| (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 certified by
the applicant's principal financial officer. If certified 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 designation and inspection.
(1) An investment adviser may designate a branch office
upon initial application of the investment adviser or by amendment
to a current Form BR. No investment advisory activity may occur in
any branch office location until such time as the investment adviser
has notified the Securities Commissioner that such location will function
as a branch office by submitting Form BR on CRD.
(2) Simultaneous with the designation of a branch office,
a supervisor must be named for that branch office. The supervisor
must satisfy the examination qualifications required of the investment
adviser before the branch office is designated. A supervisor is responsible
for supervision of the activities of the branch office. Within 10
business days after a supervisor ceases to be employed or registered
in such capacity by the investment adviser, the investment adviser
must designate a new supervisor, qualified by passage of the appropriate
examinations, for the branch office.
(3) Each branch office of an investment adviser who
is 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.
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| 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; amended to be effective November 12, 2019, 44 TexReg 6861 |
