Similar to other states, a firm seeking to register as a state registered investment advisor in California is required to file the Form ADV Part 1 and Part 2 along with any applicable schedule or appendix through the Investment Adviser Registration Depository (“IARD”) system and correspondingly pay in advance the registration fees via the IARD system. Additionally, a firm applying for state registration as an investment advisor in California is required to send the miscellaneous documents identified below directly to the California Department of Corporations. Here is some additional information related to an investment advisor firm registering in California.
A California registered investment advisor firm with its principal place of business in California is subject to the following minimum financial requirements if the investment advisor firm (i) has custody of client funds or securities, (ii) has discretionary authority over client funds or securities or (iii) accept s prepayment of more than $500 per client and six or more months in advance:
A California registered investment advisor firm with its principal place of business in a state other than California should maintain minimum capital as required by the state in which the applicant maintains its principal place of business, provided the applicant is licensed or registered in such state and is in compliance with such state’s minimum capital requirements. If a California registered investment advisor firm is not licensed or registered in the state where it maintains its principal place of business, the investment advisor firm is subject to California’s minimum financial requirements.
The minimum financial requirements do not apply to a California registered investment advisor firm that is also licensed as a broker-dealer under Code Section 25210.
An investment advisor firm registered or registering in California, which is subject to the minimum net worth requirements, is required to complete the Minimum Financial Requirements Worksheet. If a California registered investment advisor falls below 120% of the required minimum net worth, the California Department of Corporations has additional reports and requirements of such investment advisor firm.
Beyond the minimum net capital requirements described above, please refer to the California Code of Regulations with respect to what circumstances constitute an investment advisor firm registered in California having custody of client securities or funds and any additional requirements, forms and filings required of a California registered investment advisor firm with custody.
The information listed above regarding California advisor registration is being provided for your convenience and is not intended as advice by RIA Compliance Consultants, Inc. Your use of or reliance upon this information does not create a consulting engagement with RIA Compliance Consultants.
Please understand that RIA Compliance Consultants does not guarantee the accuracy of the California investment advisor registration requirements listed above. This information may not be current, and there may be additional California investment advisor registration requirements, forms and procedures which are not identified above. The information on this website is not sufficient for determining whether to register as an investment advisor firm or investment advisor representative. A prospective or existing California registered investment advisor should review in detail the published investment advisor rules of California Department of Corporations.
The information on this website page is not intended to be an all-inclusive analysis of the state investment advisor registration requirements of California. This website page is not intended as a substitute for and should not be considered the equivalent of consulting with investment advisor compliance professional.