Rule Text

Securities and Exchange Commission

§ 275.203A–2

amendment to your Form ADV reporting that you have at least $30 million
of assets under management.
(2) SEC-registered advisers—switching
to State registration. If you are registered with the Commission and file
an annual updating amendment to
your Form ADV reporting that you no
longer have $25 million of assets under
management (or are not otherwise eligible for SEC registration), you must
file Form ADV-W (17 CFR 279.2) to
withdraw your SEC registration within
180 days of your fiscal year end (unless
you then have at least $25 million of
assets under management or are otherwise eligible for SEC registration).
During this period while you are registered with both the Commission and
one or more State securities authorities, the Investment Advisers Act of
1940 and applicable State law will apply
to your advisory activities.
[65 FR 57449, Sept. 22, 2000]

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§ 275.203A–2 Exemptions from prohibition on Commission registration.
The prohibition of section 203A(a) of
the Act (15 U.S.C. 80b–3a(a)) does not
apply to:
(a) Nationally recognized statistical rating organizations. An investment adviser that is a nationally recognized
statistical rating organization, as that
term is used in paragraphs (c)(2)(vi)(E),
(F), and (H) of § 240.15c3–1 of this chapter.
(b) Pension Consultants. (1) An investment adviser that is a ‘‘pension consultant,’’ as defined in this section,
with respect to assets of plans having
an aggregate value of at least
$50,000,000.
(2) An investment adviser is a pension consultant, for purposes of paragraph (b) of this section, if the investment adviser provides investment advice to:
(i) Any employee benefit plan described in section 3(3) of the Employee
Retirement Income Security Act of
1974 (‘‘ERISA’’) [29 U.S.C. 1002(3)];
(ii) Any governmental plan described
in section 3(32) of ERISA (29 U.S.C.
1002(32)); or
(iii) Any church plan described in
section 3(33) of ERISA (29 U.S.C.
1002(33)).

(3) In determining the aggregate
value of assets of plans, include only
that portion of a plan’s assets for
which the investment adviser provided
investment advice (including any advice with respect to the selection of an
investment adviser to manage such assets). Determine the aggregate value of
assets by cumulating the value of assets of plans with respect to which the
investment adviser was last employed
or retained by contract to provide investment advice during a 12-month period ended within 90 days of filing an
annual updating amendment to Form
ADV (17 CFR 279.1).
(c) Investment advisers controlling, controlled by, or under common control with
an investment adviser registered with the
Commission. An investment adviser that
controls, is controlled by, or is under
common control with, an investment
adviser eligible to register, and registered with, the Commission (‘‘registered adviser’’), provided that the
principal office and place of business of
the investment adviser is the same as
that of the registered adviser. For purposes of this paragraph, control means
the power to direct or cause the direction of the management or policies of
an
investment
adviser,
whether
through ownership of securities, by
contract, or otherwise. Any person that
directly or indirectly has the right to
vote 25 percent or more of the voting
securities, or is entitled to 25 percent
or more of the profits, of an investment
adviser is presumed to control that investment adviser.
(d) Investment advisers expecting to be
eligible for Commission registration within
120 Days. An investment adviser that:
(1) Immediately before it registers
with the Commission, is not registered
or required to be registered with the
Commission or a securities commissioner (or any agency or officer performing like functions) of any State
and has a reasonable expectation that
it would be eligible to register with the
Commission within 120 days after the
date the investment adviser’s registration with the Commission becomes effective;
(2) Indicates on Schedule D of its
Form ADV (17 CFR 279.1) that it will
withdraw from registration with the
Commission if, on the 120th day after

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§ 275.203A–2

17 CFR Ch. II (4–1–10 Edition)

the date the investment adviser’s registration with the Commission becomes
effective, the investment adviser would
be prohibited by section 203A(a) of the
Act (15 U.S.C. 80b–3a(a)) from registering with the Commission; and
(3) Notwithstanding § 275.203A–1(b)(2)
of this chapter, files a completed Form
ADV-W (17 CFR 279.2) withdrawing
from registration with the Commission
within 120 days after the date the investment adviser’s registration with
the Commission becomes effective.
(e) Multi-state investment advisers. An
investment adviser that:
(1) Upon submission of its application
for registration with the Commission,
is required by the laws of 30 or more
States to register as an investment adviser with the securities commissioners
(or any agencies or officers performing
like functions) in the respective
States, and thereafter would, but for
this section, be required by the laws of
at least 25 States to register as an investment adviser with the securities
commissioners (or any agencies or officers performing like functions) in the
respective States;
(2) Indicates on Schedule D of its
Form ADV that the investment adviser
has reviewed the applicable State and
federal laws and has concluded that, in
the case of an application for registration with the Commission, it is required by the laws of 30 or more States
to register as an investment adviser
with the State securities authorities in
the respective States or, in the case of
an amendment to Form ADV, it would
be required by the laws of at least 25
States to register as an investment adviser with the State securities authorities in the respective States, within 90
days prior to the date of filing Form
ADV;
(3) Undertakes on Schedule D of its
Form ADV to withdraw from registration with the Commission if the adviser indicates on an annual updating
amendment to Form ADV that the investment adviser would be required by
the laws of fewer than 25 States to register as an investment adviser with the
securities commissioners (or any agencies or officers performing like functions) in the respective States, and
that the investment adviser would be
prohibited by section 203A(a) of the Act

(15 U.S.C. 80b–3a(a)) from registering
with the Commission, by filing a completed Form ADV-W within 180 days of
the adviser’s fiscal year end (unless the
adviser then has at least $25 million of
assets under management or is otherwise eligible for SEC registration); and
(4) Maintains in an easily accessible
place a record of the States in which
the investment adviser has determined
it would, but for the exemption, be required to register for a period of not
less than five years from the filing of a
Form ADV that includes a representation that is based on such record.
(f) Internet investment advisers. (1) An
investment adviser that:
(i) Provides investment advice to all
of its clients exclusively through an
interactive website, except that the investment adviser may provide investment advice to fewer than 15 clients
through other means during the preceding twelve months;
(ii) Maintains, in an easily accessible
place, for a period of not less than five
years from the filing of a Form ADV
that includes a representation that the
adviser is eligible to register with the
Commission under paragraph (f) of this
section, a record demonstrating that it
provides investment advice to its clients exclusively through an interactive
website in accordance with the limits
in paragraph (f)(1)(i) of this section;
and
(iii) Does not control, is not controlled by, and is not under common
control with, another investment adviser that registers with the Commission under paragraph (c) of this section
solely in reliance on the adviser registered under paragraph (f) of this section as its registered adviser.
(2) For purposes of paragraph (f) of
this section, interactive website means a
website in which computer softwarebased models or applications provide
investment advice to clients based on
personal information each client supplies through the website.
(3) An investment adviser may rely
on
the
definition
of
client
in
§ 275.203(b)(3)–1 in determining whether
it provides investment advice to fewer

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Securities and Exchange Commission

§ 275.204–1

than 15 clients under paragraph (f)(1)(i)
of this section.

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[62 FR 28133, May 22, 1997, as amended at 63
FR 39715, 39716, July 24, 1998; 65 FR 57450,
Sept. 22, 2000; 67 FR 77625, Dec. 18, 2003]

§ 275.203A–3 Definitions.
For purposes of section 203A of the
Act (15 U.S.C. 80b–3a) and the rules
thereunder:
(a)(1) Investment adviser representative.
‘‘Investment adviser representative’’ of
an investment adviser means a supervised person of the investment adviser:
(i) Who has more than five clients
who are natural persons (other than excepted persons described in paragraph
(a)(3)(i) of this section); and
(ii) More than ten percent of whose
clients are natural persons (other than
excepted persons described in paragraph (a)(3)(i) of this section).
(2) Notwithstanding paragraph (a)(1)
of this section, a supervised person is
not an investment adviser representative if the supervised person:
(i) Does not on a regular basis solicit,
meet with, or otherwise communicate
with clients of the investment adviser;
or
(ii) Provides only impersonal investment advice.
(3) For purposes of this section:
(i) ‘‘Excepted person’’ means a natural person who is a qualified client as
described in § 275.205–3(d)(1).
(ii) ‘‘Impersonal investment advice’’
means investment advisory services
provided by means of written material
or oral statements that do not purport
to meet the objectives or needs of specific individuals or accounts.
(4) Supervised persons may rely on
the
definition
of
‘‘client’’
in
§ 275.203(b)(3)–1, without giving regard
to paragraph (b)(6) of that section, to
identify clients for purposes of paragraph (a)(1) of this section, except that
supervised persons need not count clients that are not residents of the
United States.
(b) Place of business. ‘‘Place of business’’ of an investment adviser representative means:
(1) An office at which the investment
adviser representative regularly provides investment advisory services, solicits, meets with, or otherwise communicates with clients; and

(2) Any other location that is held
out to the general public as a location
at which the investment adviser representative provides investment advisory services, solicits, meets with, or
otherwise communicates with clients.
(c) Principal office and place of business. ‘‘Principal office and place of
business’’ of an investment adviser
means the executive office of the investment adviser from which the officers, partners, or managers of the investment adviser direct, control, and
coordinate the activities of the investment adviser.
[62 FR 28134, May 22, 1997, as amended at 63
FR 39715, July 24, 1998; 69 FR 72088, Dec. 10,
2004]

§ 275.203A–4 Investment advisers registered with a State securities commission.
The Commission shall not assert a
violation of section 203 of the Act (15
U.S.C. 80b–3) (or any provision of the
Act to which an investment adviser becomes subject upon registration under
section 203 of the Act (15 U.S.C. 80b–3))
for the failure of an investment adviser
registered with the securities commission (or any agency or office performing like functions) in the State in
which it has its principal office and
place of business to register with the
Commission if the investment adviser
reasonably believes that it does not
have assets under management of at
least $30,000,000 and is therefore not required to register with the Commission.
[62 FR 28134, May 22, 1997]

§§ 275.203A–5—275.203A–6

[Reserved]

§ 275.204–1 Amendments to application
for registration.
(a) When amendment is required. You
must amend your Form ADV (17 CFR
279.1):
(1) At least annually, within 90 days
of the end of your fiscal year; and
(2) More frequently, if required by
the instructions to Form ADV.
NOTE TO PARAGRAPH (a): Information on
how to file with the Investment Adviser Registration Depository (‘‘IARD’’) is available
on our website at www.sec.gov/iard.

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