How To Register as an Investment Adviser
Division of Investment Management
Links to New Material Added, October 14, 1999
If you are required to register with the SEC as an investment adviser, you must file Form ADV and keep it current by filing periodic amendments, including an annual amendment on Schedule I to Form ADV. You must also, among other things: comply with the "brochure rule," which requires most advisers to provide clients and prospective clients with information about the adviser's business practices and educational and business background; maintain accurate and current books and records, as specified by SEC rules; and be subject to inspection and examination by the SEC staff. You also may be subject to limited forms of state regulation. These requirements are discussed below, and in the document "General Information on the Regulation of Investment Advisers." In addition, please consult the Investment Advisers Act, the rules thereunder, and the instructions to the forms, all of which have been included in this booklet for your convenience.
Form ADV is the application for registration with the SEC as an investment adviser. Part I asks for information that is used to review the application and is used in the SEC's investment adviser regulatory program. Part II requires disclosure of the background and business practices of the investment adviser, and can be given to clients of the investment adviser to comply with the "brochure rule." There are also several schedules to Form ADV. You must file both parts of Form ADV and the appropriate schedules with the SEC. Schedule I must be filed with the SEC annually, regardless of whether information on the schedule has changed.
How Long Does it Take To Process Form ADV?
Within 45 days after you file your Form ADV registration application, the SEC must grant your registration or begin proceedings to deny it, assuming that you have fully and properly completed all items of the form and accompanying schedules. The SEC staff will return any Form ADV that is not fully and properly completed. A new 45 day period will begin when the Form ADV is resubmitted.
Amending Form ADV
SEC-registered advisers must update Form ADV annually by amending Schedule I and any information on the form that has become inaccurate. Instruction 10 to Form ADV specifies the type of information that must be corrected promptly, and the type that must be corrected within ninety days of the end of the adviser's fiscal year. Schedule I to Form ADV must be amended every year, within ninety days of the end of the adviser's fiscal year. If an adviser indicates on Schedule I that it is no longer eligible for SEC registration, the adviser must withdraw its registration within 180 days after the end of the adviser's fiscal year.
Amending the form requires completing the execution page (page one of the form) and the entire page(s) containing the updated item(s). Circle the items being amended. Rule 204-1 and the instructions to Form ADV give more complete information on amendments.
Current Books and Records, Balance Sheets
All SEC-registered investment advisers must maintain true, accurate, and current books and records, as specified in Rule 204-2. Not all SEC-registered investment advisers, however, are required to submit financial statements to the Commission. SEC-registered investment advisers must file a balance sheet for the most recent fiscal year if they have custody or possession of client funds or securities, or if they require prepayment of more than $500 in fees per client, six months or more in advance. See Form ADV, Part II, Item 14, and Schedule G to Form ADV. If you are required to submit a balance sheet, it must be audited by an independent public accountant. It is filed annually on Schedule G as an amendment to Form ADV. In addition, an adviser that has custody of client funds or securities must arrange for an independent public accountant to perform a "surprise" inspection of the custody property at some time during the calendar year, and the accountant's report of this examination must be filed with the Commission as an attachment to Form ADV-E.
Copies of SEC forms, including Forms ADV and ADV-W, can be obtained from the SEC's Publication Unit in Washington, D.C. by calling (202) 942-4046, or by sending a written request to: Publications Unit, U.S. Securities and Exchange Commission, 100 F Street, NE, Mail Stop LL610, Washington D.C., 20549. There is no charge.
Investment Adviser Registration and Withdrawal Forms are now available on the SEC website
Where to File
Submit all forms to:
U.S. Securities and Exchange Commission
100 F Street, NE
Washington, D.C. 20549
Attn: Filing Desk
All of the forms, including Forms ADV and ADV-W, contain detailed instructions. Additional inquiries regarding the mechanics of completing and filing the forms should be directed to: Branch of Registrations and Examinations, SEC Operations Center, Mail Stop A-2, 6432 General Green Way Drive, Alexandria, VA 22312; phone: (202) 942-8980.
Copies, Signatures, Names
All adviser filings must be typed, and submitted in triplicate. Failure to submit three copies will result in the filing being returned. The filing also may be declared delinquent when it is resubmitted. You should retain a fourth copy of all filings for your records. Each copy of an execution page must contain an original, manual signature. Anyone executing a Form ADV or an amendment to Form ADV must use his full name unless the individual legally only has an initial. If the registration application is filed by a sole proprietor, it should be signed by the proprietor; if filed by a partnership, it should be signed in the name of the partnership by a general partner; if filed by a corporation, it should be signed in the corporation's name by an authorized principal officer. The signature to Form ADV must be notarized, or may be signed without notarization under penalty of perjury.
There are no fees for registration as an investment adviser, nor are there any fees for amendments or other filings.