Administrative Code

Virginia Administrative Code
4/15/2024

Chapter 10. General Administration - Securities Act

21VAC5-10-10. Authority.

Pursuant to the authority granted by §§ 13.1-523 and 13.1-523.1 of the Virginia Securities Act (§ 13.1-501 et seq. of the Code of Virginia) the following regulations and forms regarding the administration and implementation of the Virginia Securities Act have been adopted.

The intent of these regulations and forms is to supplant written and unwritten administrative policies and to better reflect the realities of current financial, commercial and regulatory principles and practices.

Should any provision or application of these regulations be held invalid, such invalidity shall not affect other provisions which can be given effect without the invalid provision, and to this end the provisions or applications of these regulations and forms are declared to be severable.

Statutory Authority

§§ 12.1-13 and 13.1-523.1 of the Code of Virginia.

Historical Notes

Derived from Rule 100, Case No. SEC810005, eff. July 1, 1981; amended, Virginia Register Volume 19, Issue 23, eff. July 1, 2003.

21VAC5-10-20. Classification of regulatory standards.

Regulations are regulatory standards adopted and promulgated and shall be considered the highest level of policy applied by the commission.

Forms are prescribed or adopted for the purpose of implementing the Virginia Securities Act. When so prescribed or adopted, use of the forms is mandatory.

Statements made orally or in writing by personnel of the Division of Securities and Retail Franchising in response to inquiries or otherwise, and not specifically identified and promulgated as regulations shall not be considered regulatory standards of the commission and shall not be considered binding upon the commission in connection with specific decisions undertaken by the commission thereafter. The commission may refuse to answer any question based upon a hypothetical situation.

Statutory Authority

§§ 12.1-13 and 13.1-523 of the Code of Virginia.

Historical Notes

Derived from Rule 101, Case No. SEC810005, eff. July 1, 1981; amended, Virginia Register Volume 15, Issue 22, eff. July 1, 1999.

21VAC5-10-30. Application.

All regulations shall be applied collectively, to the extent relevant, in connection with specific determinations made by the Commission in the course of its regulatory function. The Commission will make its determination on the basis of specific characteristics and circumstances of the individual matter under consideration and in light of the basic statutory purposes for regulation in the particular area. The captions of the various regulations are for convenience only. Should there be a conflict between the caption and the text of a regulation the text will be the controlling factor.

Because regulations and forms cannot adequately anticipate all potential application requirements, the failure to satisfy all regulatory standards of the Commission will not necessarily foreclose the possibility of a favorable disposition of a matter pending before the Commission, and, similarly will not necessarily preclude an unfavorable disposition if the specific characteristics and circumstances so warrant.

Statutory Authority

§ 13.1-523 of the Code of Virginia.

Historical Notes

Derived from Rule 102, Case No. SEC810005, eff. July 1, 1981; amended by Case No. SEC910057, eff. July 1, 1991.

21VAC5-10-40. Definitions.

As used in this title, the following regulations and forms pertaining to securities, instructions and orders of the commission, the following meanings shall apply:

"Act" means the Securities Act contained in Chapter 5 (§ 13.1-501 et seq.) of Title 13.1 of the Code of Virginia.

"Applicant" means a person on whose behalf an application for registration or a registration statement is filed.

"Application" means all information required by the forms prescribed by the commission as well as any additional information required by the commission and any required fees.

"Bank Holding Company Act of 1956" (12 USC § 1841 et seq.) means the federal statute of that name as now or hereafter amended.

"Boiler room tactics" mean operations or high pressure tactics utilized in connection with the promotion of speculative offerings by means of an intensive telephone campaign or unsolicited calls to persons not known by or having an account with the salesmen or broker-dealer represented by him, whereby the prospective purchaser is encouraged to make a hasty decision to invest, irrespective of his investment needs and objectives.

"Breakpoint" means the dollar level of investment necessary to qualify a purchaser for a discounted sales charge on a quantity purchase of open-end management company shares.

"Commission" means State Corporation Commission.

"CRD" means the Central Registration Depository operated by FINRA as the central licensing and registration system for the United States securities industry and its regulators.

"Division" means Division of Securities and Retail Franchising of the Virginia State Corporation Commission.

"Federal covered advisor" means any person who is registered or required to be registered under § 203 of the Investment Advisers Act of 1940 as an "investment adviser."

"FINRA" means the Financial Industry Regulatory Authority, Inc. or any of its predecessors.

"IARD" means the Investment Advisor Registration Depository operated by FINRA as the central licensing and registration system for the United States securities industry and its regulators.

"Investment Advisers Act of 1940" (15 USC § 80b-1 et seq.) means the federal statute of that name as now or hereafter amended.

Notwithstanding the definition in § 13.1-501 of the Act, "investment advisor representative" as applied to a federal covered advisor only includes an individual who has a "place of business" (as that term is defined in rules or regulations promulgated by the SEC) in this Commonwealth and who either:

1. Is an "investment advisor representative" as that term is defined in rules or regulations promulgated by the SEC; or

2. a. Is not a "supervised person" as that term is defined in the Investment Advisers Act of 1940; and

b. Solicits, offers or negotiates for the sale of or sells investment advisory services on behalf of a federal covered advisor.

"Investment Company Act of 1940" (15 USC § 80a-1 et seq.) means the federal statute of that name as now or hereafter amended.

"NASAA" means the North American Securities Administrators Association, Inc.

"Notice" or "notice filing" means, with respect to a federal covered advisor or federal covered security, all information required by the regulations and forms prescribed by the commission and any required fee.

"Qualified investment advisor representative" means a person who possesses the requisite skill, knowledge, and experience to be designated to supervise other investment advisor representatives. A qualified investment advisor representative shall comply with the examination or qualification requirements pursuant to 21VAC5-80-130.

"Registrant" means an applicant for whom a registration or registration statement has been granted or declared effective by the commission.

"SEC" means the United States Securities and Exchange Commission.

"Securities Act of 1933" (15 USC § 77a et seq.) means the federal statute of that name as now or hereafter amended.

"Securities Exchange Act of 1934" (15 USC § 78a et seq.) means the federal statute of that name as now or hereafter amended.

"Solicitation" means an offer to one or more persons by any of the following means or as a result of contact initiated through any of these means:

1. Television, radio, or any broadcast medium;

2. Newspaper, magazine, periodical, or any other publication of general circulation;

3. Poster, billboard, Internet posting, or other communication posted for the general public;

4. Brochure, flier, handbill, or similar communication, unless the offeror has a substantial preexisting business relationship or close family or personal relationship with each of the offerees;

5. Seminar or group meeting, unless the offeror has a substantial preexisting business relationship or close family or personal relationship with each of the offerees; or

6. Telephone, facsimile, mail, delivery service, or electronic communication, unless the offeror has a substantial preexisting business relationship or close family or personal relationship with each of the offerees.

Statutory Authority

§§ 12.1-13 and 13.1-523 of the Code of Virginia.

Historical Notes

Derived from Rule 103, Case No. SEC810005, eff. July 1, 1981; amended, Virginia Register Volume 11, Issue 21, eff. July 1, 1995; Volume 13, Issue 25, eff. September 1, 1997; Volume 14, Issue 22, eff. July 1, 1998; Volume 15, Issue 22, eff. July 1, 1999; Volume 23, Issue 23, eff. July 1, 2007; Volume 25, Issue 22, eff. July 1, 2009; Volume 26, Issue 22, eff. July 1, 2010; Volume 28, Issue 2, eff. September 9, 2011; Volume 29, Issue 20, eff. June 3, 2013.

FORMS (21VAC5-10).

Broker-Dealer and Agent Forms

Form BD, Uniform Application for Broker-Dealer Registration (rev. 1/2008)

Form BDW, Uniform Notice of Termination or Withdrawal of Registration as a Broker-Dealer (rev. 4/2007)

Form S.A. 2, Application for Renewal of a Broker-Dealer's Registration (rev. 10/2017)

Form S.A. 11, Broker-Dealer's Surety Bond (rev. 7/1999)

Form S.D.4, Application for Renewal of Registration as an Agent of an Issuer (2017)

Form S.D.4.A, Agents to be Renewed - Exhibit I (rev. 1974)

Form S.D.4.B, Agents to be Canceled (Records Clear) - Exhibit II (rev. 1974)

Form S.D.4.C, Agents to be Canceled (Without clear Records) - Exhibit III (rev. 1974)

Rev. Form U4, Uniform Application for Securities Industry Registration or Transfer (rev. 5/2009)

Rev. Form U5, Uniform Termination Notice for Securities Industry Registration (rev. 5/2009)

Investment Advisor and Investment Advisor Representative Forms

Form ADV, Uniform Application for Registration of Investment Registration and Report by Exempt Reporting Advisers

Part IA, SEC 1707 (7/2017)

Part IB, paper version (rev. 10/2012)

Part 2, Uniform Requirements for the Investment Adviser Brochure and Brochure Supplements (undated)

Form ADV-W - Notice of Withdrawal from Registration as an Investment Advisor (rev. 11/2010)

Form S.A. 3, Affidavit for Waiver of Examination (undated, filed 10/2017)

Form S.A. 10, Investment Advisor's Surety Bond Form (rev. 10/2017)

Form S.A. 15, Investment Advisor Representative Multiple Employment Agreement (eff. 7/2007)

Form S.A. 16, Agent Multiple Employment Agreement (eff. 7/2007)

Rev. Form U4, Uniform Application for Securities Industry Registration or Transfer (rev. 5/2009)

Rev. Form U5, Uniform Termination Notice for Securities Industry Registration (rev. 5/2009)

Securities Registration and Notice Filing Forms

Form U–1, Uniform Application to Register Securities (undated, filed 10/2017)

Form U–2, Uniform Consent to Service of Process (rev. 6/2016)

Form U–2A, Uniform Form of Corporate Resolution (rev. 6/2016)

Form S.A. 4, Registration by Notification - Original Issue (rev. 11/1996)

Form S.A. 5, Registration by Notification - Non-Issuer Distribution (rev. 11/1996)

Form S.A. 6, Registration by Notification - Non-Issuer Distribution "Secondary Trading" (1989)

Form S.A. 8, Registration by Qualification (rev. 7/1991)

Form S.A. 12, Escrow Agreement (1971)

Form S.A. 13, Impounding Agreement (rev. 7/1999)

Form VA–1, Parts 1 and 2, Notice of Limited Offering of Securities (rev. 11/1996)

Form NF, Uniform Investment Company Notice Filing (4/1997)

Website addresses provided in the Virginia Administrative Code to documents incorporated by reference are for the reader's convenience only, may not necessarily be active or current, and should not be relied upon. To ensure the information incorporated by reference is accurate, the reader is encouraged to use the source document described in the regulation.

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