Services for an Investment Adviser Subject to SEC’s Switch Rule

There is a variety of services that RIA Compliance Consultants, Inc. (“RCC”) can provide to assist an investment adviser currently registered with the U.S. Securities and Exchange Commission (“SEC”) and subject to the SEC’s new “switch” rule.

For many investment advisers, the switch will coincide with filing the Form ADV Part 1 annual amendment. An investment adviser which exceeds the mid-sized threshold will not be required to switch; however, such an investment adviser will be required to file an amendment to the Form ADV Part 1A indicating its eligibility to remain SEC registered. An investment adviser switching from SEC to state registration will need to make sure that it has written supervisory procedures and code of ethics for a state registered adviser specifically referencing the governing state securities regulations rather than the Investment Advisers Act of 1940.

Since investment advisers may have different needs when it comes to the process of remaining registered with the SEC or switching registration from the SEC to state securities regulator(s), we have developed a variety of service packages as described below. Please note that Options R1 – R2 and Options S1 – S6 are for both existing and new clients of RCC, and Options S7 – S12 listed below are only available for existing clients of RCC that have previously purchased either a state specific or a customized compliance manual through RCC.

Remaining SEC Registration Options – Available for New & Existing Clients

Option 1: Remain SEC Registered

Contains the following services:

• Form ADV Part 1A – Prepare the Form ADV Part 1A other than Annual Amendment:
  • Indicate that the investment adviser is no longer eligible for registration with the SEC;
  • Update the assets under management reported in Part 1A, Item 5F; and
  • Update any new or revised Form ADV Part 1 Items identified in the SEC Final Rule Release IA-3221.

Option R2: Remain SEC Registered + Annual Renewals & Annual Amendment

Contains all services previously indicated under Option R1 plus the following additional services:

• Annual renewal process:
  • Provide outline of important date and follow-up reminders throughout renewal period;
  • Retrieve and send copy of CRD Rep Roster Report;
  • Provide IARD funding information;
  • Retrieve and send copy of initial and final renewal statement; and
  • Verify IARD renewal account properly funded in timely manner and provide specific reminder notices if funding not credited.
• Form ADV Annual Amendment:
  • Prepare the Form ADV Part 1 Annual Update filing through the IARD system;
  • Update Item 4E of Form ADV Part 2;
  • Upload the revised Form ADV Part 2 to the IARD system and submit the amended Form ADV Part 1 and Part 2 to through the IARD system.

Switching Options – Available for New & Existing Clients – RCC Did Not Draft Last WSP/COE

Option S1: Switch from SEC to State Registration (1 State)

Contains the following services:

• Form ADV Part 1A – Prepare the Form ADV Part 1A other than Annual Amendment:
  • Indicate that the investment adviser is no longer eligible for registration with the SEC;
  • Update the assets under management reported in Part 1A, Item 5F; and
  • Update any new or revised Form ADV Part 1 Items identified in the SEC Final Rule Release IA-3221.
• Form ADV Part 1B – Prepare the Form ADV Part 1B.
• Form ADV Part 2A – Prepare Revised Form ADV Part 2A:
  • Add appropriate disclosures to Form ADV Part 2A, Item 19.
• Form ADV Part 2B – Prepare Revised Form ADV Part 2B:
  • Update existing Form ADV Part 2B Supplemental Brochures for supervised persons, who do not have a “yes” answer on the Form U4, to add appropriate disclosures to Form ADV Part 2B, Item 7.
• IARD/Web CRD:
  • Provide guidance on the amount necessary to fund the IARD/Web CRD account.
  • Electronically submit (via the IARD system) the Form ADV Parts 1A, 1B and 2A.
• Misc. State Forms – Provide state specific forms required by the formal administrative rules of state securities regulator for investment adviser to complete.
• Cover Letter – Provide a sample cover letter for investment adviser to use to prepare additional documentation for submission to state securities regulator.
• Form ADV-W – Prepare and submit (via the IARD system) Form ADV-W fully terminating the investment adviser’s SEC registration and state notice filing status.

Option S2: Switch from SEC to State Registration (1 State) + State Specific, Self-Customized Template WSP/COE (Didn’t Previously Purchase Our WSP/COE)

Contains all services previously indicated under Option S1 plus the following additional services:

• Provide state specific, self-customized template written supervisory procedures/code of ethics (no customization by RCC).

Option S3: Switch from SEC to State Registration (1 State) + State Specific, Customized WSP/COE(Didn’t Previously Purchase Our WSP/COE)

Contains all services previously indicated under Option S1 plus the following additional services:

• Provide state specific, customized written supervisory procedures/code of ethics (includes up to 9 hours of drafting and consulting on WSP/COE).

Option S4: Switch from SEC to State Registration (1 State) + Annual Renewals & ADV Annual Amendment

Contains all services previously indicated under Option S1 plus the following additional services:

• Annual renewal process:
  • Provide outline of important date and follow-up reminders throughout renewal period;
  • Retrieve and send copy of CRD Rep Roster Report;
  • Provide IARD funding information;
  • Retrieve and send copy of initial and final renewal statement; and
  • Verify IARD renewal account properly funded in timely manner and provide specific reminder notices if funding not credited.
• Form ADV Annual Amendment:
  • Prepare the Form ADV Part 1 Annual Update filing through the IARD system;
  • Update Item 4E of Form ADV Part 2;
  • Upload the revised Form ADV Part 2 to the IARD system and submit the amended Form ADV Part 1 and Part 2 to through the IARD system.

Option S5: Switch from SEC to State Registration (1 State) + State Specific, Self-Customized Template WSP/COE (Didn’t Previously Purchase Our WSP/COE) + Annual Renewals & ADV Annual Amendment

Contains all services previously indicated under Option S1, Option S2 and Option S4.

Option S6: Switch from SEC to State Registration (1 State) + State Specific, Customized WSP/COE(Didn’t Previously Purchase Our WSP/COE) + Annual Renewals & ADV Annual Amendment

Contains all services previously indicated under Option S1, Option S3 and Option S4.

Switching Options – Only Available for Existing Clients – RCC Drafted Last WSP/COE

Option S7: Switch from SEC to State Registration (1 State) + State Specific, Self-Customized Template WSP/COE (Previously Purchased Our WSP/COE)

Contains all services previously indicated under Option S1 plus the following additional services:

• Provide state specific, self-customized template written supervisory procedures/code of ethics (no customization by RCC).

Option S8: Switch from SEC to State Registration (1 State) + State Specific, Customized WSP/COE(Previously Purchased Our WSP/COE & Does Not Want 2011 Updates)

Contains all services previously indicated under Option S1 plus the following additional services:

• Convert existing SEC WSP/COE manual to state specific WSP/COE manual; however conversion does not include 2011 WSP/COE update package. (Any additional revisions done at hourly rate.)

Option S9: Switch from SEC to State Registration (1 State) + State Specific, Customized WSP/COE(Previously Purchased Our WSP/COE & Wants 2011 Updates)

Contains all services previously indicated under Option S1 plus the following additional services:

• Convert existing SEC WSP/COE manual to state specific WSP/COE manual; conversion will include 2011 WSP/COE update package. (Any additional revisions done at hourly rate.)

Option S10: Switch from SEC to State Registration (1 State) + State Specific, Self-Customized Template WSP/COE (Previously Purchased Our WSP/COE) + Annual Renewals & ADV Annual Amendment

Contains all services previously indicated under Option S1, Option S4 and Option S7.

Option S11: Switch from SEC to State Registration (1 State) + State Specific, Customized WSP/COE(Previously Purchased Our WSP/COE & Does Not Want 2011 Updates) + Annual Renewals & ADV Annual Amendment

Contains all services previously indicated under Option S1, Option S4 and Option S8.

Option S12: Switch from SEC to State Registration (1 State) + State Specific, Customized WSP/COE(Previously Purchased Our WSP/COE & Wants 2011 Updates) + Annual Renewals & ADV Annual Amendment

Contains all services previously indicated under Option S1, Option S4 and Option S9.

Add-Ons to All Service Options Listed Above

For an additional fee, RCC can offer any of the following specific services as an add-on to the above service package options:

• Draft disciplinary disclosures required in Part 2A Item 19D or Part 2B Item 7;
• Register in additional states;
• Update Wrap-Fee Brochure to Include Part 2A, Item 19E information and upload updated version;
• Amend & submit Form U4(s) to license IARs in additional states;
• Draft new ADV Part 2B Supplemental Brochures; and
• Any revisions to Form ADV Part 2 not specifically referenced above (i.e., revisions requested by state securities regulators after document is submitted for registration; revisions requested by client not relating to revisions required due to switch from SEC to state registration). 

The above description is merely a summary of our switch services for new and existing RCC clients. Please refer to our consulting agreement for a more detailed explanation of the scope of our services.

Our services and pricing are based on each client’s specific situation and needs. There are a variety of factors that may affect the pricing of the services disclosed above and there are some optional services that may need to be added to these packages. In order to obtain a quote for these services, please click here to schedule a time for one of our consultants to further discuss your firm’s needs and how RIA Compliance Consultants can assist you.