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What are the basic regulatory requirements for a solicitor referral arrangement between an SEC registered investment adviser and a third-party (non-employee)?


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Under SEC Rule 206(4)-3, a solicitor referral arrangement between the investment adviser and third-party (non-employee) solicitor must be in writing, which needs to include provisions related to the following: (a) the scope of the solicitor’s activities; (b) a covenant by the solicitor to perform such activities consistent with instructions of the investment adviser and in compliance with the Investment Advisers Act of 1940 and associated rules; and (c) a covenant by the solicitor to provide the client with a copy of the investment adviser’s Form ADV Part 2A and a separate written solicitor disclosure.

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