Agent Transfers, Snowbird Rules & Canadian Licenses
Covers the tri-party Form U5 notification rule upon agent termination, the Snowbird vacation exemption, client relocation grace periods, and Canadian limited registration.
- When a BD Agent transfers: Old BD, Agent, and New BD must ALL notify the Administrator promptly (Tri-Party Notification).
- Snowbird Exemption: An agent may service an existing customer who is temporarily vacationing in another state without registering there.
- Canadian BDs and agents may obtain limited registration to service Canadian citizens temporarily in the U.S. or Canadian RRSP/RRIF retirement plans.
When a registered agent terminates employment with a broker-dealer, prompt notification is legally required under Section 201(b). In an agent transfer, all three parties—the terminating broker-dealer (filing Form U5), the agent, and the new employing broker-dealer (filing Form U4)—must notify the Administrator promptly.
The Uniform Securities Act provides an important safe harbor known as the 'Snowbird Exemption.' If an existing client is temporarily present in another state (e.g. vacationing in Florida or skiing in Colorado), the agent and broker-dealer may execute transactions without registering in that temporary state.
If an existing client permanently moves to another state, the agent has a 30-day grace period to apply for registration in the new state, provided the broker-dealer is registered and the agent is in good standing.
Under NASAA model rules, Canadian broker-dealers and agents with no place of business in the state may obtain limited registration to service temporary Canadian visitors and Canadian self-directed retirement savings plans (RRSPs).
- If an IA transfers, the rules differ: For state IAs, both firm and IAR notify; for federal covered IAs, ONLY the IAR notifies the state.
- The Snowbird exemption applies ONLY to existing clients temporarily visiting; it does NOT allow soliciting new permanent residents.
An agent of a registered broker-dealer in Pennsylvania resigns from her current firm and immediately accepts an employment offer to become an agent at another Pennsylvania registered broker-dealer. Under the Uniform Securities Act, who is legally obligated to notify the state Administrator of this termination and transfer?