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Frequently Asked Questions on Form ADV and IARD
FORM ADV (Read the General Instructions to Form ADV, Glossary, and the Instructions for Part 1A of Form ADV for important information about SEC registration and Form ADV.)
Using IARD (Consult FINRA's website www.IARD.com for additional information on how to make electronic filings on IARD.)
Note: Frequently Asked questions related to using IARD also can be found on FINRA's IARD website and at NASAA's website.
FORM ADV
Filing and Other Fees
| Q: | What are the fees for filing on IARD? |
| A: | Fees are charged based on your firm's assets under management. Fees must be credited to your firm's Daily Account before you can submit your filing. No fees are charged for filing an electronic amendment to Form ADV unless it is an Annual Updating Amendment. No fee is charged for electronically filing Form ADV-W.
Assets
Under Management |
Initial
Set-Up Fee |
Annual
Updating Fee |
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| More than $100 million |
$1,100 |
$550 |
| $25 million to $100 million |
$800 |
$400 |
| Less than $25 million |
$150 |
$100 |
The Commission has approved a two-year waiver of initial set-up and annual IARD filing fees for investment advisers registered with the Commission or applying for registration with the Commission. (Commission Order) SEC-registered investment advisers will not have to pay the fee associated with their annual amendments filed from November 1, 2006 through October 31, 2008. For the same period, investment advisers filing with the Commission for initial registration on the IARD will not have to pay the initial set-up fee.
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| Q: | Why are we being charged filing fees for using IARD? |
| A: | Filing fees are being charged to cover the costs and maintenance of IARD. |
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| Q: | Are state Notice Fees included in the IARD filing fee? |
| A: | No. The IARD filing fee does not include state Notice Fees. State Notice Filing Fees are separate fees charged by state regulatory authorities. However, you will pay your state Notice Filing Fees through IARD when filing electronically. |
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| Q: | I need to make Notice Filings with another state. How do I do this on the electronic Form ADV? Is there a filing fee? |
| A: | If you want a state to receive Notice Filings, check the box next to the appropriate state under Item 2B of Part I of Form ADV. Most states charge advisers a filing fee for making Notice Filings with them. You will pay the state filing fee through IARD which passes your payment to the state securities authority where your filing is made. Be sure you have sufficient funds in your IARD Financial Account to pay the state filing fee before you try to submit your Form ADV amendment. A list of state filing fees can be found on www.iard.com (scroll down on the homepage to IARD State Fee Schedule) or you can call the appropriate states securities authority for state filing fee information. |
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| Q: | I am a pension consultant who relies on Rule 203A-2(b) under the Investment Advisers Act of 1940 to register with the SEC. I provide pension consulting services to plans with assets in excess of $50,000,000, but I have no assets under management to report in Item 5.F of Form ADV. What is my level of fees for IARD? |
| A: | Your fees are based on assets under management, even if your assets under management are not the basis of your eligibility for SEC registration. The IARD automatically determines the amount of your fees based on your answer to Item 5.F(c) of Form ADV – total assets under management. |
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Hardship Filings
| Q: | I do not own or have use of a computer to make an electronic filing. What should I do? |
| A: |
You have three options:
- Any Computer. You may use any computer to fill out and submit your Form ADV on IARD. Thus, you could fill out and submit your Form ADV at a public library or any other place that provides public access to a computer.
- Service Bureaus. Service bureaus will file your Form ADV for you, for a fee. A list of service bureaus is on the SEC's website at http://www.sec.gov/iard.
Warning: We do not endorse any of these service bureaus. We list their names only for the convenience of investment advisers.
Continuing Hardship Exemption. If you are a "small business," you may qualify for a Continuing Hardship Exemption. An investment adviser generally is a small business if it (a) manages assets of less than $25 million, (b) has total assets of $5 million or less, and (c) is not in a control relationship with another investment adviser that is not a small business. To request a Continuing Hardship Exemption, you must file Form ADV-H (on paper) with the SEC. If your Continuing Hardship Exemption is granted, you will send a paper version of your Form ADV to FINRA, who will key in your filing for a fee.
However, even if you are a "small business," we would encourage you to hire a service bureau rather than request a Continuing Hardship Exemption. We believe that using a service bureau will be administratively easier for you and also will be less expensive.
To obtain a copy of Form ADV-H, call SEC Publications at (202) 551-4041. The form also is available on www.sec.gov under "Forms, Policy and Law."
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| Q: | How do I apply for a Temporary Hardship Filing? |
| A: | A Temporary Hardship Filing extends an adviser's electronic filing deadline for seven business days. It is available when unexpected difficulties (such as a computer malfunction or an electrical outage) prevent an adviser from meeting a filing deadline. The Temporary Hardship Filing is granted automatically to any SEC registered adviser that files Form ADV-H with the SEC. Mail Form ADV-H to the U.S. Securities and Exchange Commission, Office of Registrations and Examinations, Mail Stop 0-25, 100 F Street, NE, Washington DC 20549. |
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Registration With the SEC
| Q: | I am planning to register with the SEC and want to know how to set up an IARD Account. |
| A: | You can find the IARD Entitlement Forms and related information under "How To Register" on this website. You can also check FINRA's webpage http://www.iard.com. |
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State Issues
| Q: | I have a question about state law requirements for registering as an investment adviser and IARD. |
| A: | You should contact the state securities authority in each state where you are doing business or intend to do business to learn about applicable state law requirements. You also may contact NASAA (the North American Securities Administrators Association) at 202-737-0460. NASAA lists contact information for all state securities authorities on its website http://www.NASAA.org. |
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| Q: | Do I have to continue to send paper copies of Notice Filings to states authorities once I make my initial electronic Form ADV filing using IARD? |
| A: | We understand that all the states will accept an electronic Notice Filing of Part 1 through IARD. Each Notice Filing is sent electronically to those states you designate on Form ADV. Some states, however, may require that you send them a paper copy of Part II. |
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| Q: | How do I know with which states my firm is registered? |
| A: | After you have submitted your Form ADV on IARD, click on "Registration Status" under "View Organization" on the main menu to see the list of states where your firm is registered as an adviser and the status of any registration applications. |
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Type of Filing
| Q: | I want to register with the SEC. What "type of filing" should I enter when I begin completing my Form ADV filing? |
| A: | Your should enter "Apply for registration as an investment adviser with the SEC." Do not use any other category. |
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| Q: | I don't know what "type of filing" category to enter. |
| A: | Your electronic filing will be either an "Annual Updating Amendment" or an "Other-Than-Annual Amendment." You should select Annual Updating Amendment if you are filing within 90 days of your fiscal year end. If you are not filing the electronic Form ADV within 90 days after your fiscal year, your initial electronic Form ADV filing must be designated as an Other-Than-Annual Amendment. |
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| Q: | Should I submit a transition filing for my adviser firm? |
| A: | SEC-registered advisers were required to transition their Form ADV filings to the IARD by April 30, 2001. The SEC cancelled the registrations of firms that did not submit a transition filing by that date. If you did not transition your SEC registration during 2001 and are unsure whether your firm's SEC registration has been cancelled, please call the SEC at 202-551-7250. |
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Name Change
| Q: | We changed our name after we sent in our IARD Entitlement Forms. What should we do to have our new name reflected on IARD? |
| A: | If an adviser changes its name after sending in IARD Entitlement Forms, the new name should be entered in Item 1.C of the electronic Form ADV. |
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Q: | How do I change the name of my firm? |
| A: | To change the name of your firm on Form ADV, complete the following steps;
- Select ADV, new filing on the site.
- Click on Submit An Other-Than-Annual Amendment or Submit An Annual Updating Amendment (only if this filing is going to include the firm's annual updated information and the filing is done with in 90 days after the firm s fiscal year end).
- Select Item 1- Identifying Information on the navigation panel.
- Put a check in the box under Item C indicating whether this is going to be a change to the firm's legal name and/or primary business name.
- Type in the new name and press the Save button.
- Type in an execution page and Save.
- Click on Submit Filing on left hand navigation panel.
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Glossary of Terms
| Q: | Where can I find explanations for terms used in Form ADV? |
| A: | Words that appear in italics on Form ADV are defined in the Glossary of Terms to Form ADV.
If you are filling out Form ADV on line, you can access the Glossary of Terms by clicking on the yellow question mark in the top right-hand corner of the screen.
In the paper version of Form ADV (available at www.sec.gov/iard under "Forms, Policy and Law"), the Glossary of Terms appears after the Instructions to Form ADV. |
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High Net Worth Individuals
| Q: | What is the definition of a "high net worth individual"? |
| A: | Words that appear in italics on Form ADV are defined in the Glossary of Terms to Form ADV.
If you are filling out Form ADV on line (at www.webiard.com/iad), you can access the Glossary of Terms by clicking on the yellow question mark in the top right-hand corner of the screen.
In the paper version of Form ADV (available at www.sec.gov/iard under "Forms, Policy and Law"), the Glossary of Terms appears after the Instructions to Form ADV.
The Form ADV Glossary of Terms explains that a "high net worth individual" is an individual with at least $750,000 managed by you, or whose net worth your firm reasonably believes exceeds $1,500,000, or who is a "qualified purchaser" as defined in section 2(a)(51)(A) of the Investment Company Act of 1940. The net worth of an individual may include assets held jointly with his or her spouse. |
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Form ADV: Item 1.B
| Q: | The IARD system has automatically pre-populated my advisory firm's legal name in Item 1.B, which requests a firm's name under which it primarily conducts business if different from the adviser's legal name. We do not have separate name under which we primarily conduct business. |
| A: | The IARD system automatically lists an adviser's legal name in both Item 1.A and Item 1.B if the adviser does not have a separate name under which it primarily conducts business. You can leave the response to Item 1.B as is. If the same name is listed in Item 1.A and Item 1.B, it will inform both the SEC and the state securities authorities that an adviser does not have a separate name under which it primarily conducts business. |
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Form ADV: Item 1.F
| Q: | I am completing Form ADV for an SEC-registered adviser. The adviser conducts advisory business from many offices. I want to list more than five offices in response to Item 1.F. |
| A: | If you want to list more than five offices, you may. However, Item 1.F only requires that the largest five offices (on the basis of number of employees) conducting advisory business be listed, in addition to the adviser's principal office and place of business. |
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Form ADV: Item 1.K
| Q: | We keep a complete set of our books and records at our principal office and place of business. We keep some duplicate books and records at an offsite location. Do we have to list this offsite location on Section 1.K of Schedule D? |
| A: | No. You do not need to list locations that hold only duplicate books and records. We need to know where our examination staff can obtain a complete set of your books and records. If books and records housed in multiple locations together create a complete set of your books and records, you must list each of those locations on Section 1.K of Schedule D. |
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| Q: | My advisory firm is a very large firm with hundreds of branch offices throughout the country. We keep most of our books and records at a small number of central locations. However, each branch office maintains some of its own records. Do I have to list each of our branch offices in Section 1.K of Schedule D? |
| A: | Not necessarily. You must list the main locations where your advisory firm's records are stored. If you also keep records in branch office locations, you should list them all (see the answer to the previous question). If the list would be extremely long, we would not object if you do not list every office that keeps only a small set of records. You must, however, make all records available to Commission staff upon request. |
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Form ADV: Item 5.C
| Q: | My advisory firm serves as a portfolio manager under a wrap fee program. For purposes of counting the number of our clients to which we provided investment advisory services in the last fiscal year, should I count the wrap fee program itself as one client or should I count each of the participants in the wrap fee program as clients? |
| A: | Each wrap fee program participant to whom you provided investment advisory services should be counted as a client. |
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| Q: | How should I count clients for purposes of Item 5.C? For example, should a family be counted as a single client or multiple clients? How should I count a family trust set up for that family? If I provide advisory services to an individual for her own account and also provide advice regarding her IRA account, should I treat them as one or two clients? |
| A: | When answering Item 5.C, count clients the way you normally count them for your firm. Some advisers, for example, treat multiple members of the same family (and a family trust) as a single client, and other advisers treat multiple members of the same family (and a family trust) as separate clients. Similarly, an adviser could reasonably treat an individual and the individual's IRA account as one--or two--clients, depending on the circumstances. |
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| Q: | Can I follow rule 203(b)(3)-1 under the Investment Advisers Act of 1940 when counting clients for purposes of Item 5.C of Form ADV? |
| A: | Yes. Rule 203(b)(3)-1 provides a safe harbor to investment advisers who are relying on the fewer-than-15-clients exception to the registration requirements of the Investment Advisers Act of 1940. While you may rely on rule 203(b)(3)-1, you are not required to follow it. In addition, you should note that the rule permits advisers to disregard clients who do not compensate the adviser, when counting clients to meet the fewer-than-15 clients exception. The definition of "client" for Form ADV, however, makes clear that advisers must count clients who do not compensate the adviser. |
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Form ADV: Item 5.D
| Q: | My advisory firm serves as a portfolio manager under a wrap fee program. For purposes of determining the types of our clients in response to Item 5.D, should I view the wrap fee program itself as one client or should I disclose the types of participants in the wrap fee program? |
| A: | To determine your types of clients, treat each wrap fee program participant to whom you provided advisory services as a client. |
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Form ADV: Item 6.A
| Q: | My advisory firm is a separate subsidiary of a bank. Item 6.A(6) asks whether we are actively engaged in business as a bank -- should I mark Item 6.A(6) to indicate that we are? |
| A: | No, not if your firm is a separate subsidiary. Item 6.A(6) asks if you, the registrant, are a bank. You are not a bank; your parent organization is the bank. If your parent organization (or any other of your related persons) is a bank, you should check the box in Item 7.A(5), but not Item 6.A(6).
However, if you are a separately identifiable department or division of a bank, you must check the box in Item 6.A(6). |
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Form ADV: Item 7.A
| Q: | My advisory firm is part of a large organization that has hundreds of related persons who meet the definition of investment adviser under the Investment Advisers Act of 1940. My firm has no interaction with some of these related investment advisers. Do I still have to list them on Section 7.A of Schedule D? | | A: | You (registered investment adviser) can omit a related adviser from Section 7.A of Schedule D if (1) you have no business dealings with the related adviser, (2) you do not conduct joint operations with the related adviser, (3) you do not provide advice that is formulated, in whole or in part, by the related adviser and (4) the related adviser does not present any potential for conflict of interest with your clients. If you have related advisers who are not listed on Section 7.A of Schedule D, you should use the Miscellaneous Section of Schedule D to state that you have a supplementary list of related investment advisers who are not listed in Section 7.A (and why they are not listed), and that you will provide a copy of that list upon request. |
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| Q: | My advisory firm has a related person that is a foreign bank. This foreign bank provides investment advice to its customers for a fee. The foreign bank is not excepted from the definition of investment adviser under the Investment Advisers Act because the foreign bank is not a bank organized under U.S. law. Do I have to list this foreign bank as an adviser in Section 7.A of Schedule D? | | A: | Yes. |
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| Q: | Item 7.A. asks if my advisory firm has a related person who is a broker-dealer (Item 7.A(1)) or an investment adviser (Item 7.A(3)). Do we use these items to disclose that some of our employees perform investment advisory functions or are registered representatives of a broker-dealer? |
| A: |
No. Information about your employees who perform investment advisory functions or are registered representatives of a broker-dealer is requested elsewhere on Form ADV. The number of your firm's employees who perform investment advisory functions should be disclosed under Item 5.B(1). The number of your firm's employees who are registered representatives of a broker-dealer should be disclosed under Item 5.B(2).
If, however, you have a related person (employee, director, etc.) who has a separate business as an investment adviser or broker-dealer, you must report that business in response to Item 7.A. |
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Form ADV: Item 7.B
Note: Due to a court decision, certain amendments to Item 7.B. and Section 7.B. of Schedule D of Part 1A of Form ADV, adopted in 2004, that referred to the term "private fund" are no longer a part of Form ADV although the IARD system will continue to display those items that way until the IARD system is reprogrammed. For guidance, see the section entitled "SEC Staff Guidance for Interim Completion of Part 1A of Form ADV, Item 7.B. and Schedule D, Section 7.B." Staff Guidance |
| Q: | My advisory firm has a related person that is a general partner in an investment-related limited partnership. None of my advisory firm's clients are invested in or solicited to invest in this limited partnership. Do I have to list this limited partnership in Section 7.B of Schedule D? |
| A: | Yes, but see the answers to the questions below and staff guidance. Staff Guidance |
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| Q: | My advisory firm is the general partner of several investment-related limited partnerships that are employees' securities companies (as defined in section 2(a)(13) of the Investment Company Act of 1940) for employees of our firm. My advisory firm also is the general partner of several investment-related limited partnerships that are employees' securities companies for a number of related entities. Do I have to list these employees' securities companies on Section 7.B of Schedule D? |
| A: | You do not have to list on Section 7.B of Schedule D employees securities companies (as defined in section 2(a)(13) of the Investment Company Act of 1940) for your firm or related entities, provided that, as discussed in the answer to the question above, you do not leave Section 7.B blank. If you omit these employees' securities companies from Section 7.B, use the Miscellaneous Section of Schedule D to state that you have employees' securities companies organized as limited partnerships/limited liability companies that are not listed on Section 7.B of Schedule D. You must provide a list of these employees' securities companies upon request. |
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| Q: | Several of our related persons are general partners of family limited partnerships for their own families. These family limited partnerships were established for tax/estate planning purposes. Do I have to list these family limited partnerships on Section 7.B of Schedule D? |
| A: | You do not have to list the family limited partnerships on Section 7.B of Schedule D, provided that, as discussed in the answer to the question above, you do not leave Section 7.B blank. If you omit these limited partnerships from Section 7.B, use the Miscellaneous Section of Schedule D to state that you have related persons who are general partners of family limited partnerships that are not listed on Section 7.B of Schedule D. You must also provide a list of these family limited partnerships upon request. |
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| Q: | My advisory firm has several related persons (including other SEC-registered advisers and non SEC-registered advisers) who are general partners in investment-related limited partnerships (LPs) or managers of limited liability companies (LLCs). The instructions to Item 7.B of Part 1A of Form ADV permit me to omit, from my Schedule D, the LPs and LLCs managed by my firm's related persons who are SEC-registered advisers, so long as I provide an explanatory statement in the Miscellaneous Section of Schedule D. My firm also has other related investment advisers who manage LPs or LLCs but who are not SEC-registered investment advisers. Must I list all LPs and LLCs of those other related persons in Section 7.B of my Schedule D? |
| A: | Yes. |
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Form ADV, Part 1A, Item 8.E
| Q: |
My advisory firm receives research from broker-dealers that execute our clients' securities transactions. We do not, however, use client brokerage to obtain research produced by third parties — all the research we receive is proprietary research produced by the executing broker-dealers. Moreover, some of the broker-dealers providing the proprietary research are affiliated with my advisory firm. Should I answer "Yes" to Item 8.E?
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Yes. Answer "Yes" to Item 8.E if you receive any research or other product or service that is not execution from any broker-dealer or third party in connection with client securities transactions. Neither the source of the research (i.e., whether it is produced by a third party or produced by the executing broker) nor your affiliation with the research provider should have any effect on your answer to Item 8.E.
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Form ADV: Item 8.F
| Q: |
Item 8.F asks whether an adviser or its related persons compensate any person for client referrals. My firm compensates its employees for bringing in clients. Does this cause us to answer "Yes" to Item 8.F? |
| A: |
Answer "Yes" to Item 8.F if an employee receives compensation that is specifically linked to bringing clients into the firm (i.e., cash or non-cash compensation in addition to the employee's normal salary).
For example, if one of your employees receives a bonus that is based, at least in part, on bringing clients into your firm, you would mark "Yes" to Item 8.F. However, awarding a bonus that is based on the firm's profitability during the preceding year would not cause you to mark "Yes" to Item 8.F. |
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Form ADV: Item 9.C
| Q: | Several of our related persons have custody of our advisory clients' cash and securities. Some of these related persons are broker-dealers registered under Section 15 of the Securities Exchange Act of 1934; others are not registered broker-dealers. How should I answer Item 9.C, which asks if a related person who has custody of client assets is a registered broker-dealer? |
| A: | If even one of the related persons who has custody of your clients' assets is a registered broker-dealer, you should mark "Yes" in response to Item 9.C. Mark "No" only if none of them is a registered broker-dealer. |
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Form ADV: Item 11
| Q: | Are SEC-registered advisers required to report arbitration claims in Item 11? |
| A: | No. However, state-registered advisers filing Part 1B of Form ADV are required by state law to report arbitration claims and complete a corresponding DRP. |
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| Q: | Does any question in Item 11 require me to disclose an event that occurred more than 10 years ago? |
| A: | If you are an adviser registered (or registering) with the SEC, you may limit your disclosure of any event in Item 11 to ten years following the date of the event, even if the question is phrased "Have you ever …".
If you are a state-registered adviser, however, you must respond to the questions in Item 11 as posed.
Advisers should note that they may have a continuing anti-fraud obligation to disclose to clients and prospective clients information about an event that occurred more than 10 years ago, even if the adviser is not required to report that event in response to Item 11 of Part 1 of Form ADV. See rule 206(4)-4 under the Investment Advisers Act.
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Form ADV-W
| Q: | How do I withdraw my SEC registration as an investment adviser? |
| A: | File Form ADV-W through IARD. Form ADV-W is effective upon receipt by the SEC. Warning: If your firm is not going out of business, and you are withdrawing your SEC registration because you are "switching" to state registration, you must make sure that there is no "gap" in your registration. Register with state authorities before your SEC registration is withdrawn. |
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| Q: | I currently am registered as an investment adviser with the SEC. I make notice filings with several state authorities. When I file Form ADV-W to withdraw my registration with the SEC, will the state securities authorities where I make notice filings be informed of my SEC withdrawal? Will my notice filing status be affected?
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| A: | Yes. IARD automatically will notify state securities authorities of your SEC withdrawal and also cancel your notice filing status with state securities authorities. |
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| Q: | When would I file a Form ADV-W partial withdrawal? |
| A: | If you are registered as an investment adviser in multiple jurisdictions (for example, with the SEC and one or more state securities authorities, or with several state securities authorities) and you want to withdraw your registration in some but not all of these jurisdictions, you should file a Form ADV-W partial withdrawal.
Remember, a SEC registered adviser who makes notice filings with state securities authorities is not separately registered as an investment adviser in those states. Check with state securities authorities if you have questions about your registration status.
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Form ADV: Part II
| Q: | Can I submit Part II in electronic format through IARD? |
| A: | Yes. IARD will accept electronic submissions of Part II. However, the SEC has not changed the filing requirements for SEC-registered investment advisers. SEC rules require advisers to maintain Part II and amendments to it in their files and the documents are deemed to be filed with the Commission. SEC-registered advisers are not required to submit Part II to the SEC through IARD or in hardcopy form. State-registered investment advisers may be able to meet their state filing obligations by submitting Part II on IARD. If you are a state-registered adviser, contact your state securities regulator for details on your state filing obligation. IARD will accept submissions of Part II from SEC-registered advisers, and if submitted they will be available to the public on IAPD. Submitting a Part II on IARD does not change your filing or client delivery obligations.
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| Q: | Do I need to send a copy of my Part II to the SEC? |
| A: | No, you do not have to submit an electronic version on IARD or send a paper copy of Part II to the SEC. However, you must keep your Part II current, maintain a copy of your Part II of Form ADV in your files, and make it available upon request to SEC staff.
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Schedules A & B
Identification Number Questions
| Q: | I need to list an individual on Schedule A/B who is a foreign national. This individual does not have a CRD number or social security number. What should I do? |
| A: | Call FINRA's Gateway Call Center at (240) 386-4848, and tell them that you need a CRD number assigned to a foreign individual. They will assign the person a CRD number. |
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| Q: | I need to list a foreign entity on Schedule A/B. This entity does not have an IRS Tax Number or Employer ID Number. What should I enter in the box requesting an IRS Tax Number or Employer ID Number? |
| A: | Type "Foreign Entity" in the box. IARD will accept this response. |
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| Q: | I need to list a trust on Schedule A/B. The trust does not have a CRD number. What should the trust use for its identification number? |
| A: | The trust should use its IRS tax number. If the trust's IRS tax number is the same as the grantor's social security number, use that number and indicate that it is a social security number. |
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Schedule A
Ownership Code Questions
| Q: | Two or more people jointly own 30% of an adviser. On Schedule A, what is each person's percentage of ownership? |
| A: | Schedule A must report the maximum ownership (control) of each individual or entity listed. Because these are joint owners, each would be a 30% owner for purposes of Schedule A. Each should use Ownership Code C – 25% but less than 50%. |
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| Q: | If one person in the previous question also owns 25% of the adviser in her own name, how does that change her percentage of ownership? |
| A: | Schedule A must report the maximum ownership (control) of each individual or entity listed. Therefore, this person should combine her individually and jointly held interests for a total ownership of 55% (25% + 30%). She should use Ownership Code D – 50% but less than 75%. |
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| Q: | A trust owns 30% of an adviser. The trust has two trustees. What are the Ownership Codes for the trust and each of its trustees? |
| A: | The trust and each of the two trustees must be listed on Schedule A. The trust has 30% ownership. The trust should use Ownership Code C – 25% but less than 50%. Each of the trustees also has 30% ownership. Each trustee should use Ownership Code C – 25% but less than 50%. |
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| Q: | If one of the trustees in the previous question owns 25% of the adviser in his own name, how does that change the trustee's percentage of ownership? |
| A: | Schedule A must report the maximum ownership (control) of each individual or entity listed. Therefore, the trustee should combine his individual ownership with the ownership of the trust for which he is trustee. The trustee would have a total ownership of 55% (25% + 30%). He should use Ownership Code D – 50% but less than 75%. |
Date Title or Status Acquired Question
| Q: | My advisory firm's Schedule A includes an executive officer whose title has evolved over time. What date should I use for the date the executive officer's title was acquired? Should it be the date the executive officer acquired his or her current title? Or, should it be the date the executive officer first acquired a title that required him or her to be listed on Schedule A? |
| A: | You have two options. You can make multiple entries for the executive officer, listing the officer's titles, and the dates they were acquired, as the titles evolved over time. Or, you can list the executive officer once, using his or her current title and the date the officer first acquired a (different) title that required him or her to be listed on Schedule A. |
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Schedule B
| Q: | How do I determine which indirect owners must be listed on Schedule B? |
| A: | Indirect owners that own 25% or more of a direct owner must be listed. Think of this as a "first level" of indirect ownership. Then examine the ownership structure of each of those listed indirect owners; does any person own 25% or more of that indirect owner? If so, it must be listed. Think of these as "second level" indirect owners. Continue up the chain of ownership, and AT EACH LEVEL look to see if there are any 25%-or-more owners. If so, list them. If you reach a public company, stop. |
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Schedule D
| Q: | My advisory firm is a general partner in an investment-related limited partnership. We have a management agreement with the limited partnership. We do not have a separate management agreement or another advisory client relationship with any of the limited partners. How do we respond to the question "Approximately what percentage of your clients have invested in the limited partnership?" |
| A: | Under the facts presented and for the purpose of this item, your client is the limited partnership, and the correct response is that 0% of the advisory firm's clients are invested in the limited partnership. |
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| Q: | Under the facts of the previous question, how do we respond to the question "Are your clients solicited to invest in the limited partnership?" |
| A: | The response is "no," unless the adviser's other clients are solicited to invest in the limited partnership. |
Note: Due to a court decision, certain amendments to Item 7.B. and Section 7.B. of Schedule D of Part 1A of Form ADV, adopted in 2004, that referred to the term "private fund" are no longer a part of Form ADV although the IARD system will continue to display those items that way until the IARD system is reprogrammed. For guidance, see the section entitled "SEC Staff Guidance for Interim Completion of Part 1A of Form ADV, Item 7.B. and Schedule D, Section 7.B." Staff Guidance |
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Miscellaneous Section
| Q: | Is the Miscellaneous Section at the end of Schedule D restricted to discussion of information covered only by Schedule D, or can I use it for explanatory information related to other parts of Form ADV? |
| A: | You may use the Miscellaneous Section to provide explanatory information about your response to any item in Form ADV. |
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"Old" Schedule D
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On "old" Schedule D, we used to provide information about the educational, disciplinary and business backgrounds of individuals associated with our advisory firm. Do we still have to complete "old" Schedule D? |
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No. You no longer have to complete "old" Schedule D. It is not part of the current version of Form ADV.
You should note, however, that disciplinary information that was disclosed on "old" Schedule D must be disclosed in response to Item 11 and the corresponding DRPs of Part 1A of current Form ADV.
In addition, the Commission has proposed amendments to Part II of Form ADV that, if adopted, would require you to disclose the educational, disciplinary and business backgrounds of certain individuals associated with your firm. This disclosure would have to be provided to clients in "brochure supplements." The Commission has not yet taken final action on these proposals. |
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Execution Page
| Q: | Does the execution page of my Form ADV have to be manually signed? | | A: | No. A manual signature is not required on Form ADV. The "official" signature for each Form ADV you file is the typed signature that appears on your electronic filing. |
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Filing Submitted
| Q: | After I hit the "submit" button, how do I know that my IARD filing has been successfully filed? | | A: | If the filing appears in your IARD "Filing History," you have successfully filed the filing. To check your "Filing History," go to the "IARD Main" screen. Select "View Organization." On the side navigation bar, select "Filing History." Your filing should appear on the list of filings you have filed on IARD. If you believe that you submitted a filing that does not appear in your IARD "Filing History," you should call FINRA's Call Center at (240) 386-4848. |
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Filing An Annual Updating Amendment
| Q: | Our fiscal year ends December 31. When should I file our Annual Updating Amendment to Form ADV? |
| A: | If your fiscal year ends on December 31, you must file your Annual Updating Amendment by March 31 so that it is submitted within 90 days of your fiscal year end. |
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Q: | My fiscal year ends in a month other than December. When must I file my annual updating amendment to Form ADV? |
| A: | Your Annual Updating Amendment must be filed within 90 days of your fiscal year end. |
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Q: | The 90-day deadline for filing my Annual Updating Amendment falls on a day that the IARD is closed. If the IARD is closed on my deadline date, is my filing deadline extended one business day? |
| A: | Yes. Your deadline for filing your Annual Updating Amendment is extended until the next business day. See rule 0-4 under the Investment Advisers Act and check FINRA's website at www.IARD.com for IARD's hours of operation. |
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Q: | Will I receive any type of notification or reminder about when my next Annual Updating Amendment should be filed? |
| A: | No. Your firm is responsible for tracking and submitting timely filings. You should always calendar your Annual Updating Amendment filing, which is due within 90 days following the end of your fiscal year, and you should review General Instruction 4 to Form ADV for other updating requirements. The General Instructions are on the SEC website at www.sec.gov/iard.
On October 31, 2005, in IARD Release 7.1, the IARD system was enhanced to add an email alert and reminder function. To take advantage of this function, the adviser must supply the email address of its contact employee in its response to Part 1A of Item 1.J. of Form ADV; and the contact employee must confirm the email address by responding to the confirmation request the IARD system sends to the contact person. With this enhanced function, the SEC-registered investment adviser will receive email reminders of certain filing deadlines as well as email notices of SEC regulatory and compliance information. For further information about Release 7.1. see IARD Upgrade to Notify Advisers By Email, at www.sec.gov/divisions/investment/iard.shtml. |
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Q: | When do I need to submit my Annual Updating Amendment? |
| A: | The Annual Updating Amendment is due within 90 days following the end of your firm's fiscal year. |
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Filing an Other-than-Annual Amendment to Form ADV
| Q: | I previously filed my firm's Form ADV through the IARD system, and it is not yet time to file my annual updating amendment. When must I amend my Form ADV in between annual updating amendments, and how do I amend my Form ADV to reflect changes? |
| A: | - You should review Item 4 of the Form ADV General Instructions to determine when you must amend your Form ADV. You can view the General Instructions at www.sec.gov/about/forms/formadv.pdf.
- To amend your Form ADV, you should take the following steps:
- Logon to the IARD. In the Forms section/tab choose ADV New Filing.
- Select the filing type: Submit an Other-than-Annual Amendment to your registration.
- You can now begin to enter the appropriate information on the form. When you have finished amending your Form ADV, complete the appropriate Execution Page, run the completeness check, correct any completeness errors and submit the filing. No processing fees are charged for Other-than-Annual Amendments (although state fees may be charged if a new Notice Filing or State Registration is selected).
- For a more detailed discussion of how to file an Other-than-Annual Amendment to Form ADV, see the IARD FIRM USER'S MANUAL at http://www.iard.com/firm_users_man.asp.
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Public Disclosure
| Q: | When will the IARD Public Disclosure website become available? |
| A: | The IARD Public Disclosure website, www.adviserinfo.sec.gov began operating on September 25, 2001. Members of the public now can view an adviser's most recent Form ADV on line. The IARD Public Disclosure website is accessible from any computer at no charge. |
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| Q: | I don't have a computer. How can I obtain a copy of a Form ADV filed on IARD? |
| A: | To obtain a copy of a Form ADV filed on IARD (or a Form ADV filed on paper), send a written request to the SEC's Public Reference Branch. You can send your request (1) by e-mail at publicinfo@sec.gov, (2) by fax at (202) 777-1027 or (3) by US Mail to the SEC, Public Reference Branch, 100 F Street, NE, Washington, DC 20549. Your request should include your name, address and telephone number. There is a copying charge of 26 cents per page.
You also may visit the SEC's Public Reference Room to obtain copies of Form ADVs. The Public Reference Room is located at 100 F Street, NE, Room 1580, Washington, DC 20549. It is open from 10:00 a.m. to 3:00 p.m., Eastern Time, Monday through Friday, except federal holidays. There is a copying charge of 26 cents per page.
If you need additional assistance, you may contact the SEC's Public Reference Branch at (202) 551-8090. |
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Using IARD
Completeness Check Problems
| Q: | When completing my Form ADV filing, I receive a completeness check error that says, "Part 1B state registration, at least one state must be selected." My firm is SEC-registered. Why does this occur? |
| A: | This problem typically occurs because you selected the wrong category under Type of Filing. (Usually an SEC registered adviser has incorrectly selected "Apply for Registration as an Investment Adviser in One or More States"). To correct the problem, delete that filing and select the appropriate category of filing type when you begin a new filing. |
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Daily Account and Renewal Account
| Q: | What is the difference between the Daily Account and the Renewal Account? |
| A: | The Daily Account is the financial account used to fund all types of adviser filings and registration fees except state renewal filing fees. The Daily Account can be accessed any time during IARD operating hours.
The Renewal Account is the financial account used only to pay state fees for renewal of State Registrations and State Notice Filings. The Renewal Account is used only during the renewal period (November-December) each year. |
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Deleting A Filing or DRP
| Q: | How do I delete filings or DRPs? |
| A: | You cannot delete a filing or a DRP after you have submitted them on IARD.
You can delete a pending filing. Click on "pending filings" and then click "delete". You can delete a DRP if it is part of a pending filing. To delete the DRP, open the pending filing, navigate to the appropriate DRP and click "delete" at the bottom of the page. |
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Removing a DRP
| Q: | Can I remove a DRP from my firm's Form ADV? |
| A: | Yes, but only in two situations. A DRP can be removed if 1) the DRP was filed for an advisory affiliate that is no longer associated with your firm; or 2) your firm is SEC-registered and the event or proceeding reported in the DRP is more than 10 years old, or was resolved in your firm's favor (or your advisory affiliate's favor if the DRP was filed for an affiliate).
To remove a DRP, click the appropriate box in Part I of the affected DRP. If the related response to Item 11 (Disclosure Information) in Form ADV also has changed, you will need to change the Item 11 response by filing another amendment. You cannot change both the DRP and the related Item 11 response in the same filing. Therefore, after you submit a filing with the DRP change, create a new filing, change the appropriate response in Item 11, and submit that subsequent filing.
Removal of a DRP is different from deletion of a DRP. Removal means that the DRP will no longer appear in your current filing or in the IAPD, but the DRP will continue to appear in your previous historical filings. |
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Getting Access to IARD
| Q: | How do I get access to IARD for myself and/or other people working for my adviser firm? |
| A: | The IARD system is a secure site. In order to gain access to IARD, you must complete the three forms in FINRA's entitlement packet. Mail the completed forms to FINRA using the address that appears on the forms. FINRA will send your Account Administrator a confirmation packet with a username and password. The Account Administrator then can set up other user accounts to access IARD and assign passwords to those Users. The FINRA's User's Manual provides directions on how to create other user accounts. |
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New Direct Owner
| Q: | How do I enter a new direct owner? |
| A: | You can create a new direct owner in an amendment to your Form ADV. Click on SCHEDULE A/C DIRECT OWNERS/ EXECUTIVE OFFICERS on the navigation panel. Then select the appropriate owner type — "New Individual" (a human being) or "New Entity" (a company). If you select "New Individual," the system will allow you to search to see if the individual already has a CRD record. If he or she does have a CRD record, his or her name will be displayed. Click on the name to open the screen that allows you to enter the schedule information. If no CRD record is found, click on the "Create Individual" button to assign the individual a CRD number and open the schedule information screen. (If the individual does not have a Social Security number, call FINRA to have a CRD number created for him or her. This CRD number, in turn, can be used to conduct the individual search and open the screen.) |
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Passwords
| Q: | As my firm's Account Administrator, how do I change a User's password? |
| A: | The User has the ability to change his/her own password. However, the Account Administrator also has this capability. Follow these steps to change a User's password.
- Under ADMIN TOOLS, click CHANGE PASSWORD on the main sitemap
- Select EDIT ACCOUNT from the navigation panel
- Select the User's name from the drop down list
- Click on ACCOUNT OPTIONS (gray box in the center of the screen)
- Type in a new password, and verify the password (see the note below on password requirements)
- Scroll to the bottom
- Click on SAVE ACCOUNT OPTIONS
Note: Passwords must meet the following criteria:
- The minimum password length is 8 characters.
- Password changes are limited to one per user per day.
- Passwords must contain characters from three of the following four categories:
- English upper case characters (A...Z)
- English lower case characters (a...z)
- Base 10 digits (0...9)
- Non-alphanumeric (For example, !,$,#,%)
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Pending Filing, New Filing or View Last Filing
| Q: | When I try to amend my Form ADV Part 1 on IARD and click on "Pending," why doesn't my most recently filed Form ADV show up? |
| A: | "Pending" stores unfinished draft filings, not completed filings. When you click on "Pending," you retrieve a draft filing that you started working on, did not finish and saved for completion at a later time. IARD allows you to store an uncompleted filing for up to 120 days so you can continue completing it without having to start from scratch with a new filing. If you have not started a new filing and saved it to work on later, nothing will show up when you click on "Pending."
Select "New Filing" if you want to begin the process of amending your Form ADV Part 1. A new Form ADV Part 1 pre-populated with the last information you filed will appear on your screen. You then can amend any item in Part 1 that requires updating and click "Submit" to file your amendment. If you start to work on an amendment and then want to store your draft so you can complete it later, click on "Pending."
To view your last filed Form ADV, click on "Historical". |
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Printing Form ADV
| Q: | Can I print my Form ADV? |
| A: | Yes. From "View Organization," click on "Filing History." Select the filing ID you want to print. When the new window opens, select "View By Pages," then "All Pages," and then click on the printer icon located on the top right corner. A new window will appear, and you can right-click on the mouse and select print. |
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Switching SEC or State Registration
| Q: | How do I convert my firm from being state-registered to being SEC-registered or vice versa? When do I submit my partial ADV-W? |
| A: | To convert from being a state-registered adviser to being an SEC-registered adviser, submit the filing type "Apply for registration as an investment adviser with the SEC." After the SEC approves your registration you should file a "Partial ADV-W" to withdraw your state registration(s). Do NOT file your Partial ADV-W until your application for SEC registration is approved or you will be unregistered and may be unable to conduct your business during this period of time.
To convert from being a SEC-registered adviser to being a state-registered adviser, submit the filing type "Apply for registration as an investment adviser with one or more states." After your state registration has been approved, then you should file a "Partial ADV-W" to withdraw your SEC registration. Do NOT file your Partial ADV-W until your state registration application(s) are approved or you will be unregistered and may be unable to conduct your business during this period of time. |
http://www.sec.gov/divisions/investment/iard/iardfaq.shtml
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