Securities

You may submit necessary documents to us at the following:

Mailing Address

NC Department of the Secretary of State
Securities Division
PO Box 29622
Raleigh, NC 27626-0622

Physical Address (for overnight deliveries)

NC Department of the Secretary of State
Securities Division
2 South Salisbury Street
Raleigh, NC 27601

919-814-5400
800-688-4507
[email protected]

• The North Carolina Securities Act, and
• The North Carolina Investment Advisers Act

The North Carolina Securities Act and the North Carolina Administrative Code govern the securities offers, sales, and purchases in North Carolina.

The U.S. Securities and Exchange Commission enforces federal securities laws and regulations.

Securities Dealer – Form BD
Securities Salesperson – Form U-4
Investment Adviser – Form ADV Part I & 2
Investment Adviser Representative – Form U-4

To register, use the CRD and the IARD registration systems.

Securities offering – Forms U-1, U-2 and U-2A (for corporate issuer)

See N.C.G.S. §§ 78A-26, -27 & -28

North American Securities Administrators Association (NASAA)

Small Company Offering Registration (SCOR) – Forms U-7, U-1, U-2 and U-2A (for corporate issuer)

See N.C.G.S. § 78A-27
See the NASAA website.

Notice filing for a mutual fund – Form NF

See N.C.G.S. § 78A-31(a)

See the NASAA website.

Rule 506 transaction notice filing – Form D

State filing requirements for Issuers Relying on the Securities Act of 1933, Regulation D, Rule 506

See requirements at 18 NCAC 06A.1211

See the Securities and Exchange Commission (SEC) website.

@* Removed Ticket 8991 RK 10/17/18 See NC Securities Division’s Informational Bulletin.*@ Electronic filing available at US Electronic Filing Depository

Limited offering subject to Rule .1205(b)

See requirements and schedule at 18 NCAC 06A.1205(b)

Form U-2 (and Form U-2A, for corporate issuer) -- NASAA website

Exempt not-for-profit offering -- Schedule required by Rule.1209(d), plus Form U-2 (and Form U-2A, for corporate issuer)

See schedule at 18 NCAC 06A.1209(d)

Form U-2 (and Form U-2A, for corporate issuer) – NASAA website

• Registered public offering of securities
  • $2,000.00
  • On initial application
• Notice filing for investment company securities
  • $1,725.00 plus 4276.00 for each series, fund or portfolio offered in North Carolina
  • On initial notice filing and then on annual renewal
• Amendment of investment company securities to increase offering size
  • $50.00
  • One-time fee for each amendment
• Notice filing for Rule 506 transaction
  • $350.00
  • One-time fee per issuer due within 15 days of first sale in NC
• Exemption notice for a limited offering subject to Rule .1205(b)
  • $150.00
  • One-time fee per offering due 10 days before the first sale in NC
• Exemption filing by not-for-profit issuer
  • No Charge
  • No fee, but filing is due 5 days before the first sale in NC
• Regulation A-Tier 2
  • No Charge
  • Requested courtesy filing of cover letter and Form U-2

To pay a registration fee for a security or an exemption filing fee, make your check payable to “The NC Department of the Secretary of State” and mail it to:

NC Department of the Secretary of State
Securities Division
PO Box 29622
Raleigh, NC 27626-0622

Notice filings for investment companies may be submitted electronically to the Securities Division. If you are interested in submitting the Form NF through BlueExpress, Contact the Securities Division at 919-814-5400 for more information.

The NC Securities Division requests a courtesy filing of a cover letter and Form U-2.

No. There is no charge to amend a Form D filing in North Carolina.

North Carolina has passed its own intrastate crowdfunding act, the PACES Act.(PDF) For more information, visit our Crowdfunding page.

You may submit necessary documents to us at the following:

Mailing Address

NC Department of the Secretary of State
Securities Division
PO Box 29622
Raleigh, NC 27626-0622

Physical Address (for overnight deliveries)

NC Department of the Secretary of State
Securities Division
2 South Salisbury Street
Raleigh, NC 27601

The North Carolina Securities Act and the North Carolina Administrative Code govern the securities industry in North Carolina.

In most cases, a dealer or salesman will need to register with the NC Securities Division in order to offer or sell securities in North Carolina. The Securities Division cannot offer legal advice so we highly encourage you to consult with a securities attorney for assistance. While we do not recommend any particular attorneys,the NC Bar Association offers a Lawyer Referral Service.

Apply for registration by submitting a Form BD and the accompanying $300.00 registration fee. Both are submitted through Web CRD. Additional documentation may be requested during the review process. A dealer must not do business in NC until its registration has been approved.

A Form U4 and the accompanying fee of $125.00 are submitted online through Web CRD. An applicant must have passed either the Series 63 exam or a combination of the Series 7 and Series 66 exams in order to be eligible for registration. Additional documentation may be requested during the review process. Salesmen must be registered with our office under a NC approved dealer in order to lawfully sell securities in our state. A salesman must not do business in NC until their registration has been approved.

Visit FINRA'S website for information on the various qualifying exams, including costs, formats and scheduling instructions.

Our standards for an exam waiver request are very high. Therefore many find it more expedient and cost effective to demonstrate their proficiency by sitting for the required exam. Anyone seeking an examination waiver should review the current examination topics, Uniform Securities Act 1956, NASAA Model Rules and NASAA Statements of Policy in order to prepare a written exam waiver request. This information can be found on the NASAA website. The exam waiver request must demonstrate to the Division that the applicant has a comparable understanding of the topics covered in an exam that a passing grade of the exam would demonstrate. The Division reviews each waiver request as time permits, and we highly encourage all applicants to sit for their requisite examinations.

No. N.C.G.S. § 78A-36(b) states that a salesman may NOT be registered with more than one dealer.

In situations where a dealer has no place of business in North Carolina, and does not effect more than 15 purchases or sales in North Carolina during any 12 consecutive months, registration may not be required. See N.C.G.S. § 78A-2 for more detail.

*Note: This provision would apply only to the registration requirements of dealers, NOT salesmen. If a dealer must be registered in NC, any affiliated salesmen doing business in NC must be registered in NC regardless of their individual number of purchases or sales.

Visit FINRA's website for links to Form BD for dealers and Form U4 for salesmen. These forms and their accompanying fees must be submitted through Web CRD.

All payments relating to dealer and salesman registration must be made through Web CRD.

No, the Securities Division does not have any special branch office registration requirements. However, note that any dealer doing business in NC that meets our statutory definition of 'dealer' must register with our office.

No, the Securities Division no longer requires dealers registered with the Division to submit annual audited financial statements unless specifically requested by the Division.

Ask the compliance officer of the broker-dealer firm with which you are employed to file a Form U-4 on your behalf. Once your securities registration has been approved, contact the NC Department of Insurance at 919-807-6800. and give them your CRD number and the effective date of your North Carolina securities registration. You must successfully pass the Series 63 exam to be a securities salesman.

In most cases, the person selling an investment must register to do so. This also applies to anyone paid to provide investment advice. In most cases, firms offering securities must register them. Broker-dealers, investment advisers and their representatives must register with the Securities Division or qualify to register with the U.S. Securities and Exchange Commission (SEC). They must provide full information about themselves, their firms and their products.

You may contact us at the following:

Mailing Address

NC Department of the Secretary of State
Securities Division
PO Box 29622
Raleigh, NC 27626-0622

Street Address

Courier/Overnight Delivery Address
NC Department of the Secretary of State
Securities Division
2 South Salisbury Street
Raleigh, NC 27601

Phone: 919-814-5400
Fax: 919-814-5596
Email: [email protected]

• Securities Dealer
  • $300.00
  • On initial registration and then on annual renewal before the CRD cut-off in mid-December of each year
• Securities Salesperson
  • $125.00
  • On initial registration and then on annual renewal before the CRD cut-off in mid-December of each year
• Investment Adviser
  • $300.00
  • On initial registration and then on annual renewal before the CRD cut-off in mid-December of each year
• Investment Adviser Representative
  • $75.00
  • On initial registration and then on annual renewal before the CRD cut-off in mid-December of each year
• Registered public offering of securities
  • $2,000.00
  • On initial application
• Notice filing for investment company securities
  • $1,725.00 plus $275.00 for each series, fund or portfolio offered in North Carolina
  • On initial notice filing and then on annual renewal
• Notice filing for Rule 506 transaction
  • $350.00
  • One-time fee per offering due within 15 days of first sale in NC
• Exemption notice for a limited offering subject to Rule .1205(b)
  • $150.00
  • One-time fee per offering due 10 days before the first sale in NC
• Amendment of mutual fund offering amount
  • $50.00
  • One-time fee for each amendment to increase offering amount
• Exemption filing by not-for-profit issuer
  • No Charge
  • No fee, but filing is due 5 days before the first sale in NC

To register, use the CRD and the IARD registration systems.

See N.C.G.S. §§ 78A-26, -27 & -28

North American Securities Administrators Association (NASAA)

See N.C.G.S. § 78A-27
See the NASAA website.

See N.C.G.S. § 78A-31(a)
See the NASAA website.

See requirements at 18 NCAC 06A.1211(PDF)
See the Securities and Exchange Commission (SEC)(PDF) website.
Electronic filing available at US Electronic Filing Depository

See requirements and schedule at 18 NCAC 06A.1205(b) (PDF)
Form U-2 (and Form U-2A, for corporate issuer) -- NASAA website

See schedule at 18 NCAC 06A.1209(d)(PDF)
Form U-2 (and Form U-2A, for corporate issuer) – NASAA website

To pay a registration fee for a security or an exemption filing fee, make your check payable to “The NC Department of the Secretary of State” and mail it to:

NC Department of the Secretary of State
Securities Division
PO Box 29622
Raleigh, NC 27626-0622

For all other payments, follow the instructions on the CRD and IARD websites.

No. A securities salesman may register with only one firm at a time.

It depends. A representative may register with more than one firm if the firms are under common ownership or control, or the representative is acting as a 'solicitor' for more than one firm. A 'solicitor' refers to an individual who offers or sells investment advisory services.

Ask the compliance officer of the broker-dealer firm with which you are employed to file a Form U-4 on your behalf. Once your securities registration has been approved, contact the NC Department of Insurance at 919-814-5596. and give them your CRD number and the effective date of your North Carolina securities registration. You must successfully pass the Series 63 exam to be a securities salesman.

NC Securities Act.

NC Investment Advisers Act.

rules supplementing both acts.

The U.S. Securities and Exchange Commission (SEC) enforces federal securities laws and regulations.

You may submit necessary documents to us at the following:

Mailing Address

NC Department of the Secretary of State
Securities Division
PO Box 29622
Raleigh, NC 27626-0622

Physical Address (for overnight deliveries)

NC Department of the Secretary of State
Securities Division
2 South Salisbury Street
Raleigh, NC 27601

919-814-5400
800-688-4507
[email protected]

• The North Carolina Securities Act, and
• The North Carolina Investment Advisers Act

The North Carolina Securities Act and the North Carolina Administrative Code govern the securities offers, sales, and purchases in North Carolina.

The U.S. Securities and Exchange Commission enforces federal securities laws and regulations.

Securities Dealer – Form BD
Securities Salesperson – Form U-4
Investment Adviser – Form ADV Part I & 2
Investment Adviser Representative – Form U-4

To register, use the CRD and the IARD registration systems.

Securities offering – Forms U-1, U-2 and U-2A (for corporate issuer)

See N.C.G.S. §§ 78A-26, -27 & -28

North American Securities Administrators Association (NASAA)

Small Company Offering Registration (SCOR) – Forms U-7, U-1, U-2 and U-2A (for corporate issuer)

See N.C.G.S. § 78A-27
See the NASAA website.

Notice filing for a mutual fund – Form NF

See N.C.G.S. § 78A-31(a)

See the NASAA website.

Rule 506 transaction notice filing – Form D

State filing requirements for Issuers Relying on the Securities Act of 1933, Regulation D, Rule 506

See requirements at 18 NCAC 06A.1211

See the Securities and Exchange Commission (SEC) website.

@* Removed Ticket 8991 RK 10/17/18 See NC Securities Division’s Informational Bulletin.*@ Electronic filing available at US Electronic Filing Depository

Limited offering subject to Rule .1205(b)

See requirements and schedule at 18 NCAC 06A.1205(b)

Form U-2 (and Form U-2A, for corporate issuer) -- NASAA website

Exempt not-for-profit offering -- Schedule required by Rule.1209(d), plus Form U-2 (and Form U-2A, for corporate issuer)

See schedule at 18 NCAC 06A.1209(d)

Form U-2 (and Form U-2A, for corporate issuer) – NASAA website

• Registered public offering of securities
  • $2,000.00
  • On initial application
• Notice filing for investment company securities
  • $1,725.00 plus 4276.00 for each series, fund or portfolio offered in North Carolina
  • On initial notice filing and then on annual renewal
• Amendment of investment company securities to increase offering size
  • $50.00
  • One-time fee for each amendment
• Notice filing for Rule 506 transaction
  • $350.00
  • One-time fee per issuer due within 15 days of first sale in NC
• Exemption notice for a limited offering subject to Rule .1205(b)
  • $150.00
  • One-time fee per offering due 10 days before the first sale in NC
• Exemption filing by not-for-profit issuer
  • No Charge
  • No fee, but filing is due 5 days before the first sale in NC
• Regulation A-Tier 2
  • No Charge
  • Requested courtesy filing of cover letter and Form U-2

To pay a registration fee for a security or an exemption filing fee, make your check payable to “The NC Department of the Secretary of State” and mail it to:

NC Department of the Secretary of State
Securities Division
PO Box 29622
Raleigh, NC 27626-0622

Notice filings for investment companies may be submitted electronically to the Securities Division. If you are interested in submitting the Form NF through BlueExpress, Contact the Securities Division at 919-814-5400 for more information.

The NC Securities Division requests a courtesy filing of a cover letter and Form U-2.

No. There is no charge to amend a Form D filing in North Carolina.

North Carolina has passed its own intrastate crowdfunding act, the PACES Act.(PDF) For more information, visit our Crowdfunding page.

We have a Form that requests the information we find the most helpful in conducting a securities investigation. We recommend you use this Form. It is available on our website. You may file your complaint by mail, fax, or email.

It depends. The Securities Division does not have the authority to order the return of lost money to you. Only a court can do that. Sometimes a court names a receiver to find and liquidate a defendant’s assets and return the money to victims on a proportional basis. Sometimes we find that all of the stolen money has been spent, so there is no money to be returned. Sometimes the Division enters into settlement agreements whereby the party agrees to return money to investors. It is important to note, however, that the securities laws give you the right to sue for the damages you suffer from any violation of those laws.

No. The Division does not have the authority to represent you individually in a civil suit. Any action the Division takes is on behalf of all North Carolinians. As an investor, you may sue anyone who defrauds you but you must retain your own attorney. The Division does not recommend any particular lawyer; however, you should find a licensed attorney who knows securities law. The North Carolina Bar Association's Lawyer Referral Service may help you find a qualified attorney.

In general, you have two years to file suit based on either the security or the salesperson being unregistered as of the date of sale or contract of sale. For fraud violations, you have three years from the date of discovery of the fraud, but no more than five years after the sale or contract of sale, unless the salesperson commits fraud or deception in order to conceal the fraud or in order to persuade you not to file a lawsuit. In this latter case you have three years from the date you discover the fraud or deception.

Each case is different but our process is the same. Within ten business days of receipt, each new complaint goes to our Case Review Committee. Our senior management, enforcement attorneys and investigators sit on this committee. They decide if they need more information, whether the Division has jurisdiction, or whether another agency might better respond to the complaint. If the Committee takes the case, it assigns an investigator and attorney to work the case. This stage takes time. Securities law is complex. We often must subpoena bank records and other financial records and pore over them to see what the subject did with investor money. Some cases take weeks, some months and others a year or more to get to the point of charging a suspect with a crime. The case then enters the judicial system and is subject to the court’s calendar. It is also important to remember that an investigation by the Division can result in the conclusion that no violation of the securities laws has occurred.

You may contact us at the following:

Mailing Address

NC Department of the Secretary of State
Securities Division
PO Box 29622
Raleigh, NC 27626-0622

Street Address

Courier/Overnight Delivery Address
NC Department of the Secretary of State
Securities Division
2 South Salisbury Street
Raleigh, NC 27601

Phone: 919-814-5400
Fax: 919-814-5596
Email: [email protected]

There is no single definition of the term “security.' Generally, a “security” is either a debt or ownership interest in some kind of business or venture. The investor makes an investment of funds or of something of value in order to get a profit generated by the managerial efforts of the promoter. Other than giving money to help fund the venture, the buyer plays no active role in the management of the business or venture.

The most common types of securities are stocks and bonds. However, securities can include:

• Certain certificates of deposit (CDs)
• Promissory notes
• Life settlement contracts (viaticals)
• Interests in a business involved in the renovation and sale of distressed real estate property
• Interests in a business involved with energy or technology development
• Interests in a business involved with precious metals or foreign currencies

The list of products that are securities continues to grow as issuers become more creative. Although there are exceptions, you are likely buying a security if your only role in the enterprise is to invest money.

In general, a security is only worth what you can sell it for. However, for your certificate to have significant value, the company issuing it should still be in existence. The easiest way to determine if it has value is to ask a broker, a stock certificate company or a securities attorney to research the matter for you. These individuals may charge a fee to conduct this research. If you wish to do the research yourself, you should contact the agency responsible for corporate records filings in the state where you think the company is or was organized. For companies organized in North Carolina, contact the Business Registration Division at 919-814-5400. Additional information is available on the SEC’s website.

It is important to know what securities are because federal and state laws give investors in securities certain legal rights. These rights include disclosure of important information by persons trying to sell securities and the right to bring a lawsuit based on the violation of a securities law.

Financial criminals are some of the smartest and most persuasive people you will ever meet. The “successful” con artist is a marketing expert who exploits your financial fears or desires. To avoid becoming a victim, look for these pressure tactics:

• Promises of Wealth – The salesperson “guarantees” high returns in a short period of time with “little or no risk.”
• Trappings of Success – The salesperson projects the image of success or offers “testimonials” proving his or her track record.
• The “Lemming” Effect – The salesperson tells you that others are investing and you should too or risk missing a good deal.
• Favors – The salesperson gives you something (like a free meal or a discount) hoping you will feel you need to give your money in return.
• Act Now – The salesperson wants you to “act fast” because the deal is only for a limited time.

It is OK to say “NO” to an unsolicited sales pitch. Remember, if an investment sounds too good to be true, it probably is.

In a Ponzi scheme, the promoter uses money from later investors to pay fake returns to earlier investors. See our brochure entitled “Ponzi Schemes (PDF).”

Although there are others, the main federal laws affecting the offer, sale and purchase of securities are:

• The Securities Act of 1933
• The Securities Exchange Act of 1934
• The Investment Advisers Act of 1940, and
• The Investment Company Act of 1940

The U.S. Securities and Exchange Commission (SEC) enforces these laws. More information is available at the SEC’s website.

The main state laws affecting the offer, sale and purchase of securities are:

• The North Carolina Securities Act, and
• The North Carolina Investment Advisers Act

The Securities Division of the North Carolina Department of the Secretary of State enforces these laws. More information is available on the Division’s website.

The Acts help you because they:

• Give you legal rights as an investor
• Regulate who gets to be a broker-dealer or investment adviser
• Regulate the conduct of broker-dealers and investment advisers
• Permit the Securities Division to investigate allegations of misconduct by broker-dealers and investment advisers and by unregistered persons who may be selling unregistered securities

The Acts give you the right to:

• Ask for and receive information from a firm about the work history and background of the person handling your account, as well as information about the firm itself
• Receive complete information about the risks, obligations, and costs of any investment before investing
• Receive recommendations consistent with your financial needs and investment objectives
• Receive a copy of all completed account forms and agreements
• Receive account statements that are accurate and understandable
• Understand the terms and conditions of transactions you undertake
• Access your funds in a timely manner and receive information about any restrictions or limitations on access
• Discuss account problems with the branch manager or compliance department of the firm and receive prompt attention to and fair consideration of concerns
• Receive complete information about commissions, sales charges, maintenance or service charges, transaction or redemption fees, and penalties

You may also have a right to ask for repayment if you suffer damage from a violation of the Securities Act. Called a “right of rescission,” it only applies in certain circumstances. Those circumstances are set out in the Act. If you are eligible for the “right of rescission” you need to act promptly or you may lose this right.

Violators may face criminal penalties as well. Criminal penalties for violating the NC Securities Act. Criminal penalties for violating the NC Investment Advisers Act.

The Division regulates these types of persons engaged in the investment business:

• Broker-dealers (BDs), stockbrokers and broker-dealer representatives,
• Investment advisers and investment adviser representatives, and
• Any unlicensed person selling securities

The Division may regulate any of these people or businesses if they:

• Are present in North Carolina and offer or sell securities to persons inside North Carolina
• Are present in North Carolina and offer or sell securities to persons outside North Carolina, or
• Are present in another state but offer or sell securities to persons inside North Carolina

These professionals buy and sell securities to or for their clients. They charge fees, commissions or markups for each trade they make to or for a client. They are in the business of buying or selling securities either for their own investment accounts or for their clients. Brokers are salespeople.

With regard to the offer, sale or purchase of a security, your broker can only recommend investments that are suitable for you personally. Suitability relates to your individual needs, goals, and degree of risk you are willing to take. These suitability rules do not apply if you direct your broker to make a trade that he or she did not recommend.

These professionals must register with the SEC or each state in which they wish to do business. They are also regulated by the Financial Industry Regulatory Authority (FINRA). FINRA keeps records on all its members and registered representatives nationwide. The Division can access these records. We can confirm a person’s or business’s registration status in our state. We can tell you if a person or business has a disciplinary record. Call us to check out the broker before buying any security.

These professionals provide advisory services, generally consisting of advice about buying, selling or holding securities. They can help you plan your financial future and make adjustments as your needs change or as the market changes. They also provide investment account management services. These professionals may charge a flat fee for their services, a fee on a percentage of your assets they manage, or a combination of both. They provide expertise. Unless authorized to do so, they cannot buy or sell securities for their clients.

The law requires an investment adviser to deal honestly with you and put your interests ahead of the adviser’s own interests. Your adviser must disclose real and potential conflicts of interest to you up front. Your adviser cannot lie to you, deceive you or fail to tell you important facts that might affect your decision to invest.

Depending on the value of the assets they manage, investment advisers must register with the SEC or with each state in which they do business. The Division can confirm the adviser’s registration status in our state. We can tell you if an adviser has a disciplinary record. Call us to check out the adviser before you place any assets with the adviser.

No. But, even if a person is a professional in another field, the Division may regulate:

• Any person or business engaged in the offer, sale or purchase of securities
• Any person or business providing investment advice for which they receive compensation
• Any financial product satisfying the definition of a security

• NC Securities Act.
• NC Investment Advisers Act.
• rules supplementing both acts.

The U.S. Securities and Exchange Commission (SEC) enforces federal securities laws and regulations.

It is important to know that all investments carry risk. While you may reap great financial reward, you may also lose your entire investment. Even worse, you may find yourself owing more money than you originally invested. There is no insurance protection against investment loss. Any guarantee that you will make a profit should be viewed with extreme skepticism. The ups and downs of the market make it impossible to carry out such guarantees. Remember: The greater the potential gain, the greater the potential risk. Also, if asked only for an investment of money, remember that both the investment and the person selling the investment are subject to regulation under the securities laws of the state, and these laws give you legal rights. Finally, remember: If an investment sounds too good to be true, it probably is.