It is important to properly surrender a license that is no longer required by a company or an individual to effectively terminate the issuing regulator’s supervisory authority over the company or individual, as well as to avoid the regulator taking action for failing to timely renew the license. Here are a few key things to know about surrenders:
The surrender process
Most state licensing laws provide a process for surrendering a license, which typically entails a formal request to the regulator along with the return of the original license certificate, if issued. For licenses maintained on the NMLS, the surrender request should be submitted via the NMLS, and any items on the applicable surrender checklist should be provided to the regulator for processing. For other licenses, the surrender request should be submitted in writing and include any items required by statute, regulation, or the regulator’s website.
A surrender request is not always effective upon submission
Some regulators deem a license surrendered upon receipt of a surrender request. Often, though, the surrender must be accepted by the regulator before the company’s or individual’s status as a licensee ends. In the NMLS, acceptance of the surrender requires the regulator to update the license status to “Terminated – Surrendered/Cancelled.” In other instances, the regulator issues formal written confirmation that the surrender has been accepted. In any event, the company or individual should ensure that the surrender is accepted by the regulator before crossing the license off its license list.
Some reporting requirements may be applicable even after surrender
When a license is surrendered, the company or individual should track any reporting requirements that may continue to apply after the license is surrendered. For example, states that require an activity report for the calendar year may still require the report if there had been activity during the reporting period (even if the license has since been surrendered). To illustrate, if a report is due on March 30, 2020 for the period ending December 31, 2019, the report may still need to be submitted even if the license was surrendered on November 1, 2019. A company that has surrendered its license should confirm its final reporting obligations with the applicable regulator.
For assistance with preparing and submitting surrender requests, check in with APPROVED.