Yes. The regulators require that you have written compliance policies and procedures so that all of your employees have an understanding of how the firm is to operate as of the day your firm becomes registered.

The compliance policies and procedures have to include a Privacy Policy, Code of Ethics, Written Supervisory Procedures and Business Continuity Plan, among others. Some firms will also be subject to specific state requirements, such as the Massachusetts Protection of Personal Information Policy.

For more information on any of these topics, please give us a call at (603) 430-8317 or contact us.

Currently, the filing requirement for firms registering with the SEC is to file the Form ADV Parts 1 and 2 through the IARD system and pay the SEC registration fee and state notice filing fees. You will also be required to register an Investment Advisor Representative with the state where your firm has its principal place of business.

For firms registering with the state regulators, the states do have particular filing requirements. The requirements vary from state to state.

To learn more about how we may assist you through the registration process, please give us a call at (603) 430-8317 or contact us.

Form ADV is the form investment advisors must complete in order to become registered with either the SEC or the state regulators. Form ADV explains to the regulators how you intend to run your business.

Form ADV Part 1 is filed electronically through the IARD system. Firms registering with the SEC must complete Part 1A and firms registering with the state(s) must complete Part 1A and Part 1B.

The Form ADV Part 2A (Brochure) and 2B (Brochure Supplement) are your disclosure documents that you will provide to prospective clients explaining how your firm operates and who your investment advisor representatives are. You are required to offer or deliver these documents to your existing clients on an annual basis. These documents are also required to be updated annually and filed through the FINRA IARD system within 90 days of the end of your fiscal year.

For more information about this important regulatory requirement, please give us a call at (603) 430-8317 or contact us.

The registration process, including entitlement and Form ADV filing, generally will take between six and eight weeks, depending on the complexity of the services offered by your firm and the backlog of pending applications at the various regulatory agencies.

At both the SEC and state level, the regulators have between six and eight weeks from the date your application is submitted to respond to us with questions about the pending application. Our goal is to respond as quickly as possible to the regulator to help keep the process moving forward.

If you are a state registered RIA, the primary state where you file will be your home state where your office is located and where you conduct your advisory practice. As your business grows and you add clients in other states, the general rule is that you’re allowed to have up to five clients in each of the other states without having to make any filings or pay any fees (unless you have a place of business in that state – in which case you need to register in that state).

However, before you take on your sixth client in any state, you will need to register and be approved by the state. Four states do not recognize the five-client allowance. They are Nebraska, New Hampshire, Louisiana, and Texas. The process varies across these states, but all four require some level of registration and payment of fees right from the first client.

For SEC registered RIAs, even though the firm is registered with the SEC and the states have no supervision authority over the firm, you must “notice file” in your home state and any state in which you have a place of business or more than five clients. Notice filing is a fairly simple process of electronically sending the state a copy of your Form ADV Part 1, and paying the notice filing fee.

Note that although the SEC registers certain RIA firms, the SEC does not register the Investment Advisor Representatives (IARs) of the firms. The states can and do require registration of the IARs (with certain exceptions like New York) having a place of business within the state.

Under the current regulations, investment advisors with less than $100 million in assets under management within four months of their firm approval must register with the state regulators. You register your firm in the state where you have your principal place of business. Once a state Registered Investment Advisor‘s assets under management exceed $110 million, they must register with the SEC. [Note: You can voluntarily register with the SEC when assets exceed $100 million]

There are some exemptions that enable advisors with less than $100 million in assets under management to register with the SEC.

To learn more about these exemptions, please contact us at (603) 430-8317.