Legal Memorandum: Broker-Dealer Licensing Requirements in SD

Issue: May an officer of an incorporated company be exempt from licensing requirements for sale of the company’s debenture bonds under South Dakota’s blue sky law?

Area of Law: Corporate & Securities
Keywords: Broker-dealer; Registration requirements; Blue sky laws
Jurisdiction: South Dakota 
Cited Cases: None
Cited Statutes: S.D. Codified Laws § 47-31B-401; S.D. Codified Laws § 47-31B-401(b)(1)(A)
Date: 07/01/2012

As a general matter, in order to lawfully transact business as a broker-dealer in South Dakota, a person must either register under South Dakota’s securities law or be exempt from registration.  S.D. Codified Laws § 47-31B-401.

One of the exemptions from registration includes “[a] broker-dealer without a place of business in [South Dakota] if its only transactions effected in [South Dakota] are with (A) The issuer of the securities involved in the transactions.…”  Id., § 47-31B-401(b)(1)(A).


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