In a recent speech at the North American Securities Administrators Association (“NASAA“) annual conference, Texas Securities Commissioner, Denise Voigt Crawford who is the incoming NASAA President, revealed that the SEC might raise the asset under management (“AUM“) threshold for SEC registration of investment advisers from $25 million to $100 million, and NASAA supports such a change.
Category Archives: Registration
Single Family Office Not Required to Register with SEC
July 09, 2008
The SEC recently granted an order under Section 202(a)(11)(G) of the Investment Advisers Act of 1940 (“Advisers Act”) declaring that a particular “family office” and its employees, when acting within the scope of their employment, are not required to register as investment advisers pursuant to Section 203(a) of the Advisers Act. The SEC granted this order because it found that the applicant and its employees are not within the intent of Section 202(a)(11) of the Advisers Act which defines the term “investment adviser”. Section 202(a)(11)(G) allows the SEC to designate by rule, regulation, or order that certain persons are not within the intent of the definition of an “investment adviser.”
2008 IARD Annual Renewal and Form ADV Annual Amendment Requirements
October 24, 2007
Beginning Monday, November 5, 2007, investment advisor firms can access their 2008 Preliminary Renewal Statements via their IARD account. The Preliminary Renewal Statement must be paid, in full, by Monday, December 10, 2007. Because it takes approximately two days for payment to post to the IARD account, the funds should arrive no later than Thursday, December 6, 2007, to ensure the money is posted to your IARD account by the 10th.
Broker/Dealer Exemption Rule Vacated
May 11, 2007
In a 2-1 decision issued at the end of March, the U.S. Court of Appeals for the District of Columbia Circuit threw out what is commonly referred to as the Merrill Lynch Rule, formally known as Rule 202(a)(11)-1 of the Investment Advisers Act of 1940. Under this rule, the SEC exempted certain broker-dealers from investment advisor registration even if the broker-dealers provide what many contend to be advisory services and charge a fee for such services. From its inception, the Financial Planning Association fought the rule and ultimately received a successful outcome with last week’s ruling. In the ruling, Judge Judith Rogers and Judge Brett Kavanaugh noted that the SEC exceeded its authority by exempting brokerage firms that charge asset-based fees from registration under the Advisers Act.
Is It Time to Register with the SEC?
February 02, 2007
Because many firms have a December 31 fiscal year-end, it is likely that your investment advisor firm is currently working on its Form ADV Part 1 Annual Amendment. The Annual Amendment must be submitted through the IARD within ninety (90) days after an advisor’s fiscal year-end. While there are other criteria for registering with the SEC, by far the most common test for SEC registration is a firm’s assets under management. Therefore, for a large majority of firms, when completing the Annual Amendment, an advisor firm must pay close attention to updating the firm’s assets under management. Regulators, both at the federal and state levels, have stated an advisor’s assets under management must be current as on the firm’s most recently completed fiscal year.
Is It Time to Register with the SEC?
January 31, 2006
It’s likely that your investment advisor firm is currently working on its Form ADV annual amendment since it must be filed within ninety (90) days after an advisor’s fiscal year end. You should pay particular attention to updating the firm’s assets under management since regulators have stated an advisor’s assets under management must be current as of the firm’s most recently completed fiscal year.
Qualifications for IAR
November 08, 2005
As a follow-up to our previous entry, we thought we would discuss the general licensing qualifications that state regulators impose for investment advisor representatives. The following are the standard licensing requirements that states will accept as a qualification for investment advisor representative licensing:
IA Branch Office Registration
October 31, 2005
Does your investment advisor firm have an office location in a state that requires branch office registration? If so, have all of your office locations been properly reported to the appropriate state regulatory office? Depending on whether your firm is SEC or State registered, your firm may need to register its investment advisor office locations in states that require such filings. These requirements are in addition to reporting office locations on the ADV Part I.
Registration for Advisors to Private Funds
August 30, 2005
By now, you are probably aware that advisors to private funds (a/k/a hedge funds or pooled investments) need to register as investment advisors if they provide advice on securities to private funds. (To learn more, please read the SEC’s rule release.) The SEC is requiring these advisors to become registered by February 1, 2006. While we recommend submitting your filing with the SEC as soon as possible (preferably before December 1, 2005), an applicant needs to have all its ducks in a row before filing.
There are several criteria that qualify your firm for registration with the SEC as an investment advisor. For example, if your firm is registered with 30 or more states, you should rely on the multi-state rule and register with the SEC. If you are located in Wyoming, your firm must register with the SEC because the State of Wyoming does not regulate advisors. Investment advisors to investment companies must register with the SEC as well. To see a full listing of the SEC registration criteria, simply refer to your Form ADV Part 1. Item 2 details the different SEC registration criteria.
