Source: http://jimhamiltonblog.blogspot.com/2011/03/texas-adopts-new-part-2-of-form-adv.html
Timestamp: 2017-03-30 20:31:03
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Jim Hamilton’s World of Securities Regulation: Texas Adopts New Part 2 of Form ADV
New Part 2 of Form ADV was adopted by the Texas Securities Board for use by investment adviser applicants and registrants, effective March 9, 2011.Initial application. An initial investment adviser registration application consists of items electronically submitted through the IARD including a Form ADV, Uniform Investment Adviser Registration Application, a Form U-4, Uniform Application for Securities Industry Registration or Transfer, for the designated officer and for each investment adviser representative or solicitor to be registered, along with a disclosure document or Part 2 of Form ADV, and the registration fee of $275 for the investment adviser and $235 for the designated officer and each investment adviser representative to be registered. The items filed in paper format directly with the Securities Commissioner are a copy of the particular entity's articles, a prescribed balance sheet, a copy of the investment adviser's advisory contract, a fee schedule and any other information considered necessary for the Securities Commissioner to determine the investment adviser’s financial responsibility and/or the investment adviser's or investment adviser representatives’ business repute or qualification. NOTE: Uniform forms electronically filed with the IARD designating Texas as a jurisdiction where filing will be made are considered "filed" with the Securities Commissioner and constitute official Securities Board records.Post-registration reporting. Texas-registered investment advisers must update their Form ADV Part 2 or disclosure document as part of any amendment or annual updating amendment. An "annual updating amendment" is an amendment to an investment adviser's Form ADV filed within 90 days after the investment adviser's fiscal year-end that is used to update the responses to any item containing inaccurate information.Disclosure "brochure rule" requirement. Texas-registered investment advisers are required to deliver to their existing and prospective clients a written disclosure statement that may be either: (1) Part 2 of Form ADV or another disclosure statement containing at least the information disclosed on Part 2 of Form ADV; or (2) a disclosure statement containing at least the information required by the Part 2A Appendix of Form ADV, if the investment adviser is the sponsor and portfolio manager of a wrap fee program the client will enter into. Investment advisers must annually provide their clients with Part 2 of Form ADV or a disclosure statement, or alternatively offer their clients the right to receive Part 2 or the disclosure statement.Investment advisory contract. Investment advisory contracts need to contain specified language whereby a client acknowledges having received either a Part 2 of Form ADV, a disclosure statement containing the equivalent information or a disclosure statement containing at least the information required by the Part 2A Appendix of Form ADV, if the client is entering into a wrap fee program sponsored by the investment adviser. Clients not having been delivered the appropriate disclosure document within 48 before entering into an oral or written advisory contract may terminate the contract, without penalty, within five business days after entering into it.