Apply Adviser Registration Rules - Series 65

1. Identify the regulator for an adviser with AUM of $105$ million that is already SEC-registered and remains eligible to stay.

   The SEC (within the $100$–$110$ million buffer zone). Buffer zone eligibility allows continued SEC registration for advisers in that AUM range.

2. What AUM level generally requires state registration (rather than SEC) for an investment adviser?

   Less than $100$ million in AUM. Advisers below $100$ million AUM fall under state jurisdiction for registration to ensure local regulatory compliance.

3. What is the AUM "buffer zone" in which an adviser may remain with its current regulator if otherwise eligible?

   $100$ million to $110$ million in AUM. The buffer allows advisers to maintain current registration status without mandatory switching for stability.

4. Which regulator generally registers an adviser with a principal office in a state and AUM of $85$ million?

   The state securities administrator. With AUM below $100$ million, state registration applies as the adviser does not meet SEC thresholds.

5. Under the Uniform Securities Act de minimis exemption, what is the maximum number of non-institutional clients allowed in a state?

   No more than $5$ clients in $12$ months. The Uniform Securities Act exempts advisers with limited clients to reduce regulatory burden.

6. What is the general rule for registering an investment adviser representative (IAR) of a state-registered adviser?

   Register in each state where the IAR has a place of business. IAR registration is required in states with a physical presence to ensure local oversight.

7. What is "registration by coordination" most closely associated with under securities regulation concepts?

   Securities offerings, not investment adviser registration. Coordination aligns state securities registrations with federal filings for efficiency in offerings.

8. What is "notice filing" as it relates to SEC-registered (federal covered) investment advisers and states?

   State filing of Form ADV and fee; no state registration. Federal covered advisers submit Form ADV copies and fees to states for notice without full registration.

9. What is the brochure delivery requirement for an adviser's Form ADV Part $2$A to clients?

   Deliver at or before entering the advisory contract. Initial delivery of Part 2A ensures clients receive key firm information before advisory services begin.

10. What is the state's authority over an SEC-registered adviser after notice filing?

    Enforcement and antifraud authority (not registration). States retain authority to enforce antifraud rules over federal advisers post-notice filing.

11. What is the general registration rule for an investment adviser with no place of business in a state and few clients there?

    Often exempt from state registration under the de minimis rule. De minimis exemptions prevent unnecessary registration for advisers with minimal state presence.

12. Identify whether a state-registered adviser must register in a second state where it has $6$ retail clients in $12$ months.

    Yes; exceeds the $5$-client de minimis limit. Exceeding the de minimis threshold triggers registration to protect state residents.

13. What is the Form ADV update rule when information becomes materially inaccurate?

    Promptly file an amendment (as soon as practicable). Material inaccuracies require immediate updates to maintain accurate disclosure to regulators and clients.

14. Which filing terminates an investment adviser's SEC registration when the firm ceases business as an adviser?

    Form ADV-W (withdrawal from registration). Form ADV-W officially ends registration when an adviser no longer operates in that capacity.

15. Which option best identifies the filing system used for investment adviser registration and amendments?

    IARD (Investment Adviser Registration Depository). IARD facilitates electronic filing for efficient registration and maintenance processes.

16. What is the annual brochure delivery requirement for Form ADV Part $2$A to existing clients?

    Offer (or deliver) annually within $120$ days of fiscal year-end. Annual offers keep existing clients informed of any updates to the adviser's brochure.

17. What is the SEC filing used by an investment adviser to register under the Investment Advisers Act of 1940?

    Form ADV (filed electronically through IARD). The Investment Advisers Act of 1940 mandates Form ADV for SEC registration, filed via IARD to provide comprehensive firm details.

18. What is the usual state rule for IAR registration when an IAR has no place of business in the state and limited clients?

    Often exempt if no place of business and no more than $5$ clients. States exempt IARs with minimal activity to avoid overregulation of interstate advice.

19. What document describes supervised persons, their backgrounds, and disciplinary history for client-facing personnel?

    Form ADV Part $2$B (brochure supplement). Part 2B provides clients with details on advisers' qualifications and histories for informed decisions.

20. What is the effect of filing Form ADV-W for an SEC-registered investment adviser?

    Requests withdrawal; obligations may continue for records/exams. Filing ADV-W initiates withdrawal while preserving regulatory duties for compliance continuity.

21. What is the typical timing requirement to deliver a brochure supplement (Part $2$B) to a client?

    At or before the supervised person begins providing advice. Delivery timing ensures clients receive personnel information prior to receiving investment advice.

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