Agent – Definition
For the sake of being thorough, you should know how the Uniform Securities Act defines an agent, word-for-word. While it’s highly unlikely that you’ll be quizzed on the exact definition, an understanding of it will underlie numerous questions on the exam.
An agent is:
any individual other than a broker-dealer who represents a broker-dealer or issuer in effecting or attempting to effect purchases or sales of securities.
One interesting point to note in the Uniform Securities Act’s definition of an agent is that people are considered agents even if they attempt to effect transactions. In other words, anyone who is viewed as marketing securities or transaction services to the public must be registered, even if their attempts do not result in forming a business relationship at that time. This means that future agents and employees of broker-dealers may not begin marketing their services until their registration as an agent is complete.
The definition of an agent under the Uniform Securities Act is subject to a long list of exceptions like investment advisers and broker-dealers.
Agents representing broker-dealers DO NOT have to register with the state if:
- 1. They have no place of business in the state and their only clients are institutional investors
- 2. They are registered in another state and the customer is a client that has had an account with the broker-dealer for 30 days prior to the transaction. The agent must also have either worked with the client before, or must be applying for registration in the state.
Agents representing issuers DO NOT have to register with the state if:
- 1. They only engage in transactions in certain exempt securities
Explanation: If an agent works for an issuer of certain exempt securities (e.g., United States government), and he or she effects transactions only in these securities (e.g., sells government bonds), the agent will not have to register. The