Iowa Code

Iowa Code § 502.401 (2026)

Broker-dealer registration requirement and exemptions

✓ current as of July 2026

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1. Registration requirement. It is unlawful for a person to transact business in this state as a broker-dealer unless the person is registered under this chapter as a broker-dealer or is exempt from registration as a broker-dealer under subsection 2 or 4. 2. Exemptions from registration. The following persons are exempt from the registration requirement of subsection 1: a. A broker-dealer without a place of business in this state if its only transactions effected in this state are with any of the following: (1) The issuer of the securities involved in the transactions. (2) A broker-dealer registered as a broker-dealer under this chapter or not required to be registered as a broker-dealer under this chapter. (3) An institutional investor. (4) A nonaffiliated federal covered investment adviser with investments under management in excess of one hundred million dollars acting for the account of others pursuant to discretionary authority in a signed record. (5) A bona fide preexisting customer whose principal place of residence is not in this state and the broker-dealer is registered as a broker-dealer under the Securities Exchange Act of 1934 or not required to be registered under the Securities Exchange Act of 1934 and is registered under the securities Act of the state in which the customer maintains a principal place of residence. (6) A bona fide preexisting customer whose principal place of residence is in this state but was not present in this state when the customer relationship was established, if all of the following apply: (a) The broker-dealer is registered under the Securities Exchange Act of 1934 or not required to be registered under the Securities Exchange Act of 1934 and is registered under the securities laws of the state in which the customer relationship was established and where the customer had maintained a principal place of residence. (b) Within forty-five days after the customer’s first transaction in this state, the broker-dealer files an application for registration as a broker-dealer in this state and a further transaction is not effected more than seventy-five days after the date on which the application is filed, or, if earlier, the date on which the administrator notifies the broker-dealer that the administrator has denied the application for registration or has stayed the pendency of the application for good cause. (7) Not more than three customers in this state during the previous twelve months, in addition to those customers specified in this paragraph “a”, if the broker-dealer is registered under the Securities Exchange Act of 1934 or not required to be registered under the Securities Exchange Act of 1934 and is registered under the securities Act of the state in which the broker-dealer has its principal place of business. (8) Any other person exempted by rule adopted or order issued under this chapter. b. A person that deals solely in United States government securities and is supervised as a dealer in government securities by the board of governors of the federal reserve system, the comptroller of the currency, the federal deposit insurance corporation, or the office of thrift supervision. 3. Limits on employment or association. It is unlawful for a broker-dealer, or for an issuer engaged in offering, offering to purchase, purchasing, or selling securities in this state, directly or indirectly, to employ or associate with an individual to engage in an\n\nTue Dec 09 22:06:24 2025 Iowa Code 2026, Chapter 502 (62, 1) §502.401, UNIFORM SECURITIES ACT (BLUE SKY LAW) 32\n\nactivity related to securities transactions in this state if the registration of the individual is suspended or revoked or the individual is barred from employment or association with a broker-dealer, an issuer, an investment adviser, or a federal covered investment adviser by an order of the administrator under this chapter, the securities and exchange commission, or a self-regulatory organization. A broker-dealer or issuer does not violate this subsection if the broker-dealer or issuer did not know, and in the exercise of reasonable care could not have known, of the suspension, revocation, or bar. Upon request from a broker-dealer or issuer and for good cause, an order under this chapter may modify or waive, in whole or in part, the application of the prohibitions of this subsection to the broker-dealer or issuer. 4. Foreign transactions. A rule adopted or order issued under this chapter may permit any of the following: a. A broker-dealer that is registered in Canada or other foreign jurisdiction and that does not have a place of business in this state to effect transactions in securities with or for, or attempt to effect the purchase or sale of any securities by, any of the following: (1) An individual from Canada or other foreign jurisdiction who is temporarily present in this state and with whom the broker-dealer had a bona fide customer relationship before the individual entered the United States. (2) An individual from Canada or other foreign jurisdiction who is present in this state and whose transactions are in a self-directed tax advantaged retirement plan of which the individual is the holder or contributor in that foreign jurisdiction. (3) An individual who is present in this state, with whom the broker-dealer customer relationship arose while the individual was temporarily or permanently residing in Canada or the other foreign jurisdiction. b. An agent who represents a broker-dealer that is exempt under this subsection to effect transactions in securities or attempt to effect the purchase or sale of securities in this state as permitted for a broker-dealer described in paragraph “a”. [C31, 35, §8581-c17; C39, §8581.21; C46, 50, 54, 58, 62, 66, 71, 73, 75, §502.21; C77, 79, 81, §502.401] 2004 Acts, ch 1161, §26, 68 Referred to in §502.202, 502.402, 502.407, 502.509, 502.604, 502.608, 502.610

Notes of Decisions

Cited in 17 cases, 1976–2008 · leading case: State Ex Rel. Goettsch v. Diacide Distributors, Inc., 561 N.W.2d 369 (Iowa 1997).

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State Ex Rel. Goettsch v. Diacide Distributors, Inc., 561 N.W.2d 369 (Iowa 1997). · cites it 62× “See Iowa Code § 502.401 . Section 502.401 provides: It is unlawful for any person, in connection with the offer to sell, offer to purchase, sale or purchase of any security in this state, directly or indirectly: 1.”

McCracken v. Edward D. Jones & Co., 445 N.W.2d 375 (Iowa Ct. App. 1989). · cites it 10× “Iowa Code section 502.401, the relevant section of the Iowa Securities Act (blue sky law), provides in pertinent part: It is unlawful for any person, in connection with the offer to sell, offer to purchase, sale or purchase of any security in this State, directly or indirectly:…”

State v. Kraklio, 560 N.W.2d 16 (Iowa 1997). · cites it 20× “Iowa Code § 502.401 . The threshold question is whether Kraklio's transactions with the undercover agents involved a security.”

Whalen v. Connelly, 545 N.W.2d 284 (Iowa 1996). · cites it 6× “Iowa Code section 502.401 (1993) states “it is unlawful for any person, in connection with the offer to sell, offer to purchase, sale or purchase of any security in this state, directly or indirectly” to make fraudulent misrepresentations.”

Watts v. Des Moines Register & Tribune, 525 F. Supp. 1311 (S.D. Iowa 1981). · cites it 6× “COUNTS TWO AND THREE Both the individual and corporate defendants move for summary judgment as to Counts 2 and 3 of the amended complaint, wherein plaintiffs rely upon Section 10(b) of the 1934 Securities and Exchange Act and Rule 10b-5 promulgated thereunder, as well as the…”

State v. Tyler, 512 N.W.2d 552 (Iowa 1994). · cites it 10× “" Iowa Code § 502.401 (2). A legal opinion is normally insufficient to establish this element of the offense.”

State Ex Rel. Goettsch v. Diacide Distributors, Inc., 596 N.W.2d 532 (Iowa 1999). · cites it 6× “503(1) may be utilized by the State to impose secondary liability on persons who aid and abet securities fraud; (2) that the remedies established in section 502.604(2) (order of rescission, restitution, or disgorgement) may be utilized by the State against aiders and abettors as…”

Martino-Catt v. EI duPont Nemours & Co., 317 F. Supp. 2d 914 (S.D. Iowa 2004). · cites it 14× “Section 502.401 of the Iowa Uniform Securities Act Although Plaintiff, in her resistance to Defendants’ motion, alleges that Defendants violated § 502.”

Catholic Order of Foresters v. U.S. Bancorp Piper Jaffray, Inc., 337 F. Supp. 2d 1148 (N.D. Iowa 2004). · cites it 4× “stland Defendants are the following: violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder relating to the security for the bonds in Count 27; "control person” liability pursuant to Sections 12 and 15 of the Securities Act of…”

State Ex Rel. Miller v. Pace, 677 N.W.2d 761 (Iowa 2004). · cites it 3× “§§ 502.401(2), 523B.12. Based on the same representations and omissions, the trial court concluded Pace’s conduct constituted an “unfair practice” and “deception” under the consumer fraud provision of chapter 714.”

Kramersmeier v. R.G. Dickinson & Co., 440 N.W.2d 873 (Iowa 1989). · cites it 6× “Failure to disclose this material fact, plaintiffs assert, constituted negligence and breach of warranty, as well as a prohibited fraudulent practice under section 502.401 of the Iowa Uniform Securities Act.”

Dunning v. Bush, 536 F.3d 879 (8th Cir. 2008). “The elements needed to prevail on an action for securities fraud under Iowa Code § 502.401 (Iowa’s counterpart to Rule 10b-5) are essentially the same as those required to prevail on a fraud claim.”

Show all 17 citing cases →

— Iowa Code § 502.401(2) — 2 cases

McCracken v. Edward D. Jones & Co., 445 N.W.2d 375 (Iowa Ct. App. 1989). “Iowa Code section 502.401, the relevant section of the Iowa Securities Act (blue sky law), provides in pertinent part: It is unlawful for any person, in connection with the offer to sell, offer to purchase, sale or purchase of any security in this State, directly or indirectly:…”

State Ex Rel. Miller v. Pace, 677 N.W.2d 761 (Iowa 2004). “§§ 502.401(2), 523B.12. Based on the same representations and omissions, the trial court concluded Pace’s conduct constituted an “unfair practice” and “deception” under the consumer fraud provision of chapter 714.”

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