The amount of time needed to register varies depending on the size of the firm. RIA Compliance Consultants estimates that it takes several weeks to a month to prepare all forms and up to 45 days for the SEC to approve or deny the registration request.
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Will the individuals at the firm need to register as investment adviser representatives?
November 02, 2018
No, individuals do not necessarily need to register as investment adviser representatives. Registering the organization as a corporation or limited liability company is the most common option but individuals can establish the investment adviser as a sole proprietor.
How much are the fees for filing as an investment adviser with the SEC?
November 02, 2018
FINRA charges a fee to file using the IARD system. The fee for filing under the IARD for exempt advisers is $150. The fee for nonexempt investment advisers to register is $225 and to file quarterly and annual reports is $150.
Will advisers need written compliance manuals?
November 02, 2018
All advisers that do not qualify for the registration exemptions are subject to the same requirements as other SEC-registered investment advisers. So yes, firms will need written compliance manuals.
Are there any reporting requirements for exempt advisers?
November 02, 2018
Advisers that rely on the venture capital exemption and the private fund with less than $150 million in assets under management exemption are considered “exempt reporting advisers,” are still subject to certain reporting requirements and may be subject to state reporting requirements. These advisers will be required to file the same registration form (i.e. Form ADV Part 1) as registered investment advisers. However, they will not be required to complete the entire Form ADV Part 1. Rather, they will have to provide basic identifying information, information about the fund and any conflicts of interest that could present risks to the fund’s clients, and include any disciplinary history. These reports will need to be filed through the SEC’s Investment Adviser Registration Depository (IARD). The first report was due in the first quarter of 2012.
Who must file Form PF?
November 02, 2018
Investment advisers must file a Form PF if registered or required to register with the SEC as an investment adviser; or if registered or required to register with the CFTC as a CPO or CTA and also registered or required to register with the SEC as an investment adviser; and manage one or more private funds and; you and your related persons, collectively, had at least $150 million in private fund assets under management as of the last day of your most recently completed fiscal year. The due date for Form PF varies depending on the classification and size of the investment adviser. Many private fund advisers meeting these criteria will be required to complete only Section 1 of Form PF and will need to file only on an annual basis. Large private fund advisers, however, will be required to provide additional data, and large hedge fund advisers and large liquidity fund advisers will need to file every quarter.
When registering, what type of information will advisers have to provide about the private funds they manage?
November 02, 2018
Advisers to private funds are required to complete Section 7.B. of Form ADV Part 1A. This section has approximately 25 questions designed to require specific information about the fund’s organization and operation structure as well as identification of service providers (i.e. auditors, custodians, etc.) who perform important roles for the fund. In addition, advisers to funds with more than $150 million of assets must file Form PF and the due date for form PF varies depending on the size and classification of the investment adviser.
Are the exemptions mandatory?
November 02, 2018
No, a firm that is exempt from registration can still register (or remain registered) with the SEC if they choose to do so, assuming the firm meets the requirements of Section 203A of the Advisers Act (more than $100 million in assets under management or qualifies for an exception to the prohibition from registering with the SEC). Investment advisers must also consider state registration requirements. A firm that is exempt from SEC registration may not necessarily be exempt from state registration and thus required to register directly with one or more state securities divisions.
Are there any exemptions to the registration requirements?
November 02, 2018
Yes, there are several exemptions to registration requirements but for purposes of this FAQ, we are assuming the private fund adviser is not required to register at the state level and focusing on the three passed in connection with the private fund adviser requirement: (1) venture capital fund advisers, (2) foreign private advisers, and (3) private fund advisers with less than $150 million in assets under management.
When did the new rules become effective?
November 02, 2018
The new rules were effective July 21, 2011. However, firms which are required to register with the SEC had until March 30, 2012 to do so. If your firm was subject to the registration requirements prior to March 30, 2012 and did not register, immediate action must be taken to comply with the registration requirements.
