Become An Approved Broker or Dealer

Treasurer Frerichs is the state’s Chief Investment Officer and Chief Banking Officer. The Office of the Illinois Treasurer (“Treasurer”) manages an investment portfolio of approximately $31 billion (as of December 2020).

To support this work, the Treasurer’s Office partners with qualified brokers and dealers to execute trades and facilitate transactions that help achieve strong returns using authorized investment instruments. If your brokerage firm seeks to do business with the Treasurer, you must first become an approved broker-dealer. The step-by-step process is also available as a PDF.

Who can become an approved broker or dealer?

  • Firms are evaluated based on
    • creditworthiness, and
    • financial significance in Illinois, which may include the location of the firm’s corporate office, the number of full-time employees, payroll size, and the firm’s overall economic presence in the state.
  • Eligible broker/dealers include “primary” dealers and regional dealers who qualify under SEC Rule 17 CFR § 15Cc3-1 (Net Capital Requirements for Brokers or Dealers).
  • In addition, any staff responsible for executing trades must be registered in the State of Illinois.
  • Note: The Treasurer seeks to accord preference to qualified broker/dealers that can demonstrate or attest that (1) greater than 50% of the ownership interest of the firm is held by minority, female, veteran, and/or disabled persons (“MWVD”), OR (2) greater than 75% of the firm’s senior managers are minority, female, veteran, and/or disabled persons. Visit the Equity, Diversity & Inclusion page for more info.
    • Firms Seeking MWVD Preference: Prior to completing the following steps, please complete and submit a Capabilities Questionnaire, Diversity Profile Form and one of the following: (1) MWVD State of Illinois Certification (issued through CMS), (2) Attestation Form: Claiming status as an MWVD-Owned or Managed Firm, or (3) Your State/Local Government MWVD Certification.
    • Submit documents to MWVD@illinoistreasurer.gov. Following submission, the MWVD liaison will contact you with further information.   

Follow this step-by-step process

Step 1: Review Investment Policy Statements and Complete Certification Form

Step 2: Complete a Counterparty Questionnaire

  • Complete the Counterparty Questionnaire to provide us with basic information on the firm, including key personnel, financial presence in Illinois, and ownership interests. This helps the Treasurer quickly and efficiently assess partnership opportunities.

Step 3: Complete a Diversity Profile Form

  • Fill out the Diversity Profile Form. The Treasurer conducts an annual survey in which business partners are required to disclose information about diversity within their ranks, as well as how their organizations promote diversity and inclusion. Note: If you are a firm seeking MWVD Preference, this step has been completed under Firms Seeking MWVD Preference.

Step 4: Submit the completed forms

What happens after you submit your documentation?

Step 1: Response from the Treasurer/Required Documentation

  • The Treasurer will review the submitted and pending qualification documents, and a specialist will follow up with further instructions. Please provide the following documents:
    1. Proof of registration in the State of Illinois;
    2. Proof of registration with the Securities and Exchange Commission (SEC);
    3. Audited financial statements or a published Statement of Condition;
    4. Information regarding insurance coverage, including a copy of the insurance policy that notes the type and limit of coverage, for customers in case of default or failure (e.g., SIPC, self-insurance, surety bonds, errors and omissions);
    5. A statement representing compliance with the SEC’s net capital adequacy guidelines, including compliance history, current status, applicable SEC requirements, and current net capital level; and
    6. Resumes for key traders.

Step 2: Financial Review by the Treasurer

  • All information may be subject to independent verification by the Treasurer. The Treasurer reserves the right to request additional information from the firm prior to acceptance as a counterparty qualified to do business. The internal due diligence process typically takes 6 to 8 weeks.

Step 3: Final Notification and Account Authorization Agreement

  • Upon completion of the internal review process, the firm will be notified and provided with a copy of the Account Authorization Agreement. This form must be signed, submitted, and filed with both parties before the firm can attempt to execute a trade.

 Step 4: Addition to the Approved Broker/Dealer List

  • The firm will then be added to the list of Approved Broker/Dealers. Periodic financial reviews are performed on all broker/dealers that are included on the Approved List.

Post-Approval

  • Please review the Broker/Dealer Guidance form. It is a guide to ensure that broker-dealers are well-positioned to assist the Treasurer with investment brokerage services.
  • Changes made to the status of a broker/dealer will be posted on the Treasurer’s website.
  • The Treasurer may conduct broker/dealer due diligence visits to verify background information, confirm compliance with our guidelines, view company operations, and discuss special company initiatives.
  • Broker-dealers that claim certification as a minority-, woman-, veteran-, or disability-owned and/or managed firm may be audited. If requested, firms must provide documentation to verify the claimed status (such as proof of veteran status or a disability verification letter).

For purposes of this process, definitions of “minority,” “female,” “veteran,” and “disabled person” are located in the Business Enterprise for Minorities, Females and Persons with Disabilities Act (30 ILCS 575) and Sections 45-57 (“Veterans”) of the Illinois Procurement Code (30 ILCS 500/45-57).


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