<<Prev Rule

Texas Administrative Code

Next Rule>>
TITLE 7BANKING AND SECURITIES
PART 7STATE SECURITIES BOARD
CHAPTER 116INVESTMENT ADVISERS AND INVESTMENT ADVISER REPRESENTATIVES
RULE §116.2Application Requirements

(a) Investment adviser and investment adviser representative application requirements. A complete application consists of the following:

  (1) items filed electronically via the Investment Adviser Registration Depository (IARD), which is jointly operated by the North American Securities Administrators Association, Inc. (NASAA), the Securities and Exchange Commission (SEC), and Financial Industry Regulatory Authority (FINRA) using the applicable uniform forms:

    (A) Form ADV;

    (B) Form U-4 for the designated officer and a Form U-4 for each investment adviser representative or solicitor to be registered;

    (C) disclosure document or Part 2 of Form ADV; and

    (D) the appropriate registration fee(s).

  (2) items filed in paper form with the Securities Commissioner:

    (A) a copy of articles of incorporation, partnership agreement, articles of association, trust agreement, or other documents which indicate the form of organization, certified by the jurisdiction or by an officer or partner of the applicant;

    (B) a balance sheet prepared in accordance with United States generally accepted accounting principles reflecting the financial condition of the investment adviser as of a date not more than 90 days prior to the date of such filing. The balance sheet should be compiled, reviewed, or audited by independent certified public accountants or independent public accountants, or must instead be attested by the sworn notarized statement of the applicant's principal financial officer. If attested by the principal financial officer of the applicant, such officer shall make the certification on Form 133.18, Certification of Balance Sheet by Principal Financial Officer.

    (C) a copy of the investment adviser's standard advisory contract;

    (D) fee schedule; and

    (E) any other information deemed necessary by the Securities Commissioner to determine an investment adviser's financial responsibility or an investment adviser's or investment adviser representative's business repute or qualification.

(b) Designated officer registration. Investment advisers, including an individual filing as a sole proprietor, must file a Form U-4 application for a designated officer to register in connection with the registration of the investment adviser. The investment adviser's designated officer must be an officer, partner, or the sole proprietor of the investment adviser and have completed the necessary registration and examination requirements. If the designated officer of an investment adviser, other than a sole proprietor, resigns or is otherwise removed from his or her position, the investment adviser shall make an application to register another officer or partner within 30 days.

(c) Branch office registration and inspection. A request for registration of a branch office of an investment adviser may be made upon initial application of the investment adviser or by amendment to a current registration. No investment advisory activity may occur in any branch office location until such time as the investment adviser receives notification from the Securities Commissioner that such location has been approved as a branch office. The request for registration of a branch office is made by the submission of Form BR on CRD. The fee for registration of each branch office is $25. Simultaneous with the request for registration of a branch office, a supervisor must be named. The supervisor must satisfy the examination qualifications required of the investment adviser before the branch office may be registered. A supervisor is responsible for supervision of the activities of the branch office. Within 10 business days from when a supervisor ceases to be employed or registered in such capacity by the investment adviser, a new supervisor, qualified by passage of the appropriate examinations, must be named. Absent the designation of a new supervisor to the Commissioner within the 10 business day period, the registration of a branch office whose supervisor ceases to be employed as such by an investment adviser shall be automatically terminated. The branch office registration may be reinstated upon the designation of a qualified supervisor and payment of the branch office registration fee. Each branch office registered with the Commissioner is subject to unannounced inspections at any time during normal business hours.

(d) Automatic withdrawal of an investment adviser or investment adviser representative application for registration that has been pending for at least 90 days. If an application for investment adviser or investment adviser representative registration has been pending for at least 90 days and the applicant has failed to substantively respond to a written request for information sent by certified mail to the applicant's address as set forth in the application, an automatic withdrawal will occur. The written request must have advised the applicant that if a substantive response is not received within 30 days from the date of the certified request, the application will be withdrawn automatically. Regardless of how long an application has been pending, it may not be withdrawn automatically without sending certified notice of this subsection to the address set forth in the application and allowing the applicant 30 calendar days from the date of the notice to provide a substantive written response. A copy of this subsection and the most recent written request for information will be included with the certified letter.

(e) Investment Adviser Registration Depository (IARD). Uniform forms submitted through the IARD that designate Texas as a jurisdiction in which the filing is to be made are deemed to be filed with the Securities Commissioner and constitute official records of the Board.


Source Note: The provisions of this §116.2 adopted to be effective August 12, 2001, 26 TexReg 5799; amended to be effective November 26, 2001, 26 TexReg 9582; amended to be effective March 6, 2002, 27 TexReg 1475; amended to be effective January 8, 2006, 30 TexReg 8868; amended to be effective April 2, 2006, 31 TexReg 2846; amended to be effective February 21, 2008, 33 TexReg 1319; amended to be effective March 9, 2011, 36 TexReg 1473; amended to be effective August 18, 2011, 36 TexReg 5095; amended to be effective October 6, 2015, 40 TexReg 6889

Link to Texas Secretary of State Home Page | link to Texas Register home page | link to Texas Administrative Code home page | link to Open Meetings home page