D.C. Mun. Regs. tit. 26, r. 26-B112

Current through Register Vol. 71, No. 49, December 6, 2024

Rule 26-B112 - SURETY BOND

112.1

Each agent of an issuer shall, as set forth in this section, post on the prescribed form, a surety bond issued by a corporate surety company licensed to do business in the District.

112.2

Each agent of an issuer licensed or applying for licensing under the Act shall post a surety bond in an amount of ten thousand dollars ($ 10,000).

112.3

The surety bond required by § 112 shall not apply for agents representing issuers having a net worth in excess of five hundred thousand dollars ($ 500,000).

112.4

Each issuer claiming exemption pursuant to § 112.3 shall file with and as a part of any agent application the following documents:

(a) A detailed original document of financial condition which discloses the nature and the amount of assets and liabilities; and

(b) The net worth of the issuer as of the date within thirty (30) days of the date on which the statement is filed.

112.5

The issuer shall attach to the statement an oath or affirmation that the statement is true and correct to the best of its knowledge and belief.

112.6

The oath or affirmation shall be made before a person duly authorized to administer the oath or affirmation.

112.7

If the issuer is a sole proprietorship, the oath or affirmation shall be made by the proprietor; if a partnership, by a general partner; if a corporation, by a duly authorized officer.

112.8

Upon a written request from the applicant or licensee, the Department may, when it is necessary or appropriate, in the public interest and consistent with the protection of investors, and for good cause shown, waive the bonding requirement.

112.9

The text of the surety bond form as required by § 112.1 shall read as follows:

SURETY BOND

That __ as Principal, __ a Corporation, incorporated under the laws of __ and licensed to do business in the District of Columbia are held and firmly bound to the Department of Insurance and Securities Regulation of the District of Columbia for the use and benefit of any persons damaged by any breach of this obligation in the sum of $ 10,000 for the payment of which sum we bind ourselves, or heirs, executors, administrators, successors and assigns, jointly and severally by these presents. The conditions of the bond are as follows:

(1) The above-mentioned principal has applied or will apply for a license as agent of an issuer, or is licensed as agent of an issuer under the provisions of Section 101 of the Act (D.C. Register at 47 DCR 7837);

(2) The above named principal is required to file a surety bond in accordance with the provisions of Section 203(g)(1)(A) of the Act (D.C. Register at 47 DCR 7847), and § 110.1;

(3) This bond is a continuous obligation and shall cover the full period or periods of licensing of the principal, including initial and renewal licensing;

(4) The surety shall not be obligated to this bond unless the principal fails to account for all money and securities coming into its possession for the benefit of investors, or fails to discharge all obligations imposed on it by the Act and the rules adopted thereunder;

(5) The liability of the surety for any one or more claims by any one or more persons shall not be cumulative and shall not exceed in the aggregate the sum of this bond;

(6) Any person or persons, including the Department, who have cause of action arising under the Act, or any provision of this bond, may bring suit on this bond;

(7) In the event that either the principal or the surety, or both, are served with notice of any suit on this bond, the person served with the notice shall immediately give written notice of the filing of the action to the Department of Insurance and Securities Regulation of the District of Columbia; and

(8) No suit may be maintained to enforce any liability on the bond unless brought within two years after the sale or other act upon which the liability is based.

D.C. Mun. Regs. tit. 26, r. 26-B112

Final Rulemaking published at 40 DCR 6732 (September 24, 1993); as amended by Emergency Rulemaking published at 48 DCR 1987 (March 2, 2001) [EXPIRED]; as amended by Final Rulemaking published at 48 DCR 4106 (May 11, 2001)