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 as a broker-dealer or is exempt from registration as a broker-dealer pursuant to Subsection B or D of this section.

Terms Used In New Mexico Statutes 58-13C-401

  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Federal Reserve System: The central bank of the United States. The Fed, as it is commonly called, regulates the U.S. monetary and financial system. The Federal Reserve System is composed of a central governmental agency in Washington, D.C. (the Board of Governors) and twelve regional Federal Reserve Banks in major cities throughout the United States. Source: OCC
  • Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.

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:

(a) the issuer of the securities involved in the transactions;

(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.

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