Many states have unique requirements for their investment advisers. The New Jersey Bureau of Securities, the securities regulator in the state, requires that state registered investment advisers fill out a written examination. These written examinations must be completed annually by the investment adviser firm. The New Jersey Bureau of Securities’ written examination form states that “written examinations do not take the place of on-site examinations, but may alleviate the need to conduct on-site examinations.” Alternatively, information in the written examination questionnaire may raise red flags for theNew Jersey Bureau of Securities and lead to an on-site examination by regulators.
The written examination questionnaire requests comprehensive information from investment advisers. The examination is organized into three parts including: General Questions and Documents Required; Investment Adviser Firm Information; and Investment Adviser Representative Information. Examples of general information the New Jersey Bureau of Securities requests include sample advisory contracts, advertisements, sample investor suitability questionnaires, a copy of the firm’s code of ethics and a balance sheet for the investment adviser. Investment adviser firm information the examination requests include information about complaints, associations with other firms or broker-dealers, fees, assets under management and types of investment products offered. The New Jersey Bureau of Securities written examination requests investment adviser representative information including dual affiliations or registrations, “doing business as” (DBA) names being used by the investment adviser representatives that are different than the firm’s name and any formal or informal complaints involving a specific investment adviser representative.
The written examination instructs that responses should include an explanation of any changes that have occurred to answers from previous years. Investment advisers should attach such explanations to the completed written examination paperwork that is submitted to the New Jersey Bureau of Securities. The completed written examination and any additional documents are submitted to the New Jersey Bureau of Securities electronically by email or if the response cannot be submitted electronically, then it can be submitted via overnight or certified mail. According to the written examination form, the examination “will not be deemed complete until you have adequately responded to each question and submitted all requested documents and/or a description of changes to any relevant documents or information previously submitted to the New Jersey Bureau of Securities.” Failure by the investment adviser to return the written examination in a timely, complete and accurate manner could lead to sanctions and fines from the New Jersey Bureau of Securities.
If your investment adviser is located in New Jersey and would like help in the future completing this written examination questionnaire, RIA Compliance Consultants can help. If you are an existing client please contact your compliance consultant. If you are new to RIA Compliance Consultants please contact us and we can set up a time to review your information.
Posted by Bryan Hill
Labels: Annual Review, Examination, New Jersey Investment Advisor
