North Carolina Allows Dual Registration of Broker-Dealer Salespersons

Many industry participants have one or more affiliated broker-dealers that are each registered with the Securities and Exchange Commission, are members of the Financial Industry Regulatory Authority (FINRA), and are registered with the various states under their securities (Blue Sky) laws.

Generally, an individual is required to be registered as an “agent” or “salesperson,” as the case may be, in any state where such individual “represents a broker-dealer in effecting or attempting to effect purchases or sales of securities.” This generally includes states where the individual is physically located and states where the individual’s customers are physically located.

Industry participants may seek to register one or more individuals as agents/salespersons with multiple affiliated broker-dealers across multiple states to the extent that such individuals are “effecting or attempting to effect purchases or sales of securities” on behalf of each of those broker-dealers. While this “dual registration” is generally permitted by FINRA and many states, especially when the broker-dealers are affiliated with each other, a number of states impose restrictions on such dual registration, such as requiring that broker-dealers submit additional paperwork and representations before the state approves the dual registration of such individual applicants.

That said, for many years, North Carolina has been the most restrictive state in respect of dual registration. Until recently, North Carolina’s Blue Sky statute specifically prohibited the registration of a “salesman” with more than one “dealer” (the terms used in the statute) whether or not the broker-dealers were affiliated. In addition, unlike other states, North Carolina would not grant waivers from such prohibition in any circumstances due to the language of its statute. The result of this absolute prohibition on dual registration was that industry participants who generally employ dual registration as part of their business had to put in place additional procedures to ensure that they did not run afoul of the prohibition against dual registration of salespersons under the North Carolina Blue Sky law.

However, North Carolina recently amended its Blue Sky statute — effective October 1, 2025 — to permit/allow individuals to become registered as salespersons with more than one broker-dealer if such broker-dealers are under “common ownership or control.” North Carolina will not require any additional paperwork for individuals to register with multiple broker-dealers other than checking the “AG” box (broker-dealer agent) for North Carolina in item 5 on the Form U-4 for both affiliated broker-dealers.

This is a significant, and positive, change for industry participants who seek to register individuals with multiple broker-dealers within their corporate structure (i.e., which broker-dealers are affiliated/under common control), as it allows such broker-dealers to conduct business in respect of such individuals in North Carolina in the same manner as they conduct business in other states.