For investment adviser firms which are state registered with Nebraska, it’s crucial to be aware that there are certain additional documents which must be submitted directly (via a ShareFile link) to the Nebraska Securities Bureau in addition to and separate from the paying the regulatory fees associated with annual renewals and filing the Form ADV Annual Amendment via the IARD (“Investment Adviser Registration Depository”) system.
Nebraska’s 2024 Investment Adviser Renewal Notice and Checklist
The Securities Bureau of Nebraska Department of Banking and Finance has issued its 2024 renewal notice for state-registered investment adviser firms and investment adviser representatives. An investment adviser firm can find the complete renewal notice and checklist on Nebraska’s website. Let’s delve into the key points you need to know related to the additional documents.
Additional Documents for Submission Outside of IARD System
While the majority of an investment adviser firm’s annual renewal process is done through the IARD system, Nebraska has certain additional documents that state registered investment advisers must submit directly to the Securities Bureau outside of the IARD system. These include the following:
Financial Statements and Reporting Requirements:
- Custody of Client Funds: If a state registered investment adviser firm has custody of client funds, it is mandatory to provide a current audited financial statement.
- No Custody of Client Funds: For state registered investment adviser firm that does not have custody of client funds, a balance sheet prepared in accordance with generally accepted accounting principles (GAAP) is required. This balance sheet should be signed by an officer or owner of the firm, certifying its accuracy. It is important to note that financial documents must be current, meaning they should be dated no earlier than 90 days before the investment adviser firm’s current registration, which in this context should not be earlier than September 30, 2023.
Net Capital Requirements:
- Proof of Surety Bond (if applicable): A state registered investment adviser firm with a principal office and place of business in Nebraska is required to maintain a minimum net capital of $25,000 at all times or post a surety bond of $25,000. Net capital may not include certain assets described in 48 NAC 7.008.03. If the investment adviser firm is relying on the surety bond, then proof of such surety bond must be provided to the Nebraska Securities Bureau.
- Out-of-State Advisers: A state registered investment adviser firm with a principal office and place of business located outside of Nebraska must adhere to the net capital requirements of its home state.
Investment Adviser Contracts:
- A copy of all investment adviser contracts or agreements which includes, but is not limited to, the following:
- client contracts;
- asset management agreements;
- financial planning agreements;
- contracts with other investment advisers;
- co-adviser agreements;
- sub-adviser agreements;
- third party adviser agreements; and
- solicitor agreements.
Due Date for Submitting Additional Documents
The additional documents identified above must be submitted to the Nebraska Securities Bureau by December 11, 2023, via a secure ShareFile link email to the firm contact identified on the Form ADV. If an investment adviser firm did not receive such, email with the ShareFile link, please contact the Nebraska Securities Bureau.
Failure to Submit – Automatic Termination
Failure to meet the above deadline for submission of these additional documents will result in the automatic termination of the registrations of the firm and its representatives on January 1, 2024, and consequently, the firm and its representatives will be unable to conduct any investment advisory business in Nebraska.
It’s important to remember that many other state securities regulators also require state registered investment adviser firms to submit annual financial statements and/or other documents (e.g., proof of continued coverage of a surety bond, investment advisory client agreement) directly to the state securities regulator (outside of the IARD/CRD system). The required documents and deadline can vary among state securities regulators. A state registered investment adviser firm should consult its home state securities regulator to confirm whether there are any annual submissions (outside of the IARD/CRD system) and the applicable deadline.
Available to Assist with Your Renewals
RIA Compliance Consultants, Inc. can assist you with the IARD Renewal and Form ADV Annual Amendment process. If you are an existing client of RIA Compliance Consultants, please contact your consultant to discuss how we can assist you. If you have not previously worked with RIA Compliance Consultants, please click here to learn more about our 2024 IARD Renewal and Form ADV Annual Amendment Services, or contact our business development team at Contact Us.
The information contained in this blog post is general in nature intended for educational purposes only and is not intended to be a comprehensive analysis of this topic. This is merely a summary and does not necessarily include all topics covered in the regulator’s guidance. RIA Compliance Consultants, Inc. is not offering any safe harbor, guarantees nor other assurances associated with the example questions that an examiner may consider related to informed consent. The content of this blog post may become dated and inaccurate; RIA Compliance Consultants, Inc. does not typically update past posts. This post is not intended to constitute compliance consulting advice or apply to any particular investment adviser firm’s specific situation. Please consult the applicable securities regulator’s order, rules and published guidance for more details about the topics referenced above. RIA Compliance Consultants, Inc. is not a law firm and does not provide legal services. For more information about the limitations of this blog post and information on our website, please see our Disclosures webpage.