Tuesday, May 02, 2017

Wyoming proposes investment adviser rules

By Jay Fishman, J.D.

Wyoming, the only state to have never regulated investment advisers, now proposes investment adviser rules. The rules will align with Wyoming’s new Securities Act, modeled after the Uniform Securities Act of 2002, that takes effect on July 1, 2017.

Initial registration. To initially register, investment adviser applicants would electronically file with the IARD a complete Form ADV, Uniform Application for Investment Adviser Registration. The application would be accompanied by: (1) proof of meeting written exam requirements; (2) financial statements including a copy of last fiscal year’s balance sheet (but an unaudited balance sheet is required instead if the last fiscal year’s balance sheet is older than 45 days from the application filing date); (3) a copy of a surety bond (if applicable); (4) a $250 fee; and (5) any other Wyoming Secretary of State-required information. The Secretary would accept a copy of Form ADV, Part II filed electronically with the IARD or a paper copy filed directly with the Secretary.

Annual renewal. To annually renew their registrations, investment advisers would electronically file with the IARD a $250 renewal fee and a copy of a surety bond (if applicable).

Amendments. Investment advisers would electronically file with the IARD any amendments to Form ADV. An amendment filed within 30 days of the event necessitating the amendment would be considered “promptly filed.” Investment advisers would also electronically file with the IARD an annual update to Form ADV, within 90 days of their fiscal year-end.

Completion of filing. An initial or renewal investment adviser application would not be considered “filed” until the Secretary has received the required documents and fees.

Withdrawal. Investment advisers could withdraw from registration by electronically filing with the IARD a Form ADV-W, Notice of Withdrawal from Registration as Investment Adviser.

Other IA topics. The proposed rules would additionally cover the following topics:
  • Investment adviser representative registration;
  • Federal covered investment adviser notice filing;
  • Exemption for private fund advisers;
  • Written exam requirement; 
  • Minimum financial requirement (net worth);
  • Financial reporting;
  • Recordkeeping;
  • Business continuity and succession planning;
  • Bonding;
  • Custody;
  • Disclosures (Brochure Rule);
  • Prohibited conduct; and
  • Investment advisory contract.

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