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ND Securities Department
600 East Boulevard Avenue
State Capitol, 5th Floor
Bismarck, ND 58505-0510
Phone: (701)-328-2910
Toll Free: (800)-297-5124
Fax: (701)-328-2946
Grafton Office
701 W 6th Street, #312
Grafton, ND 58237
Phone: 701-352-4592

Investment Adviser & Investment Adviser Representatives

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Investment Adviser

An investment adviser is any person who, for compensation, engages in the business of advising others, either directly or through publications, writings or electronic means, as to the value of securities or as to the advisability of investing in, purchasing or selling securities, or who, for compensation and as a part of a regular business, issues or promulgates analyses or reports concerning securities.   The term includes financial planners and other persons who, as an integral component of other financially related services, provide the foregoing investment advisory services to others for compensation and as part of a business or who hold themselves out as providing the foregoing investment advisory services to others for compensation.

The Dodd Frank Wall Street Reform and Consumer Protection Act included amendments to the Investment Advisers Act of 1940 that changed who is subject to SEC and state registration as an investment adviser. The assets under management (AUM) dividing line between state and SEC registration has risen from $25 million to $100 million.  Those with AUM of less than $100 million are subject to state registration, those with AUM $100 million or greater are subject to SEC registration.

State regulated investment advisers must be registered if they have a place of business in North Dakota or if they have more than five North Dakota clients in a 12-month period. Federal covered advisers must make a notice filing if they have a place of business in North Dakota or if they have more than five North Dakota clients in a 12-month period.

Investment Adviser Representative

An Investment Adviser Representative is an individual employed by or associated with an investment adviser or federal covered adviser who:  makes any recommendations or otherwise renders advice regarding securities directly to advisory clients, manages the accounts or portfolios of clients, determines which recommendations or advice regarding securities should be given, provides investment advice or holds out as providing investment advice, receives compensation to solicit, offer, or negotiate for the sale of or sells investment advisory services, or immediately supervises employees in the performance of any of the foregoing.

To transact business as an Investment Adviser Representative in North Dakota, an individual must be registered in North Dakota unless employed by or associated with an investment adviser that is exempt from registration or a federal covered investment adviser that is excluded from the notice filing requirements.

Initial Registration Filing Requirements:

For Investment Advisers registered by the North Dakota Securities Department, filings will be accepted through the Investment Advisory Registration Depository (IARD).  For more information on how to file though the IARD, check the IARD website at www.iard.com.

  1. State registered Investment Advisers are required to file the following through the IARD:
    1. Part 1 and Part 2 of the most recent ADV. See "Forms" link for current Form ADV.
    2. $100 filing fee paid through the IARD.

The new Form ADV Part 2 requires registered Investment Advisers to provide new and prospective clients with a brochure and brochure supplements written in plain English.

  1. State registered Investment Advisers will file the following directly with the North Dakota Securities Department:
    1. List of other jurisdictions if any, which have refused, revoked or suspended the applicant or in which the applicant has been withdrawn.
    2. North Dakota requires that an Affidavit of Investment Advisory Activity be completed and sent to our office for verification of activity.
    3. A copy of the firm’s Investment Advisory Contract.
  2. Investment Adviser Representative Requirements:
    1. Form U-4 for each representative will be filed electronically through the IARD.
    2. A $50 filing fee for each representative paid through the IARD.
    3. See policy statement below regarding exam requirements.

Registration Renewals

Renewal applications for investment advisers and investment adviser representatives are handled through the IARD. Preliminary Renewal Rosters containing the fees for all jurisdictions in which the firm is currently registered or notice filed are made available through the IARD in November of each year. The IARD sets a deadline date in December when firms must have their renewal payments completed. Firms that fail to meet the deadline to deposit sufficient funds with the IARD will be listed as Failed to Renew and will be terminated at year end. When such firms are termed, all investment adviser representatives associated with those advisers will also be termed.  IARD will send out complete payment instructions with the renewal roster.

The fees for renewal are:

  • $100 for the firm
  • $50 for each registered investment adviser representative

NORTH DAKOTA DOES NOT REQUIRE THE SUBMISSION OF ANNUAL FINANCIAL STATEMENTS

Policy Statement
IA and IAR Exam Requirements
Effective Date - September 1, 2001

  1. Current Exam Requirements. A sole proprietor investment adviser or an individual representing an investment adviser or federal covered adviser seeking registration as an investment adviser representative must have a passing score on the following examinations:
    1. The Uniform Investment Adviser Law Examination (Series 65 examination, as modified on January 1, 2000); or
    2. The General Securities Representative Examination (Series 7 examination) and the Uniform Combined State Law Examination (Series 66 examination, as modified on January 1, 2000).
  2. Grandfathering Provisions.
    1. Any individual who is currently registered as an investment adviser or an investment adviser representative in any jurisdiction in the United States on the effective date of this policy shall not be required to satisfy the examination requirements for continued registration, except that the Commissioner may require additional examinations for any individual found to have violated any state or federal securities or investment advisory law.
    2. An individual who has not been registered as an investment adviser or an investment adviser representative in any jurisdiction for a period of two years shall be required to comply with the examination requirements set forth in paragraph 1.
  3. Automatic Waiver. The examination requirements shall not apply to an individual who provides proof to the Commissioner that he or she currently holds one of the following professional designations awarded by and in good standing with the applicable organization:
    1. Certified Financial Planner (CFP) awarded by the International Board on Policy for Certified Financial Planners, Inc.;
    2. Chartered Financial Consultant (ChFC) awarded by the American College, Bryn Mawr Pennsylvania;
    3. Personal Financial Specialist (PFS) awarded by the American Institute of Certified Public Accountants;
    4. Chartered Financial Analyst (CFA) awarded by the Institute of Chartered Financial Analysts;
    5. Chartered Investment Counselor (CIC) awarded by the Investment Counsel Association of America;