities Act may modify or waive, in whole or in part, the application of the prohibitions of this subsection to the broker-dealer.
D. A rule adopted or order issued pursuant to the New Mexico Uniform Securities Act may permit:
(1) a broker-dealer that is registered in Canada or other foreign jurisdiction and that does not have a place of business in New Mexico to effect transactions in securities with or for, or attempt to effect the purchase or sale of any securities by:
(a) an individual from Canada or other foreign jurisdiction who is temporarily present in New Mexico and with whom the broker-dealer had a bona fide customer relationship before the individual entered the United States;
(b) an individual from Canada or other foreign jurisdiction who is present in New Mexico and whose transactions are in a self-directed tax advantaged retirement plan of which the individual is the holder or contributor in that foreign jurisdiction; or
(c) an individual who is present in New Mexico, with whom the broker-dealer customer relationship arose while the individual was temporarily or permanently a resident in Canada or the other foreign jurisdiction; and (2) an agent who represents a broker-dealer that is exempt pursuant to this subsection to effect transactions in securities or attempt to effect the purchase or sale of securities in New Mexico as permitted for a broker-dealer described in Paragraph (1) of this subsection.
History: Laws 2009, ch. 82, § 401.
58-13C-402. Agent registration requirement and exemptions. (2009) A. It is unlawful for an individual to transact business in New Mexico as an agent unless the individual is registered pursuant to the New Mexico Uniform Securities Act as an agent or is exempt from registration as an agent pursuant to Subsection B of this section.
(1) an individual who represents a broker-dealer in effecting transactions in New Mexico limited to those described in Section 15(h)(2) of the federal Securities Exchange Act of 1934 (15 U.S.C. Section 78(h)(2));
(2) an individual who represents a broker-dealer that is exempt pursuant to Subsection B or D of Section 401 [58-13C-401 NMSA 1978] of the New Mexico Uniform Securities Act;
(4) an individual who represents a broker-dealer registered in New Mexico pursuant to Subsection A of Section 401 of the New Mexico Uniform Securities Act or exempt from registration pursuant to Subsection B of Section 401 of that act in the offer and sale of securities for an account of a nonaffiliated federal covered investment adviser with investments under management in excess of one hundred million dollars ($100,000,000) acting for the account of others pursuant to discretionary authority in a signed record;
(5) an individual who represents an issuer in connection with the purchase by the issuer of the issuer's own securities; (6) an individual who represents an issuer and who restricts participation to performing clerical or ministerial acts; or
(7) any other individual exempted by rule adopted or order issued pursuant to the New Mexico Uniform Securities Act [58-13C-101 NMSA 1978]. C. The registration of an agent is effective only while the agent is employed by or associated with a broker-dealer registered pursuant to the New Mexico Uniform Securities Act or an issuer that is offering, selling or purchasing its securities in New Mexico. The registration of an agent is only effective with respect to transactions effected as an employee or agent on behalf of the broker-dealer or issuer for whom the agent is registered.
D. It is unlawful for a broker-dealer, or an issuer engaged in offering, selling or purchasing securities in New Mexico, to employ or associate with an agent who transacts business in New Mexico on behalf of broker-dealers or issuers unless the agent is registered pursuant to Subsection A of this section or exempt from registration pursuant to Subsection B of this section.
E. An individual shall not act as an agent for more than one broker-dealer or one issuer at a time, unless the broker-dealer or the issuer for which the agent acts is affiliated by direct or indirect common control or is authorized by rule or order pursuant to the New Mexico Uniform Securities Act.
History: Laws 2009, ch. 82, § 402.
58-13C-403. Investment adviser registration requirement and exemptions. (2009) A. It is unlawful for a person to transact business in New Mexico as an investment adviser unless the person is registered pursuant to the New Mexico Uniform Securities Act as an investment adviser or is exempt from registration as an investment adviser pursuant to Subsection B of this section.
(1) a person without a place of business in New Mexico that is registered pursuant to the securities act of the state in which the person has its principal place of business if its only clients in New Mexico are:
(a) federal covered investment advisers, investment advisers registered pursuant to the New Mexico Uniform Securities Act or broker-dealers registered pursuant to that act;
(c) bona fide preexisting clients whose principal places of residence are not in New Mexico if the investment adviser is registered pursuant to the securities act of the state in which the clients maintain principal places of residence; or
(d) any other client exempted by rule adopted or order issued pursuant to the New Mexico Uniform Securities Act;
(2) a person without a place of business in New Mexico if the person has had, during the preceding twelve months, not more than five clients that are residents in New Mexico in addition to those specified pursuant to Paragraph (1) of this subsection; or
(3) any other person exempted by rule adopted or order issued pursuant to the New Mexico Uniform Securities Act.
C. It is unlawful for an investment adviser, directly or indirectly, to employ or associate with an individual to engage in an activity related to investment advice in New Mexico if the registration of the individual is suspended or revoked or the individual is barred from employment or association with an investment adviser, federal covered investment adviser or broker-dealer by an order of the director pursuant to the New Mexico Uniform Securities Act, the securities and exchange commission or a self-regulatory organization, unless the investment adviser did not know, and in the exercise of reasonable care could not have known, of the suspension, revocation or bar. Upon request from the investment adviser and for good cause, the director, by order, may waive, in whole or in part, the application of the prohibitions of this subsection to the investment adviser.
D. It is unlawful for an investment adviser to employ or associate with an individual required to be registered pursuant to the New Mexico Uniform Securities Act as an investment adviser representative who transacts business in New Mexico on behalf of the investment adviser unless the individual is registered pursuant to Subsection A of Section 404 [58-13C-404 NMSA 1978] of the New Mexico Uniform Securities Act or is exempt from registration pursuant to Subsection B of Section 404 of that act.
History: Laws 2009, ch. 82, § 403.
58-13C-404. Investment adviser representative registration requirement and exemptions. (2009) A. It is unlawful for an individual to transact business in New Mexico as an investment adviser representative unless the individual is registered pursuant to the New Mexico Uniform Securities Act [58-13C-101 NMSA 1978] as an investment adviser representative or is exempt from registration as an investment adviser.
(1) an individual who is employed by or associated with an investment adviser that is exempt from registration pursuant to Subsection B of Section 403 [58-13C-403 NMSA 1978] of the New Mexico Uniform Securities Act or a federal covered investment adviser that is excluded from the notice filing requirements of Section 405 [58-13C-405 NMSA 1978] of that act; and
(2) any other individual exempted by rule adopted or order issued pursuant to the New Mexico Uniform Securities Act.
C. The registration of an investment adviser representative is not effective while the investment adviser representative is not employed by or associated with an investment adviser registered pursuant to the New Mexico Uniform Securities Act or a federal covered investment adviser that has made or is required to make a notice filing under that act.
D. The registration of an investment adviser representative is only effective with respect to transactions effected or advice rendered as an employee or agent on behalf of the investment adviser for whom the investment adviser representative is registered.
E. An individual may transact business as an investment adviser representative for more than one investment adviser or federal covered investment adviser unless a rule adopted or order issued pursuant to the New Mexico Uniform Securities Act prohibits or limits an individual from acting as an investment adviser representative for more than one investment adviser or federal covered investment adviser.
F. It is unlawful for an individual acting as an investment adviser representative, directly or indirectly, to conduct business in New Mexico on behalf of an investment adviser or a federal covered investment adviser if the registration of the individual as an investment adviser representative is suspended or revoked or the individual is barred from employment or association with an investment adviser or a federal covered investment adviser by an order of the director pursuant to the New Mexico Uniform Securities Act, the securities and exchange commission or a self-regulatory organization. Upon request from an investment adviser or a federal covered investment adviser and for good cause, the director, by order issued, may waive, in whole or in part, the application of the requirements of this subsection to the investment adviser or the federal covered investment adviser.
G. An investment adviser registered pursuant to the New Mexico Uniform Securities Act, a federal covered investment adviser that has filed a notice pursuant to Section 405 of that act or a broker-dealer registered pursuant to that act is not required to employ or associate with an individual as an investment adviser representative if the only compensation paid to the individual for a referral of investment advisory clients is paid to an investment adviser registered pursuant to the New Mexico Uniform Securities Act, a federal covered investment adviser that has filed a notice pursuant to Section 405 of that act or a broker-dealer registered pursuant to that act with which the individual is employed or associated as an investment adviser representative, subject to such conditions as the director may impose by rule or by order.
History: Laws 2009, ch. 82, § 404.
58-13C-405. Federal covered investment adviser notice filing requirement. (2009) A. Except with respect to a federal covered investment adviser described in Subsection B of this section, it is unlawful for a federal covered investment adviser to transact business in New Mexico as a federal covered investment adviser unless the federal covered investment adviser complies with Subsection C of this section.
B. The following federal covered investment advisers are not required to comply with Subsection C of this section:
(1) a federal covered investment adviser without a place of business in New Mexico if its only clients in New Mexico are:
(a) federal covered investment advisers, investment advisers registered pursuant to the New Mexico Uniform Securities Act [58-13C-101 NMSA 1978] and broker-dealers registered pursuant to that act;
(c) bona fide preexisting clients whose principal places of residence are not in New Mexico; or
(d) other clients specified by rule adopted or order issued pursuant to the New Mexico Uniform Securities Act; (2) a federal covered investment adviser without a place of business in New Mexico if the person has had, during the preceding twelve months, not more than five clients that are residents in New Mexico in addition to those specified pursuant to Paragraph (1) of this subsection; and
(3) any other person excluded by rule adopted or order issued pursuant to the New Mexico Uniform Securities Act.
C. A person acting as a federal covered investment adviser not excluded pursuant to Subsection B of this section shall file a notice, a consent to service of process complying with Section 611 [58-13C-611 NMSA 1978] of the New Mexico Uniform Securities Act and such records as have been filed with the securities and exchange commission pursuant to the federal Investment Advisers Act of 1940 required by rule adopted or order issued pursuant to the New Mexico Uniform Securities Act and pay the fees specified in Subsection E of Section 410 [58-13C-410 NMSA 1978] of that act.
D. The notice pursuant to Subsection C of this section becomes effective upon its filing.
History: Laws 2009, ch. 82, § 405.
58-13C-406. Registration by broker-dealer, agent, investment adviser and investment adviser representative. (2009) A. A person shall register as a broker-dealer, agent, investment adviser or investment adviser representative by filing an application and a consent to service of process complying with Section 611 [58-13C-611 NMSA 1978] of the New Mexico Uniform Securities Act and paying the fee specified in Section 410 [58-13C-410 NMSA 1978] of that act and any reasonable fees charged by the designee of the director for processing the filing. The application shall contain:
B. If the information or record contained in an application filed pursuant to Subsection A of this section is or becomes inaccurate or incomplete in a material respect, the registrant shall promptly file a correcting amendment.
C. If an order is not in effect or a proceeding is not pending pursuant to Section 412 [58-13C-412 NMSA 1978] of the New Mexico Uniform Securities Act, registration becomes effective at noon on the forty-fifth day after a completed application is filed, unless the registration is denied. A rule adopted or order issued pursuant to the New Mexico Uniform Securities Act may set an earlier effective date or may defer the effective date until noon on the forty-fifth day after the filing of any amendment completing the application.
D. A registration is effective until midnight on December 31 of the year for which the application for registration is filed. Unless an order is in effect pursuant to Section 412 of the New Mexico Uniform Securities Act, a registration may be automatically renewed each year by filing such records as are required by rule adopted or order issued pursuant to that act by paying the fee specified in Section 410 of that act and by paying costs charged by the designee of the director for processing the filings.
E. A rule adopted or order issued pursuant to the New Mexico Uniform Securities Act may impose such other conditions, not inconsistent with the federal National Securities Markets Improvement Act of 1996. An order issued pursuant to the New Mexico Uniform Securities Act may waive, in whole or in part, specific requirements in connection with registration as are in the public interest and for the protection of investors.
History: Laws 2009, ch. 82, § 406.
58-13C-407. Succession and change in registration of broker-dealer or investment adviser. (2009) A. A broker-dealer or investment adviser may succeed to the current registration of another broker-dealer or investment adviser or a notice filing of a federal covered investment adviser, and a federal covered investment adviser may succeed to the current registration of an investment adviser or notice filing of another federal covered investment adviser, by filing as a successor an application for registration pursuant to Section 401 [58-13C-401 NMSA 1978] or 403 [58-13C-403 NMSA 1978] of the New Mexico Uniform Securities Act or a notice pursuant to Section 405 [58-13C-405 NMSA 1978] of that act for the unexpired portion of the current registration or notice filing.
B. A broker-dealer or investment adviser that changes its form of organization or state of incorporation or organization may continue its registration by filing an amendment to its registration if the change does not involve a material change in its financial condition or management. The amendment becomes effective when filed or on a date designated by the registrant in its filing. The new organization is a successor to the original registrant for the purposes of the New Mexico Uniform Securities Act [58-13C-101 NMSA 1978]. If there is a material change in financial condition or management, the broker-dealer or investment adviser shall file a new application for registration. A predecessor registered pursuant to the New Mexico Uniform Securities Act shall stop conducting its securities business other than winding down transactions and shall file for withdrawal of broker-dealer or investment adviser registration within forty-five days after filing its amendment to effect succession.
C. A broker-dealer or investment adviser that changes its name may continue its registration by filing an amendment to its registration. The amendment becomes effective when filed or on a date designated by the registrant.
D. A change of control of a broker-dealer or investment adviser may be made in accordance with a rule adopted or order issued pursuant to the New Mexico Uniform Securities Act.
History: Laws 2009, ch. 82, § 407.
58-13C-408. Termination of employment or association of agent and investment adviser representative and transfer of employment or association. (2009) A. If an agent registered pursuant to the New Mexico Uniform Securities Act [58-13C-101 NMSA 1978] terminates employment by or association with a broker-dealer or issuer, or if an investment adviser representative registered pursuant to that act terminates employment by or association with an investment adviser or federal covered investment adviser, or if either registrant terminates activities that require registration as an agent or investment adviser representative, the broker-dealer, issuer, investment adviser or federal covered investment adviser shall promptly file a notice of termination.
B. If an agent registered pursuant to the New Mexico Uniform Securities Act terminates employment by or association with a broker-dealer registered pursuant to that act and begins employment by or association with another broker-dealer registered pursuant to that act; or if an investment adviser representative registered pursuant to the New Mexico Uniform Securities Act terminates employment by or association with an investment adviser registered pursuant to that act or a federal covered investment adviser that has filed a notice pursuant to Section 405 [58-13C-405 NMSA 1978] of that act and begins employment by or association with another investment adviser registered pursuant to that act or a federal covered investment adviser that has filed a notice pursuant to Section 405 of that act then, upon the filing by or on behalf of the registrant, within thirty days after the filing of notice of termination pursuant to Subsection A of this section, of an application for registration that complies with the requirement of Subsection A of Section 406 [58-13C-406 NMSA 1978] of that act and payment of the filing fee required pursuant to Section 410 [58-13C-410 NMSA 1978] of that act, the registration of the agent or investment adviser representative is immediately effective as of the date of the completed filing if the agent's central registration depository record or successor record or the investment adviser representative's investment adviser registration depository record or successor record does not contain a new or amended disciplinary disclosure within the previous twelve months.
C. The director may prevent the effectiveness of a transfer of an agent or investment adviser representative pursuant to Subsection B of this section based on the public interest and the protection of investors.
D. If the director determines that a registrant or applicant for registration is no longer in existence or has ceased to act as a broker-dealer, agent, investment adviser or investment adviser representative, or is the subject of an adjudication of incapacity or is subject to the control of a committee, conservator or guardian, or cannot reasonably be located, a rule adopted or order issued pursuant to the New Mexico Uniform Securities Act may require the registration be canceled or terminated or the application denied. The director may reinstate a canceled or terminated registration, with or without hearing, and may make the registration retroactive.
History: Laws 2009, ch. 82, § 408.
58-13C-409. Withdrawal of registration of broker-dealer, agent, investment adviser and investment adviser representative. (2009) Withdrawal of registration by a broker-dealer, agent, investment adviser or investment adviser representative becomes effective sixty days after the filing of the application to withdraw or within any shorter period as provided by rule adopted or order issued pursuant to the New Mexico Uniform Securities Act [58-13C-101 NMSA 1978] unless a revocation or suspension proceeding is pending when the application is filed. If a proceeding is pending, withdrawal becomes effective when and upon such conditions as required by rule adopted or order issued pursuant to the New Mexico Uniform Securities Act. The director may institute a revocation or suspension proceeding pursuant to Section 412 [58-13C-412 NMSA 1978] of the New Mexico Uniform Securities Act within one year after the withdrawal became effective automatically and issue a revocation or suspension order as of the last date on which registration was effective if a proceeding is not pending.
History: Laws 2009, ch. 82, § 409.
58-13C-410. Filing fees. (2009) A. A person shall pay a fee of three hundred dollars ($300) when initially filing an application for registration as a broker-dealer and when filing a renewal of registration as a broker-dealer.
B. The fee for an individual shall be fifty dollars ($50.00) when filing an application for registration as an agent, when filing a renewal of registration as an agent and when filing for a change of registration as an agent.
C. A person shall pay a fee of three hundred dollars ($300) when filing an application for registration as an investment adviser and when filing a renewal of registration as an investment adviser.
D. The fee for an individual shall be fifty dollars ($50.00) when filing an application for registration as an investment adviser representative, when filing a renewal of registration as an investment adviser representative and when filing a change of registration as an investment adviser representative.
E. A federal covered investment adviser required to file a notice pursuant to Section 405 [58-13C-405 NMSA 1978] of the New Mexico Uniform Securities Act [58-13C-101 NMSA 1978] shall pay an initial fee of three hundred dollars ($300) and an annual fee of three hundred dollars ($300).
F. A person required to pay a filing or notice fee pursuant to this section may transmit the fee through or to a designee as a rule or order provides pursuant to the New Mexico Uniform Securities Act .
G. An investment adviser representative who is registered as an agent pursuant to Section 402 [58-13C-402 NMSA 1978] of the New Mexico Uniform Securities Act and who represents a person that is both registered as a broker-dealer pursuant to Section 401 [58-13C-401 NMSA 1978] of that act and registered as an investment adviser pursuant to Section 403 [58-13C-403 NMSA 1978] of that act or required as a federal covered investment adviser to make a notice filing pursuant to Section 405 [58-13C-405 NMSA 1978] of that act is not required to pay an initial or annual registration fee for registration as an investment adviser representative.
H. If an application made pursuant to Subsection A, B, C, D or E of this section is denied or withdrawn, the director shall retain any fees paid.
History: Laws 2009, ch. 82, § 410.
58-13C-411. Post-registration requirements. (2009) A. Subject to Section 15(h) of the federal Securities Exchange Act of 1934 (15 U.S.C. Section 78o(h)) or Section 222 of the federal Investment Advisers Act of 1940 (15 U.S.C. Section 80b-22), a rule adopted or order issued pursuant to the New Mexico Uniform Securities Act [58-13C-101 NMSA 1978] may establish minimum financial requirements for broker-dealers registered or required to be registered pursuant to the New Mexico Uniform Securities Act and investment advisers registered or required to be registered pursuant to the New Mexico Uniform Securities Act.
B. Subject to Section 15(h) of the federal Securities Exchange Act of 1934 (15 U.S.C. Section 78o(h)) or Section 222(b) of the federal Investment Advisers Act of 1940 (15 U.S.C. Section 80b-22), a broker-dealer registered or required to be registered pursuant to the New Mexico Uniform Securities Act and an investment adviser registered or required to be registered pursuant to the New Mexico Uniform Securities Act shall file such financial reports as are required by a rule adopted or order issued pursuant to the New Mexico Uniform Securities Act. If the information contained in a record filed pursuant to this subsection is or becomes inaccurate or incomplete in a material respect, the registrant shall promptly file a correcting amendment.
C. Subject to Section 15(h) of the federal Securities Exchange Act of 1934 (15 U.S.C. Section 78o(h)) or Section 222 of the federal Investment Advisers Act of 1940 (15 U.S.C. Section 80b-22):
(1) a broker-dealer registered or required to be registered pursuant to the New Mexico Uniform Securities Act and an investment adviser registered or required to be registered pursuant to the New Mexico Uniform Securities Act shall make and maintain the accounts, correspondence, memoranda, papers, books and other records required by rule adopted or order issued pursuant to the New Mexico Uniform Securities Act;
(2) broker-dealer records required to be maintained pursuant to Paragraph (1) of this subsection may be maintained in any form of data storage acceptable pursuant to Section 17(a) of the federal Securities Exchange Act of 1934 (15 U.S.C. Section 78q(a)) if they are readily accessible to the director; and
(3) investment adviser records required to be maintained pursuant to Paragraph (1) of this subsection may be maintained in any form of data storage required by rule adopted or order issued pursuant to the New Mexico Uniform Securities Act.
D. The records of a broker-dealer registered or required to be registered pursuant to the New Mexico Uniform Securities Act and of an investment adviser registered or required to be registered pursuant to that act are subject to such reasonable periodic, special or other audits or inspections by a representative of the director, within or without New Mexico, as the director considers necessary or appropriate in the public interest and for the protection of investors. An audit or inspection may be made at any time and without prior notice. The director may copy, and remove for audit or inspection copies of, all records the director reasonably considers necessary or appropriate to conduct the audit or inspection. The director may assess a reasonable charge for conducting an audit or inspection pursuant to this subsection.
E. Subject to Section 15(h) of the federal Securities Exchange Act of 1934 (15 U.S.C. Section 78o(h)) or Section 222 of the federal Investment Advisers Act of 1940 (15 U.S.C. Section 80b-22), a rule adopted or order issued pursuant to the New Mexico Uniform Securities Act may require a broker-dealer or investment adviser that has custody of or discretionary authority over funds or securities of a customer or client to obtain insurance or post a bond or other satisfactory form of security in an amount not to exceed two million dollars ($2,000,000). The director may determine the requirements of the insurance, bond or other satisfactory form of security. Insurance or a bond or other satisfactory form of security shall not be required of a broker-dealer registered pursuant to the New Mexico Uniform Securities Act whose net capital exceeds, or of an investment adviser registered pursuant to that act whose minimum financial requirements exceed, the amounts required by rule or order pursuant to that act. The insurance, bond or other satisfactory form of security shall permit an action by a person to enforce any liability on the insurance, bond or other satisfactory form of security if instituted within the time limitations in Paragraph (2) of Subsection J of Section 509 [58-13C-509 NMSA 1978] of the New Mexico Uniform Securities Act.
F. Subject to Section 15(h) of the federal Securities Exchange Act of 1934 (15 U.S.C. Section 78o(h)) or Section 222 of the federal Investment Advisers Act of 1940 (15 U.S.C. Section 80b-22), an agent shall not have custody of funds or securities of a customer except under the supervision of a broker-dealer, and an investment adviser representative shall not have custody of funds or securities of a client except under the supervision of an investment adviser or a federal covered investment adviser. A rule adopted or order issued pursuant to the New Mexico Uniform Securities Act may prohibit, limit or impose conditions on a broker-dealer regarding custody of funds or securities of a customer and on an investment adviser regarding custody of securities or funds of a client.
G. With respect to an investment adviser registered or required to be registered pursuant to the New Mexico Uniform Securities Act, a rule adopted or order issued pursuant to that act may require that information or other records be furnished or disseminated to clients or prospective clients in New Mexico as necessary or appropriate in the public interest and for the protection of investors and advisory clients.
H. A rule adopted or order issued pursuant to the New Mexico Uniform Securities Act may require an individual registered pursuant to Section 402 [58-13C-402 NMSA 1978] or 404 [58-13C-404 NMSA 1978] of that act to participate in a continuing education program approved by the securities and exchange commission and administered by a self-regulatory organization, or, in the absence of such a program, a rule adopted or order issued pursuant to the New Mexico Uniform Securities Act may require continuing education for an individual registered pursuant to Section 404 of that act.
History: Laws 2009, ch. 82, § 411.
58-13C-412. Denial, revocation, suspension, withdrawal, restriction, condition or limitation of registration. (2009) A. If the director finds that the order is in the public interest and that Subsection C of this section authorizes the action, an order issued pursuant to the New Mexico Uniform Securities Act [58-13C-101 NMSA 1978] may postpone, deny, suspend or revoke any registration, limit the investment advisory activities that an applicant or registered person may perform in New Mexico or bar an applicant or registered person or a person who is a partner, officer or director or a person occupying a similar status or performing a similar function for an applicant or registered person from association with a registered broker-dealer or investment adviser or a federal covered investment adviser.
B. If the director finds that the order is in the public interest and Subsection C of this section authorizes the action, an order pursuant to the New Mexico Uniform Securities Act may censure or impose a bar on a registrant. If the director finds that the order is in the public interest and Paragraph (1), (2), (4), (5), (6), (8), (9), (10), (12) or (13) of Subsection C of this section authorizes the action, the director may also impose a civil penalty on a registrant in an amount not to exceed ten thousand dollars ($10,000) for each violation.
C. A person may be disciplined pursuant to Subsection A or B of this section, or both, if the person, or in the case of a broker-dealer or investment adviser, a partner, officer, director or a person having a similar status or performing similar functions or a person directly or indirectly controlling the broker-dealer or investment adviser:
(1) has filed an application for registration in New Mexico pursuant to the New Mexico Uniform Securities Act or the predecessor act within the previous ten years that, as of the effective date of registration or as of any date after filing in the case of an order denying effectiveness, was incomplete in any material respect or contained a statement that, in light of the circumstances under which it was made, was false or misleading with respect to a material fact;
(2) willfully violated or willfully failed to comply with the New Mexico Uniform Securities Act or the predecessor act or a rule adopted or order issued pursuant to the New Mexico Uniform Securities Act or the predecessor act within the previous ten years;
(3) has been convicted of a felony or within the previous ten years has been convicted of a misdemeanor involving a security, a commodity future or an option contract or an aspect of a business involving securities, commodities, investments, franchises, insurance, banking or finance;
(4) is enjoined or restrained by a court of competent jurisdiction in an action instituted by the director pursuant to the New Mexico Uniform Securities Act or the predecessor act, a state, the securities and exchange commission or the United States from engaging in or continuing an act, practice or course of business involving an aspect of a business involving securities, commodities, investments, franchises, insurance, banking or finance;
(a) the securities, depository institution, insurance or other financial services regulator of a state or by the securities and exchange commission or other federal agency denying, revoking, barring or suspending registration as a broker-dealer, agent, investment adviser, federal covered investment adviser or investment adviser representative;
(b) the securities regulator of a state or by the securities and exchange commission against a broker-dealer, agent, investment adviser, investment adviser representative or federal covered investment adviser;
(6) is the subject of an adjudication or determination, after notice and opportunity for hearing, by the securities and exchange commission, the commodity futures trading commission, the federal trade commission, a federal depository institution regulator or a depository institution, insurance or other financial services regulator of a state that the person willfully violated the federal Securities Act of 1933, the federal Securities Exchange Act of 1934, the federal Investment Advisers Act of 1940, the federal Investment Company Act of 1940 or the federal Commodity Exchange Act, the securities or commodities law of a state or a federal or state law pursuant to which a business involving investments, franchises, insurance, banking or finance is regulated;
(7) is insolvent, either because the person's liabilities exceed the person's assets or because the person cannot meet the person's obligations as they mature, but the director shall not enter an order against an applicant or registrant pursuant to this paragraph without a finding of insolvency as to the applicant or registrant;
(8) refuses to allow or otherwise impedes the director from conducting an audit or inspection pursuant to Subsection D of Section 411 [58-13C-411 NMSA 1978] of the New Mexico Uniform Securities Act or refuses access to a registrant's office to conduct an audit or inspection pursuant to Subsection D of Section 411 of that act;
(9) has failed to reasonably supervise an agent, investment adviser representative or other individual, if the agent, investment adviser representative or other individual was subject to the person's supervision and while under that person's supervision committed a violation of the New Mexico Uniform Securities Act or the predecessor act or a rule adopted or order issued pursuant to that act or the predecessor act within the previous ten years;
(10) has not paid the proper filing fee within thirty days after having been notified by the director of a deficiency, but the director shall vacate an order pursuant to this paragraph when the deficiency is corrected;
(a) by a court of competent jurisdiction to have willfully violated the laws of a foreign jurisdiction pursuant to which the business of securities, commodities, investment, franchises, insurance, banking or finance is regulated;
(c) to have been suspended or expelled from membership by or participation in a securities exchange or securities association operating pursuant to the securities laws of a foreign jurisdiction;
(12) is the subject of a cease and desist order issued by the securities and exchange commission or issued pursuant to the securities, commodities, investment, franchise, banking, finance or insurance laws of a state;
(13) has engaged in dishonest or unethical practices in the securities, commodities, investment, franchise, banking, finance or insurance business within the previous ten years; or
(14) is not qualified on the basis of factors such as training, experience and knowledge of the securities business. However, in the case of an application by an agent for a broker-dealer that is a member of a self-regulatory organization or by an individual for registration as an investment adviser representative, a denial order shall not be based on this paragraph if the individual has successfully completed all examinations required by Subsection D of this section. The director may require an applicant for registration pursuant to Section 402 [58-13C-402 NMSA 1978] or 404 [58-13C-404 NMSA 1978] of the New Mexico Uniform Securities Act who has not been registered in a state within the two years preceding the filing of an application in New Mexico to successfully complete an examination.
D. A rule adopted or order issued pursuant to the New Mexico Uniform Securities Act may require that an examination, including an examination developed or approved by an organization of securities regulators, be successfully completed by a class of individuals or all individuals. An order issued pursuant to the New Mexico Uniform Securities Act may waive, in whole or in part, an examination as to an individual and a rule adopted pursuant to that act may waive, in whole or in part, an examination as to a class of individuals if the director determines that the examination is not necessary or appropriate in the public interest and for the protection of investors.
E. The director may postpone, suspend or deny an application summarily; restrict, condition, limit or suspend a registration; or censure, bar or impose a civil penalty on a registrant before final determination of an administrative proceeding. Upon the issuance of an order, the director shall promptly notify each person subject to the order that the order has been issued, the reasons for the action and that within fifteen days after the receipt of a request in a record from the person, the matter will be scheduled for a hearing. If a hearing is not requested and none is ordered by the administrator within thirty days after the date of service of the order, the order becomes final by operation of law. If a hearing is requested or ordered, the director, after notice of and opportunity for hearing to each person subject to the order, may modify or vacate the order or extend the order until final determination.
F. If a hearing is requested or ordered, such hearing shall be conducted pursuant to Subsection B of Section 604 [58-13C-604 NMSA 1978] of the New Mexico Uniform Securities Act. An order shall not be issued pursuant to this section, except in accordance with Subsection E of this section, without:
G. A person that controls, directly or indirectly, a person not in compliance with this section may be disciplined by order of the director pursuant to Subsection A or B of this section, or both, to the same extent as the noncomplying person, unless the controlling person did not know, and in the exercise of reasonable care could not have known, of the existence of conduct that is a ground for discipline pursuant to this section.
H. The director shall not institute a proceeding pursuant to Subsection A or B of this section based solely on material facts actually known by the director unless an investigation or the proceeding is instituted within one year after the director actually acquires knowledge of the material facts.
History: Laws 2009, ch. 82, § 412. Would you like to recieve notifications from us? Subscribe
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