Registrations, Inspections, Compliance, and Examinations Section (RICE)
RICE Mission Statement
The Registration, Inspections, Compliance, and Examination (RICE) Section is a critical component of the Securities Division that serves to proactively protect investors through comprehensive application reviews and examinations of registrants. RICE focuses on the registration and regulation of broker-dealers and agents, investment advisers and investment adviser representatives, and exempt reporting advisers.
RICE Section Overview
RICE reviews all applications for registration of broker-dealers, agents, investment advisers, and investment adviser representatives and performs examinations and inspections of broker-dealers and investment advisers to ensure compliance with the requirements of the Massachusetts Uniform Securities Act and the corresponding Regulations. The goal of broker-dealer and investment adviser registration is to ensure that individuals and firms dealing with investors in the Commonwealth meet certain minimum standards of conduct, education, and financial solvency. All individuals or firms offering or selling securities or giving investment advice for compensation within the Commonwealth must be registered unless an exclusion is available.
Individuals must pass one or more comprehensive examinations before applying for registration. Firms must comply with specific record-keeping requirements and demonstrate minimum financial solvency. RICE reviews all applications to determine whether firms and individuals are qualified for registration after the evaluation of many additional factors, including any past disciplinary history or client complaints.
The following criteria, among others, are considered in determining whether to allow an application for registration:
- Professional certification or examination qualifications
- Criminal history
- Regulatory disciplinary history
- Financial solvency
- Evidence of past inequitable or fraudulent business practices in the financial services industry
RICE also conducts comprehensive inspections and examinations of state-registered investment advisers to determine compliance with state and federal securities laws and regulations and to ensure that these investment advisers meet the obligations they owe to their clients. These inspections and examinations are often conducted at the investment advisers offices and may be conducted either with prior notice or on an unannounced basis.
Furthermore, RICE also answers questions from the public regarding the registration status and disciplinary history of broker-dealers, agents, investment advisers, and investment adviser representatives and responds to inquiries concerning their activities.