7 IA Flashcards
Investment Co Act 1940
who must reg (5)
- invest co must reg - # shareholders > 100
- certificate companies
- UIT
- Mgmt Co
- Seperate Acct for Var Annuity
Investment Advisor Act 1940
applies to / who must register
exemptions
Dodd-Frank update
FA
FA 100-110MM -reg in either fed or state
FA > 110 MM - reg fed
or advise reg inv co
exempt
FA - only govt sec
publishers of gen inv newsletters
Investment Advisor is
offers advice or analysis concerning SEC
and
recvs comp for doing so
Investment Advisor (IA)
State Exemptions
(9)
- IA representative - works for IA
- bank, savings or trust
- professional whose inv. adv. is incidental of profession (lawyer, accountant)
- BD or agent whose inv. adv. is incidental w/ no comp
- publisher of news whose adv is not client specific
- fed covered IA, exempt from state
- no office in state and only clients are institutional
- De Minimis - prev 12 mo.
- others who are nt w/in the intent of the rule
National Securities Markets Imporovement Act (NSMIA)
law that seperated state and federal registration of IAs
Fed Reg Factors (6)
AUM - assets under mgmt
- mutual fund advisor
- pension consultant for plans > 200MM
- affiliate of SEC registered advisor and shares home offices
- adviser to bus dev co (25-100MM AUM)
- mid size advisor (25-100MM) not req to state reg or be examinationed where home office is (NY & Wyoming)
- principal office outside US
Fed SEC Reg
may register if (3)
- IA that would be required to reg in 15+ states
- IA that expect to be eligible for fed reg w/in 120 days
- Internet IA w/ < 15 clients outside of web
Federal Registration Exemptions
- IA to ins co.
- banks
- incidental advice
- news
- advice on exempt sec
- rating org
- family office
State Registration Process
- file paper with Investment Adviser Registration Depository (IARD)
- ADV U4
ADV Form 1
ADV Form 2
(ADV = adviser)
1 - gen info
nature of practice, principal, contact, types of services, books, displinary history
2- info for customer
fees, types of clients and investments, methods, edu background
State vs Fed Registration
ADV Part 1
ADV Part 2A
ADV Part 2B
State - all
Fed - 1 and 2a (2 b is brochure for clients)
IA Registration effective date
noon 30th day after app is filed
admin can set earlier date
IA Renewal
midnight Dec 31st
IA Net Capital Requirements
exclude items can turn to cash - house, car or trademarks
$35,000 IA w/ custody over client accts
$10,000 IA discretionary authority
if req pre-payment of client fees by client, must have + net worth (>$.01)
If captial req not met must file
what by when to state
close next bus day
trail balance ledger acts
non-segregated stmt of client funds
total client debt balances
client accts
