South Dakota Codified Laws 47-31B-401. Broker-dealer registration requirement and exemptions
(a) Registration requirement. It is unlawful for a person to transact business in this state as a broker–dealer unless the person is registered under this chapter as a broker–dealer or is exempt from registration as a broker–dealer under subsection (b) or (d).
(b) Exemptions from registration. The following persons are exempt from the registration requirement of subsection (a):
Terms Used In South Dakota Codified Laws 47-31B-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
- Person: includes natural persons, partnerships, associations, cooperative corporations, limited liability companies, and corporations. See South Dakota Codified Laws 2-14-2
(1) A broker–dealer without a place of business in this state if its only transactions effected in this state are with:
(A) The issuer of the securities involved in the transactions;
(B) A broker–dealer registered as a broker–dealer under this chapter or not required to be registered as a broker–dealer under this chapter;
(C) An institutional investor;
(D) A nonaffiliated federal covered investment adviser with investments under management in excess of one hundred million dollars 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 this state and the person is registered as a broker–dealer under the Securities Exchange Act of 1934 or not required to be registered under the Securities Exchange Act of 1934 and is registered under 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 this state but was not present in this state when the customer relationship was established, if:
(i) The broker–dealer is registered under the Securities Exchange Act of 1934 or not required to be registered under the Securities Exchange Act of 1934 and is registered under 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
(ii) Within forty–five days after the customer’s first transaction in this state, the person files an application for registration as a broker–dealer in this state and a further transaction is not effected more than seventy–five days after the date on which the application is filed, or, if earlier, the date on which the director notifies the person that the director has denied the application for registration or has stayed the pendency of the application for good cause;
(G) Not more than three customers in this state during the previous twelve months, in addition to those customers specified in subparagraphs (A) through (F) and under subparagraph (H), if the broker–dealer is registered under the Securities Exchange Act of 1934 or not required to be registered under the Securities Exchange Act of 1934 and is registered under the securities act of the state in which the broker–dealer has its principal place of business; and
(H) Any other person exempted by rule adopted or order issued under this chapter; 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.