Investment Advisers FAQs

Frequently Asked Questions

  1. When is a firm required to register with the state or notice file in New York?

Answer:

Registration or notice filing is required with 6 or more clients through the Investment Adviser Registration Depository system ("IARD").

  1. May I register or notice file with less than 6 NY clients?

Answer:

Yes.

  1. What are the requirements for Securities Exchange Commission ("SEC") registered advisers?

Answer:

If you have more than 5 NY clients, you must submit a notice filing by adding NY as a notice filing state on the IARD.

  1. I am no longer eligible for SEC registration. What should I do?

Answer:

If you have more than five New York Clients, add New York (check NY box on the ADV) as a registration state (the $200 annual fee must be paid to FINRA through the IARD system). See §11.6, 11.9, and 11.14 of the investment advisor regulations for information about financial statements and the testing requirement.

  1. Which New York firms are required to register with the SEC?

Answer:

Firms with a principal place of business in New York must register with the SEC with $25 million dollars of assets under management. Firms with Principal places of business located in other states remain SEC registered with more than $90 million dollars of assets under management.

  1. Where can I find the investment adviser regulations?

Answer:

They are available here. It is recommended you print and read the Title 13, Part 11 New York Code of Rules and Regulations (NYCRR) commonly referred to as the regulations before starting the process. The SEC website www.sec.gov/iard may have other helpful information for both state and federally registered advisers.

  1. What do I file?

Answer:

All firms seeking to do business in New York must file the form ADV through the IARD system. State applicants must submit Parts 1A, 1B, 2A and 2B. SEC registered firms notice filing in New York must submit Parts 1A and 2A.

  1. Where do I obtain a copy of the ADV?

Answer:

It is available at www.sec.gov/iard or at www.ag.ny.gov/investor-protection/investors or www.nasaa.org .It is recommended you print and read the entire application before starting the process. The SEC website may have other helpful information for both state and federally registered advisers.

  1. How do I file the ADV electronically?

Answer:

Go to www.iard.com and click on "How to get started on IARD." Print out the "State Registrant Entitlement Packet." Read the package, complete the forms and mail to the address provided in the packet. You will receive information on how to complete the IARD filing along with instructions on how to fund the IARD account.

  1. Could some explanation be provided for Part 2?

Answer:

The Part 2 is entirely narrative. Part 2A has 19 items and Part 2B has 7 items, all with multiple parts, each must be read completely. The heading for each item must be included. The headings must be in the same order as indicated in the application. If any part of an item is not applicable, write “Not Applicable”. The narrative must be in plain English, using short sentences. Review the instructions carefully and address each completely.

  1. May I file a paper copy of the ADV?

Answer:

No, the entire ADV must be electronically filed through the IARD.

  1. Does anything else need to be submitted in addition to the IARD filing?

Answer:

State registered advisers must submit an income statement and balance sheet either audited or certified by management and may be required to submit one or more of Form NY-IAQ. (available here )

  1. Are financial statements required if I am a sole proprietor, new investment adviser, etc.?

Answer:

All state registered investment advisers must submit a balance sheet and income statement. (Federally registered advisers/SEC are not required to do so.) There is currently no net capital or bonding requirement in NY.

  1. Must the financial statements be prepared according to generally accepted accounting principles?

Answer:

Yes, see NYCRR Title 13, Part 11, §11.14 of the investment adviser regulations.

  1. May I prepare the financial statements myself or must an accountant?

Answer:

We do not require that an accountant prepare the financial statements, however they must be prepared according to generally accepted accounting principles. The financial statement must be prepared for the specific type of entity. For example, the balance sheet for a corporation must have a stockholders equity section and a LLC must have the member capital section, neither financial presentation is allowed to have a net worth section. The income statement must have three sections: revenue, expenses and net income (profit/loss). The balance sheet and the income statement must be consistent with each other and should not contain the personal expenses, assets or liabilities of its principals.

  1. Is there a template for the financial statements?

Answer:

No.

  1. Does NY register investment adviser representatives through FINRA’s U4 process?

Answer:

No, but there are exam requirements for those individuals who represent state registered investment advisers. There are no exam requirements for SEC registered firms.

  1. How do I know if I am required to take an exam?

Answer:

All individuals that represent a state registered investment adviser must meet the requirements of NYCRR Title 13, Part 11, §11.6 or §11.7 of the investment adviser regulations. If you have taken the Series 65 or both the Series 66 and Series 7 within the last two years, you do not have to do anything. If you have not taken the required exams within the last two years, look at §11.7 of the investment adviser regulations to see if you qualify for a waiver. If you think you are eligible for a waiver, then complete the Form NY-IAQ Form NY-IAQ and submit the form to the Investor Protection Bureau. If not eligible for a waiver, you must arrange to take the exam. Please do not submit Form NY-IAQ if you do not have any of the qualifications listed.

  1. If I don't qualify for a waiver, when must I pass the exam?

Answer:

Prior to providing advice to the public.

  1. Does New York sponsor individuals for the series 65 exam?

Answer:

No, a sponsor is not required. For information about the Series 65 exam, go to www.nasaa.org and go to the exam section on the Industry Resources drop down box. Exam registration is through FINRA’s U10 process.

  1. Must I pay the $200 annual fee if I register/notice file voluntarily?

Answer:

Yes, if you wish to be registered or notice filed, you must pay the fee and be in compliance with all regulations.

  1. Are there annual filing requirements for state registered advisers?

Answer:

Yes, in addition to the annual fee, an annual updating amendment must be done on the IARD system and fiscal year-end financial statements must be submitted all within 90 days after your fiscal year end.

  1. Will I receive a notice to submit my annual filings?

Answer:

It is your responsibility to submit annual filings on a timely basis as well as comply with all sections of the investment adviser regulations whether or not you receive a notice from this office, FINRA, or the SEC.

  1. If I amend the ADV, do I need to send a copy to you?

Answer:

Do not mail printouts of the ADV that is on the IARD system to this office, we may access it online at any time.

  1. What is the filing fee and annual filing fee?

Answer:

$200 is the required fee. This fee should be paid though the IARD system.

  1. If I receive a deficiency letter for additional information, am I required respond?

Answer:

Yes, a response is necessary to complete the filing.

  1. Where do I mail documents, financial statements and other required paper filings?

Answer:

NYS Department of Law
Investment Protection Bureau
Investment Advisory Unit
120 Broadway, 23rd floor
New York, NY 10271

  1. If the company ceases operations, seeks to withdraw or no longer seeks registration, is a filing necessary?

Answer:

Yes, file a Form ADV-W using the IARD system.

  1. If I still have a question after reading all materials, is there someone I can call?

Answer:

(Please note you may need to leave a voice mail message due to the volume of calls.) 212-416-8222.

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