South Carolina Securities License Requirements Guide

Quick Answer: South Carolina Securities Licensing Overview

The South Carolina Securities Division, part of the Office of the Attorney General, is the main state regulator for securities professionals and firms operating in South Carolina (S.C. Code Ann. § 35-1-601). The Division enforces the South Carolina Uniform Securities Act, found in S.C. Code Ann. § 35-1-101 through § 35-1-703.

There are four primary registration categories:

• Broker-dealer: A firm that buys or sells securities for its own account or for others.
• Agent: An individual (registered representative) acting on behalf of a broker-dealer or issuer.
• Investment adviser (IA): A firm or individual compensated for providing advice about securities.
• Investment adviser representative (IAR): An individual acting on behalf of an investment adviser.

Licensing involves four main steps for all categories: submitting the correct registration form via FINRA's Central Registration Depository (CRD) or the Investment Adviser Registration Depository (IARD), passing required exams, clearing a background check, and paying state fees. South Carolina's rules supplement federal regulations from the SEC and FINRA. Federal covered advisers, registered with the SEC, do not need state IA registration but must file a notice with the Division (S.C. Code Ann. § 35-1-405).

Who Needs a Securities License in South Carolina?

Broker-Dealers

Under S.C. Code Ann. § 35-1-102(4), a broker-dealer is any person in the business of effecting securities transactions for others or their own account. This includes firms opening retail brokerage accounts for South Carolina residents, executing client trades, or operating a trading desk that regularly buys and sells securities for profit.

Exemptions include banks, savings institutions, and trust companies (S.C. Code Ann. § 35-1-401(b)), as well as issuers transacting only in their own securities under specific conditions.

Agents

An agent is an individual who represents a broker-dealer or issuer in effecting or attempting to effect securities purchases or sales (S.C. Code Ann. § 35-1-102(2)). This includes registered representatives cold-calling South Carolina residents, financial consultants selling mutual funds at a bank, or individuals selling variable annuities for an insurance-affiliated broker-dealer.

Clerical and ministerial employees who do not effect transactions are excluded. Officers or directors of an issuer selling the issuer's own securities in exempt transactions are also excluded from the agent definition.

Investment Advisers and IARs

An investment adviser is any person who, for compensation, advises others on the value of securities or the advisability of investing in securities (S.C. Code Ann. § 35-1-102(15)). This includes fee-only financial planners offering portfolio recommendations, robo-adviser platforms serving South Carolina clients, or firms charging a percentage of assets under management.

An investment adviser representative is an individual associated with an IA who makes recommendations, manages accounts, solicits clients, or supervises others who do (S.C. Code Ann. § 35-1-102(16)).

Key Exemptions

• Federal covered advisers: IAs with $110 million or more in assets under management register with the SEC, not the state. They must file a notice (Form ADV) with the South Carolina Securities Division and pay a notice filing fee (S.C. Code Ann. § 35-1-405).
• De minimis rule: An IA with no place of business in South Carolina and no more than five clients in the state during the past 12 months is exempt from state registration (S.C. Code Ann. § 35-1-403(b)).
• Institutional clients: Certain transactions with institutional investors may be exempt. Consult the South Carolina Securities Division for current institutional exemption details.
• Exempt securities and transactions: S.C. Code Ann. § 35-1-201 through § 35-1-203 list securities and transaction types that may not require full registration.

Types of South Carolina Securities Licenses and Requirements

Agent (Registered Representative) Exams

South Carolina uses FINRA and NASAA exam standards. The required exams depend on the products the agent will sell:

The Series 63 (Uniform Securities Agent State Law Examination) or Series 66 (combined state law and investment adviser exam) fulfills South Carolina's state law exam requirement. The Series 66 can substitute for both the Series 63 and Series 65 when taken with the Series 7.

Investment Adviser Representative Exams

IARs must pass either:

• The Series 65 (Uniform Investment Adviser Law Examination), or
• The Series 7 plus the Series 66

Certain professional designations (CFA, CFP, CPA, ChFC, and others recognized by NASAA) may qualify an individual for a Series 65 waiver. Check with the South Carolina Securities Division for the current list of accepted designations.

Required Registration Forms

Background Checks and Disclosure

All applicants must disclose disciplinary history, criminal convictions, civil judgments, and regulatory actions on their Form U4 or Form BD. Individuals registering through CRD must submit fingerprints. FINRA processes fingerprint cards and sends the results to the South Carolina Securities Division. Any material change to disclosed information must be reported promptly via an amended filing.

The South Carolina Securities License Application Process and Fees

Step-by-Step Application

For agents:

1. Your sponsoring broker-dealer submits a Form U4 filing through FINRA's CRD system.
2. Pass required FINRA and NASAA qualification exams. Schedule these through Prometric or Pearson VUE.
3. Submit fingerprints using your firm's FINRA-approved process.