Source: https://securities.sos.in.gov/general-information/investment-adviser/
Timestamp: 2020-02-17 15:41:09
Document Index: 246559065

Matched Legal Cases: ['§ 23', 'art 1', 'art 2', 'art 1', 'art 2', 'art 2', 'art 2', 'art 2']

Investment Adviser · Securities Portal
Under Indiana law, an investment adviser is “a person that, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or the advisability of investing in, purchasing, or selling securities or that, for compensation and as a part of a regular business, issues or promulgates analyses or reports concerning securities.” There is no requirement that the business consist solely of providing investment advisory services. If, as part of their business, a person provides recommendations regarding securities to a client for compensation, the person may satisfy the definition and registration would be required. If a person is exempt or otherwise excluded from the definition of investment adviser under Ind. Code § 23-19-1-2(15), then registration is not required.
Investment advisers conducting business or with a place of business in Indiana must register with either the Indiana Secretary of State, Securities Division (“Division”) or the Securities and Exchange Commission (“SEC”). The amount of assets under management (“AUM”) determines the agency under which the investment adviser registers. An investment adviser may register with the SEC once it has one hundred million dollars ($100,000,000) in AUM. When the investment adviser reaches one hundred and ten million dollars ($110,000,000) in AUM, the investment adviser is required to register with the SEC. Once registered with the SEC, the investment adviser would only be required to register with the Division if the AUM are less than ninety million dollars ($90,000,000). If a company is registered with the SEC, it is only required to file a notice filing with the Division.
All filings are made and fees are paid through the Investment Adviser Registration Depository ("IARD") and Central Registration Depository (“CRD”) systems managed by the Financial Industry Regulatory Authority (“FINRA”). Any business registering with the Division needs an IARD number.
Under Indiana law, an investment adviser representative is “an individual employed by or associated with an investment adviser or federal covered investment adviser and who makes any recommendations or otherwise gives investment advice regarding securities, manages accounts or portfolios of clients, determines which recommendation or advice regarding securities should be given, provides investment advice or holds herself or himself out as providing investment advice, receives compensation to solicit, offer, or negotiate for the sale of or for selling investment advice, or supervises employees who perform any of the foregoing.” There is no requirement that the individual’s business consist solely of providing investment advisory services. If an individual, as part of their business, provides recommendations regarding securities to a client for compensation, the individual may satisfy the definition and registration would be required. Individuals that are exempt or excluded from the definition are not required to register as an investment adviser representative.
In order to become registered in Indiana, an investment adviser representative must pass the requisite examinations. An investment adviser representative must pass either the Uniform Investment Adviser Law Examination (Series 65); or the applicable required FINRA examination(s) and the Uniform Combined State Law Examination (Series 66). An investment adviser representative may apply for a waiver of these examination requirements by submitting a Waiver Request to the Division.
All filings are made and fees are paid through the IARD and CRD systems managed by FINRA. Any individual registering with the Division needs a CRD number.
The non-refundable initial filing fee is one hundred dollars ($100) and is paid through FINRA.
Each investment adviser must have at least one investment adviser representative registered with the investment adviser.
Form ADV Part 1 and Part 2 must be filed online through the IARD system with the filer requesting registration in Indiana.
The Division will provide the investment adviser with a Portfolio number (Investment Adviser - P - ######) upon receipt of the application from FINRA.
The Division will require the investment adviser’s current balance sheet.
If the balance sheet is audited, it should be as of the investment adviser’s last fiscal year end. Unaudited balance sheets must not be older than sixty (60) days. The Division does not accept balance sheets showing zeros for all assets and liabilities.
Firms that have custody of client funds or securities, or bill clients more than five hundred dollars ($500) in advance, must submit an audited balance sheet.
Additional requirements exist for investment advisers that maintain custody of client funds or securities. The Statement of Policy and the Amended Statement of Policy detail the requirements for firms with custody.
Send copies of all agreements and/or contracts that the investment adviser will offer to Indiana clients (i.e. investment advisory, financial planning, consulting, portfolio management, etc.). Each agreement must disclose the specific fees (fixed, hourly, one-time fees, percentage of AUM, etc.) that may be charged. The fee information in the agreements must conform to the fee information disclosed in the Form ADV Part 1 and Part 2.
If the investment adviser is located outside of Indiana, at a location other than the main office, or the books and records will be maintained at another location, complete the Books and Records Location form.
Approved registrations expire on December 31. In order to continue operating its business, an investment adviser must submit a renewal registration and pay any associated fees.
The non-refundable renewal filing fee is fifty dollars ($50) and is paid through FINRA.
Renewals are handled through the IARD and CRD registration systems. It is vital to pay attention to the system’s annual Renewal Calendar to ensure that a renewal is submitted prior to any FINRA system shutdown.
Investment Adviser Operation
Investment advisers are required to meet certain continuing obligations and requirements in order to operate in Indiana. These obligations and requirements are in addition to any federal guidelines that may affect the operation of the business. The requirements and obligations relate to the records maintenance, supervision, fee management, disclosures, contract offerings to clients, custody of clients funds or securities, among many other topics. The requirements and obligations for investment advisers are detailed in the Indiana Code and the Indiana Administrative Code. If there are questions regarding whether an investment adviser’s activities comply with the outlined obligations, consult legal counsel or a compliance consultant.
Investment advisers must submit responses to the Annual Questionnaire upon initial registration and annually by March 31. Responses to the Annual Questionnaire must be submitted online.
The Senior Savings Protection legislation seeks to protect senior citizens and other financially vulnerable adults, by requiring investment advisers to report instances of suspected financial exploitation.
Under Indiana law, the Division has the authority to examine investment advisers in Indiana for compliance with the Indiana Code and Indiana Administrative Code. The Investment Adviser Examination Process and Procedures details the Division’s examination structure.
In order to become registered in Indiana, an investment adviser representative must pass the requisite examinations. If the investment adviser representative is eligible for a waiver of the examination requirements, the individual may submit a Waiver Request to the Division.
Individuals seeking to become as an investment adviser representative must register on CRD by submitting a Form U-4.
Individuals are required to submit fingerprints for a criminal background check. If the individual is also registered as a broker-dealer agent, additional fingerprints are not required.
Fingerprints must be submitted electronically using the IdentoGo system.
When submitting fingerprints on the IdentoGo system, make sure to identify the “Indiana Secretary of State, Securities Division” (Agency #: IN 0493000) as the agency requiring the fingerprints.
Approved registrations expire on December 31. In order to continue operating as an investment adviser representative, the individual must submit a renewal registration and pay any associated fees.
As renewals are handled through the IARD and CRD registration systems, it is vital to pay attention to the system’s annual Renewal Calendar to ensure that a renewal is submitted prior to any FINRA system shutdown.
Indiana Administrative Code [710 IAC 4-9]
Investment Adviser and Investment Adviser Representative Examinations [18-0003 AO - January 25, 2018]
Investment Adviser Form ADV and Form ADV Part 2 Requirements [17-0001 AO - February 15, 2017]
Updated Private Equity/Venture Capital Funds and Investment Adviser Registration [12-0012 AO - January 9, 2012]
Performance Management Fees for Investment Advisers to Certain Private Companies [11-0266 AO - August 29, 2011]
Filing of ADV Part 2 for Investment Advisers [10-0478 AO - November 16, 2010]
Federal Covered Advisers [97-0223 AO - September 17, 1997]
Statement of Policy Regarding Custody Requirements of Investment Advisers with Standing Letters of Authorization (“SLOA”) Arrangements [October 4, 2018]
Amended Statement of Policy Regarding Investment Advisers with Custody of Client Funds [October 21, 2015]
Statement of Policy Regarding Investment Adviser Form ADV Part 2 [October 7, 2010]
Amended Statement of Policy Regarding Private Equity/Venture Capital Funds and Investment Adviser Registration [July 10, 2008]
Statement of Policy Regarding Investment Adviser Disclosure [March 23, 2006]
2020 Annual Questionnaire (Hyperlink)
2020 Annual Questionnaire (PDF)
Books and Records Location
Investment Adviser Examination Process and Procedures
Investment Adviser Initial Registration Requirements
Investment Adviser Resources (NASAA)
Investment Adviser Solicitor Information
Doreen Fuery
dfuery@sos.in.gov
317-232-0737
rneff@sos.in.gov
317-232-0736
Will Brainard
wbrainard@sos.in.gov
317-232-6683