Along with updating your Form ADV Annual Amendment, it’s important to remember that many 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 if material changes) directly to the state securities regulator (outside of the IARD/CRD system).
Category Archives: Financial Statements
SEC Brings Enforcement Action Against RIA for Allegedly Failing to Disclose Adverse Info About Promissory Notes Issuer
February 07, 2021
The U.S. Securities and Exchange Commission (“SEC”) recently instituted a cease-and-desist proceeding against an SEC registered investment adviser firm and its principal for failure to disclose material information to a client regarding promissory notes issued by a third-party, which eventually was charged in June 2018 by the SEC with an offering fraud and placed under receivership in December 2018. Click here to view the SEC order in this matter; the following is a summary of the SEC’s allegations in this matter, RIA Compliance Consultants, Inc. has not verified the accuracy of such allegations.
The Division of Securities within the Colorado Department of Regulatory Agencies recently provided guidance to state-registered investment adviser firms who received Paycheck Protection Program (“PPP”) loans. Click here to review this guidance.
The following is informal (non-binding) guidance recently provided by the North Carolina Securities Division to a particular state-registered investment adviser firm regarding the disclosure of a Paycheck Protection Program (“PPP”) loan as it relates to the investment adviser firm’s financial condition.
The U.S. Securities and Exchange Commission (“SEC”) recently provided guidance on the disclosure obligations of an investment adviser firm when receiving a Paycheck Protection Plan (“PPP”) loan guaranteed by the U.S. Small Business Administration in conjunction with the relief afforded from the CARES Act during the COVID-19 pandemic.
With the recent decline in the markets due to COVID-19, it is likely that many investment adviser firms relying upon asset-based fees are also facing a significant decline in the investment advisory fee revenue which can have compliance implications depending upon the circumstances.
As your state registered investment adviser firm completes its Form ADV Annual Amendment, it’s important not to forget that many state securities regulators also require a state registered investment adviser firm to submit annual financial statements and/or other documents directly to the state securities regulator (outside of the IARD/CRD system).
Tip #5 for IARD Renewals – Check for State’s Miscellaneous Requirements – Annual Financials
December 02, 2019
Certain state securities regulators have additional renewal requirements beyond the IARD renewal statements and Annual Form ADV Amendment.
Regulatory Reminder for State Registered Investment Advisers – Submission of Annual Financial Statements in Certain States
March 15, 2019
As your state registered investment adviser firm completes its Form ADV Annual Amendment, it’s important not to forget that many state securities regulators also require a state registered investment adviser firm to submit annual financial statements and/or other documents directly to the state securities regulator (outside of the IARD/CRD system).
Financial Statements
December 20, 2006
This entry of “Year-End Compliance Tips” focuses on the updating of financial information. If your advisor firm is registered with one or more states, you may be required to submit certain financial statements to the state regulators on an annual basis. Many states have certain net worth or net capital requirements. Some states also have surety bond requirements. Most states that have these provisions require advisor firms to substantiate they are in compliance with the rules by submitting financial statements. In some cases the financial statements must be submitted at the end of the firm’s fiscal year and in some states the financial records must be submitted at the end of the calendar year. In addition to any forms the firm may have to submit directly to regulators, it is essential the firm has updated all of its financial records under the regulatory books and records requirements. This is true for state and SEC registered advisor firms. For example, SEC registered firms are required to keep the following as part of their books and records (Investment Advisers Act of 1940, Rule 204-2):
