Certain State Securities Regulators Require Branch Registration for Investment Advisers

August 24, 2012

Fifteen states require investment advisers to register their branch offices with the state securities regulator. Currently, the Alabama Securities Commission, the  Arkansas Securities Department, the Connecticut Department of Banking, Securities and Business Investments Division, Florida’s Office of Financial Regulation , Hawaii’s Department of Commerce and Consumer Affairs, Idaho’s Department of Finance, the Illinois Securities Department, Maine’s Office of Securities, the New Hampshire Bureau of Securities, the New Mexico Securities Division, the Ohio Department of Commerce, the Texas State Securities Board, Vermont’s Department of Financial Regulation, the West Virginia Securities Commission, and Wisconsin’s Department of Financial Institutions require investment adviser branch offices to register with state securities regulators. Some of these 15 state securities regulators require an investment adviser branch office registration fee while other states only require registration of each investment adviser branch located in their state.  For state securities regulators that do charge branch office registration fees, the charges range from $20 (by the Illinois Securities Department) to $300 (by the New Mexico Securities Division). For further information on the investment adviser registration requirements in each state, refer to the North American Securities Administrators Association (“NASAA”) website.

Florida’s Office of Financial Regulation, Division of Securities has a rule in its administrative code that requires investment advisers to file Form BR with the state and submit a fee of $100. The Form BR used to register an investment adviser branch office with the Florida Division of Securities is the same Form BR that is used by broker/dealers to register branch offices with the Financial Industry Regulatory Authority (“FINRA”). Florida’s Division of Securities has a Bureau of Registration that processes and handles applications from investment adviser firms and investment adviser representatives. The Florida Division of Securities also requires “[a] manager for each branch office shall be designated and registered with the Office of Financial Regulation as a principal.”

The Illinois Securities Department has an administrative rule that “each new applicant for registration as an investment adviser shall file with FINRA, utilizing the Investment Adviser Registration Depository (“IARD”), a complete and current application and pay the filing fee and branch office fee for each branch office located in Illinois.” Another section of the Illinois Administrative Code specifies that “[a] Schedule D of the Revised Uniform Application for Investment Adviser Registration required by Section 130.840(a)(1) disclosing each branch office in this State shall be accompanied by the payment of the fee for each branch office in this State.” The Illinois Securities Department also requires that investment advisers amend their registration within 10 days of the opening or closing of any investment adviser branch offices in the state.

Recognizing the specific investment adviser branch office registration requirements of the state securities regulators where your investment adviser has a physical office location is important. If your investment adviser is located in a state that requires investment adviser branch offices to be registered, you must make sure each investment adviser branch office is correctly registered with an accurate address.

Please recognize that a state securities regulator’s branch office registration requirements is in addition to and not in lieu of the state securities regulator’s investment adviser registration requirements for the firm.

If your investment adviser has questions about investment adviser branch registration, please contact RIA Compliance Consultants. One of our consultants can work with you to make sure your investment adviser and its branches are properly registered with the applicable state securities regulators.

Posted by Bryan Hill
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