North Dakota Securities License Requirements Guide

North Dakota requires broker-dealers, agents, investment advisers, and investment adviser representatives to register with the Office of the Securities Commissioner unless a specific exemption applies.

Quick Answer: North Dakota Securities Licensing Overview

North Dakota's securities industry is regulated by the Office of the Securities Commissioner, also known as the North Dakota Securities Department. This agency operates under the authority of the North Dakota Century Code (NDCC) Title 10, Chapter 04. Generally, anyone who sells securities, solicits securities transactions, or provides investment advice for compensation within the state must be registered, unless a statutory exemption applies.

The four core registration categories under North Dakota law are:

• Broker-Dealer: A firm or individual acting as a firm that buys or sells securities for its own account or for the accounts of others as a business.
• Agent: An individual who represents a broker-dealer or issuer in effecting or attempting to effect purchases or sales of securities.
• Investment Adviser: A person who, for compensation, engages in the business of advising others about securities, either directly or through publications or writings.
• Investment Adviser Representative (IAR): An individual who is employed by or associated with an investment adviser and who makes recommendations, manages accounts, or solicits clients.

North Dakota participates in the national registration infrastructure. Broker-dealers and agents register through FINRA's Central Registration Depository (CRD) system. Investment advisers and IARs register through the Investment Adviser Registration Depository (IARD) system. State filings are made through these platforms.

Who Needs a Securities License in North Dakota?

Registration requirements are triggered by activity, not solely by having an office in the state. If you are interacting with North Dakota clients or conducting transactions in the state, you likely need to be registered.

Broker-Dealers

A broker-dealer must register in North Dakota if it effects or attempts to effect transactions in securities in the state, or if it has a place of business in North Dakota. This applies to firms, not individuals. Individuals acting on behalf of a broker-dealer register as agents.

Agents

An agent is an individual who represents a broker-dealer or an issuer in securities transactions. Registration is required for any agent who transacts business in North Dakota. An agent of an issuer, however, may not be required to register if the transaction is exempt under North Dakota law or if the agent is not compensated for the transaction.

Investment Advisers: State vs. Federal Registration Threshold

The threshold that determines whether an investment adviser registers with North Dakota or with the SEC is based on assets under management (AUM):

• Federal (SEC) registration: Required if the adviser manages $110 million or more in AUM (under the Dodd-Frank Act thresholds). Once federally registered, the adviser files a notice filing with North Dakota rather than a full state registration.
• State (North Dakota) registration: Required if the adviser manages less than $100 million in AUM and has a place of business in North Dakota, or has more than a de minimis number of clients in the state. Advisers between $100 million and $110 million in AUM may register with either the SEC or the state, depending on circumstances.

Investment Adviser Representatives (IARs)

IARs must register in every state where they have a place of business or where they have more than a de minimis number of clients, regardless of whether their employing firm is state- or federally registered. There is no federal registration system for IARs. All IAR registrations run through the states via IARD.

The North Dakota Securities Licensing Application Process

Registration in North Dakota follows a structured process that runs primarily through FINRA's CRD and IARD systems.

Broker-Dealers

1. Complete and file Form BD through the CRD system.
2. Pay the applicable North Dakota registration fee through CRD.
3. Submit any required disclosure documents and fingerprint cards through CRD.
4. Designate a qualified principal and ensure all agents are separately registered.
5. Comply with any surety bond requirements. Consult the North Dakota Securities Department for current bond amounts, as these vary by firm type.

Agents

1. Complete and file Form U4 through the CRD system.
2. Pass required examinations (see below).
3. Disclose all required background information, including criminal history, regulatory actions, and civil proceedings.
4. The employing broker-dealer must be registered in North Dakota before the agent's registration becomes effective.

Investment Advisers

1. Complete and file Form ADV (Parts 1 and 2) through the IARD system.
2. Pay the applicable North Dakota registration fee through IARD.
3. Submit required financial statements if the adviser has custody of client funds or charges substantial prepaid fees. Consult the North Dakota Securities Department for specific thresholds.
4. Surety bond requirements may apply depending on the adviser's custody status and financial condition. Consult the North Dakota Securities Department for current requirements.

Investment Adviser Representatives (IARs)

1. Complete and file Form U4 through the IARD system.
2. Pass required examinations (see below).
3. Disclose all required background information.
4. The employing investment adviser must be registered or notice-filed in North Dakota before the IAR's registration becomes effective.

Examination Requirements

North Dakota follows the standard NASAA examination framework. Required exams depend on your registration category:

Exam waivers may be available for individuals who hold certain professional designations (such as CFA, CFP, CPA, or ChFC). The North Dakota Securities Department reviews waiver requests on a case-by-case basis. If you hold a qualifying designation, contact the department before scheduling exams.

Background Checks and Disclosures

All applicants must disclose criminal history, prior regulatory actions, civil judgments, and customer complaints through Form U4 or Form ADV, as applicable. The Office of the Securities Commissioner reviews this information as part of the application review. Fingerprinting is required for broker-dealer agents through the CRD system.

North Dakota Securities License Fees and Renewal

Note on fees: HB 1011 from the 69th Legislative Assembly, which would have amended fee provisions under NDCC 10-04-10, failed to pass (yeas 0, nays 47). The fee structure in place prior to that bill's introduction therefore remains in effect. However, because the source material does not include the current published fee schedule from the North Dakota Securities Department, exact dollar amounts are not listed here. Consult the North Dakota Securities Department fee schedule directly at the official website or contact the department. Fees are authorized under NDCC 10-04-05.

Fee Comparison Table

Fees are paid through CRD (for broker-dealers and agents) or IARD (for investment advisers and IARs) at the time of application and renewal.

Renewal Deadlines and Procedures

Registrations in North Dakota renew annually. The standard renewal period runs through December 31 of each calendar year, with renewals processed through CRD and IARD during the annual renewal window. Firms and individuals must ensure their renewal fees are submitted and their disclosure information is current before the deadline.

Failure to renew on time results in the registration lapsing. A lapsed registration means you cannot legally conduct securities business in North Dakota until the registration is reinstated. Reinstatement may require a new application and payment of applicable fees rather than a simple renewal. Operating with a lapsed registration can trigger enforcement action.

Continuing Education

Agents registered through FINRA are subject to FINRA's Regulatory Element and Firm Element continuing education requirements, which apply on a national basis and satisfy North Dakota's ongoing competency expectations. IARs are subject to NASAA's IAR continuing education requirements, which North Dakota has adopted. Consult the North Dakota Securities Department and NASAA for current IAR CE program specifics, as requirements and implementation timelines have been phased in across states.

Common Exemptions from North Dakota Securities Licensing

Not every securities-related activity triggers a registration requirement. North Dakota law provides exemptions for certain securities, transactions, and persons. Claiming an exemption incorrectly is a serious mistake. If you are relying on an exemption, document your basis carefully.

Exemptions for Certain Securities (NDCC 10-04-06)

North Dakota law generally exempts the following types of securities from registration requirements:

• Securities issued or guaranteed by the United States, any state, or any political subdivision.
• Securities issued or guaranteed by a foreign government with which the United States maintains diplomatic relations.
• Securities issued by a bank, savings institution, or trust company supervised by a state or federal banking authority.
• Securities listed on recognized national securities exchanges (subject to conditions).
• Securities issued by a nonprofit organization under certain conditions.

Exemptions for Certain Transactions (NDCC 10-04-06)

North Dakota law generally exempts the following types of transactions from registration requirements:

• Isolated non-issuer transactions: A single, isolated transaction not involving a public offering and not made by or for an issuer or underwriter.
• Private placements: Transactions not involving a public offering, made to a limited number of sophisticated investors, subject to conditions set out in North Dakota law.
• Transactions with institutional investors: Sales to banks, insurance companies, registered investment companies, and similar entities.
• Transactions pursuant to a court order: Such as sales in connection with bankruptcy proceedings.

Exemptions for Certain Persons (NDCC 10-04-07)

North Dakota law generally exempts the following persons from registration requirements:

• Banks and trust companies: Institutions supervised by state or federal banking authorities are generally exempt from broker-dealer and investment adviser registration requirements when acting in their institutional capacity.
• Out-of-state broker-dealers with no place of business in North Dakota: A broker-dealer with no office in North Dakota and whose only North Dakota clients are certain institutional investors or existing clients who are temporarily in the state may qualify for an exemption. The conditions are specific.
• Out-of-state investment advisers with limited clients: An investment adviser with no place of business in North Dakota and fewer than six clients in the state during a 12-month period may be exempt from state registration. This is the "de minimis" exemption. Exceeding five clients triggers full registration.
• Agents of issuers in exempt transactions: An agent of an issuer who effects only transactions that are exempt under North Dakota law and who receives no commission or other remuneration is not required to register as an agent.

Exemptions are not self-executing in all cases. Some require a notice filing or affirmative claim. Consult the North Dakota Securities Department or qualified securities counsel before relying on any exemption.

Next Steps: Resources and Contact Information

North Dakota Office of the Securities Commissioner

The primary regulatory contact for all securities licensing questions in North Dakota is:

Office of the Securities Commissioner State Capitol, 600 East Boulevard Avenue, Dept. 414 Bismarck, ND 58505-0510

Phone: (701) 328-2910 Toll-free: (800) 297-5124 (within North Dakota) Email: ndsecurities@nd.gov Website: https://www.nd.gov/securities

Key Forms and Systems

• Form BD, Form U4, Form U5: Filed through FINRA's CRD system at https://www.finra.org
• Form ADV, Form U4 (IARs): Filed through the IARD system at https://www.iard.com
• NASAA resources (model rules, IAR CE information): https://www.nasaa.org

Verifying a License or Checking Disciplinary History

Use FINRA's BrokerCheck tool at https://brokercheck.finra.org to verify broker-dealer and agent registrations and review disciplinary history. For investment advisers and IARs, use the SEC's Investment Adviser Public Disclosure (IAPD) database at https://www.adviserinfo.sec.gov. The North Dakota Securities Department can also confirm registration status directly.

When to Get Legal Counsel

If your situation involves any of the following, consult a securities attorney before proceeding:

• Relying on a registration exemption, particularly private placement or de minimis exemptions.
• Structuring a new firm or product that may or may not trigger registration.
• Responding to a regulatory inquiry or enforcement action from the Office of the Securities Commissioner.
• Determining whether your AUM level requires state or federal registration.

The Office of the Securities Commissioner staff can answer general procedural questions, but they cannot provide legal advice. For anything beyond a straightforward registration application, qualified legal counsel is the right call.