Arizona State Investment Adviser and Investment Adviser Representative Licensing/Notice Filing Requirements
Please note that all investment adviser filings with the state of Arizona are to be submitted electronically through the Investment Adviser Registration Depository ("IARD"). Information on becoming entitled to use the IARD is available at www.iard.com. You may also contact the IARD for assistance at (240) 386-4848.
LICENSING AS A STATE INVESTMENT ADVISER
Applicants should review the definition of "investment adviser" in A.R.S. § 44-3101 as well as the exemption available under A.R.S. § 44-3152 to see if licensing in Arizona is required.
To become licensed as an investment adviser, an applicant must submit to the Securities Division:
A. Form ADV (Part 1A and Part 1B) File Form ADV electronically through the IARD after you have become entitled to use the IARD. [A.R.S. § 44-3153(B) and A.A.C. R14-6-212(A)(1)]. Form ADV and instructions are available at http://www.nasaa.org/industry___regulatory_resources/investment_advisers/758.cfm
B. Part II of the ADV and Schedule F File Form ADV Part II and Schedule F electronically through the IARD. [A.R.S. § 44-3153(B) and A.A.C. R14-6-212(A)(1)]. Form ADV Part II and Schedule F are available at http://www.nasaa.org/industry___regulatory_resources/investment_advisers/758.cfm
C. Disclosure Statement (Brochure) If Part II of the Form ADV will not be used as your disclosure statement, please submit electronically through the IARD a copy of the disclosure statement (brochure) given to clients. [A.R.S. § 44-3153(C)(1) and A.A.C. R14-6-205 and R14-6-212(A)(5)]
D. Audited Balance Sheet, if required. May be submitted electronically on ADV Part II Schedule G or filed directly with the Securities Division. [A.R.S. § 44-3153(C)(3) and A.A.C. R14-6-212(A)(2)]
NOTE: If the applicant will have custody of client monies or securities or requires payment of advisory fees six months or more in advance and in excess of $500 for each client, an audited balance sheet as of the end of the applicant's fiscal year, together with the independent certified public accountant report is required. The balance sheet shall be prepared in conformity with generally accepted accounting principles and audited by an independent certified public accountant. The notes to the balance sheet shall state the principles used to prepare the balance sheet, the basis of included securities and any other explanation required for clarity.
E. Branch Office Information If the firm intends to have one or more offices located in Arizona, please provide a list of all Arizona offices (include DBA if applicable). The list should include the address, phone number, and name of the contact person. [A.R.S. § 44-3153(C)(5) and R14-6-212(A)(4)]
F. No Investment Adviser Activity Affidavit A notarized affidavit of a principal stating that a review of the books, records, and correspondence of the investment adviser has been conducted, and whether any investment advisory services have been provided to Arizona residents during the period of September 1, 1994, through the date of application. If such services have been provided, the applicant should state which, if any, exemption was relied upon. [A.R.S. § 44-3153(C)(4) and R14-6-212(A)(3)] A sample form is available on the Security Division’s website at www.azcc.gov/divisions/securities/forms/forms-ia.asp
G. Fingerprint card, if applicable An individual who is a sole proprietor must provide a fingerprint card if the applicant’s fingerprints are not on file with the Division, CRD system or the IARD. [A.R.S. § 44-3153(C)(6)]. Please submit a fingerprint card and a check for $24.00 made payable to the Arizona Corporation Commission to the Division.
H. Examination Requirement An individual who is a sole proprietor and who does not have an exemption from licensing must provide proof of compliance with written examination requirements. See Item C, "Examination Requirement" under LICENSING AS AN INVESTMENT ADVISER REPRESENTATIVE below for additional information. [A.R.S. § 44-3153(C)(2) and A.A.C. R14-6-204]
I. Licensing Fee A $250 nonrefundable licensing fee should be sent directly to Financial Industry Regulatory Authority, Inc. ("FINRA") and deposited into your firm’s IARD Daily Account, along with any other required state and IARD system fees. [A.R.S. §§ 44-3153(D) and 44-3181(A) and A.A.C. R14-6-212(A)(7)]
J. An investment adviser applicant organized as a sole proprietorship must provide documentation the applicant is lawfully present in the United States, as required by A.R.S. § 41-1080. The applicant must present the original of one of the authorized documents at the office of the Securities Division or submit a copy of one of the authorized documents certified by either a notary or the issuing agency. (Many states, including Arizona, do not permit copies of certain documents to be certified by a notary, including birth certificates.)
Applications for licensure as an investment adviser will be processed in accordance with the terms of R14-6-105.
NOTICE FILING IN ARIZONA (SEC INVESTMENT ADVISER)
Be sure to review the definition of "investment adviser" in A.R.S. § 44-3101 as well as the exemptions available under A.R.S. § 44-3152 to see if notice filing in Arizona is required.
To become a notice filer in Arizona, an applicant must submit to the Securities Division:
A. Form ADV Part 1A and Part 1B If you are a new notice filer in Arizona and have not filed as a notice filer in any other state, please file Part 1A and Part 1B of the Form ADV electronically through the IARD and check the Arizona box on Item 2, SEC Registration on Part 1A of the Form ADV. [A.R.S. § 44-3153(E) and (F) and A.A.C. R14-6-212(B)(1)]
NOTE: If you are a new notice filer in Arizona and have filed as a notice filer with another state, please submit an "Other than Annual Amendment" and check the Arizona box on Item 2, SEC Registration on Part 1A of the Form ADV. [A.R.S. § 44-3153(E) and (F) and A.A.C. R14-6-212(B)(1)]
B. Filing Fee $250 nonrefundable licensing fee should be sent directly to FINRA and deposited into your firm’s IARD Daily Account, along with any other required state and IARD system fees. [A.R.S. § 44-3181(A) and A.A.C. R14-6-212(B)(3)]
LICENSING AS AN INVESTMENT ADVISER REPRESENTATIVE
Applicants should review the definition of "investment adviser representative" in A.R.S § 44-3101 and A.A.C. R14-6-210 and R14-6-211 to see if licensing in Arizona is required.
To become licensed as an investment adviser representative, an applicant must submit to the Securities Division:
A. Form U-4 filed electronically through the IARD. [A.R.S. § 44-3156(B) and (C(1) and A.A.C. R14-6-212(C)(1)]
B. Fingerprint Card, if applicable. Please submit directly to the Securities Division a fingerprint card (supplied by the Division) and a check for $24.00 made payable to the Arizona Corporation Commission. [A.R.S. § 44-3156(C)(3)]
C. Examination Requirement Proof of compliance with written examination requirements. [A.R.S. § 44- 3156(C)(2) and A.A.C. R14-6-204] Pursuant to A.A.C. R14-6-204, all natural persons applying for licensure as a sole proprietor - investment adviser or as an investment adviser representative may satisfy these requirements by any of the following:
1. Exams taken after December 31, 1999. An individual who does not have an exemption (see Note following Item C.3 below) must provide proof of successful completion of either (a), or (b):
(a) Series 65 exam, or
(b) Series 66 exam and the Series 7* or Series 2 exam.
*The Series 1 exam, if successfully completed prior to May 1975, will be accepted in lieu of the Series 7 exam.
2. Exams taken on or before December 31, 1999. An individual who does not have an exemption (see Note following Item C.3 below) must provide proof of successful completion of either (a), or (b):
(a) Series 65 exam and either the Series 7* or Series 2 exam, or
(b) Series 66 exam and either the Series 7* or Series 2 exam.
*The Series 1 exam, if successfully completed prior to May 1975, will be accepted in lieu of the Series 7 exam.
NOTE: If the applicant did not complete the required examinations as outlined above within 12 months of the date of the application, the applicant must provide documentation of having been licensed or registered as a sole proprietor -- investment adviser or investment adviser representative in at least one state within the two-year period preceding the date of the application.
3. An applicant shall not be required to comply with 1 or 2 above if the applicant currently holds any one of the following professional designations and is currently in good standing with the associated organization:
(a) Certified Financial Planner (CFP)
(b) Chartered Financial Analyst (CFA)
(c) Chartered Financial Consultant (ChFC)
(d) Chartered Investment Counselor (CIC)
(e) Personal Financial Specialist (PFS)
NOTE: Pursuant to A.R.S § 44-3152(C), an applicant is exempt from having to license as an investment adviser representative if the applicant is registered as a securities salesman in Arizona. Pursuant to A.R.S. § 44-3152 and R14-6-210, if an applicant firm is a notice filer with no place of business in Arizona, you may be exempt from having to license your investment adviser representatives. Please refer to the exact wording of the Arizona statute and rule to determine if you qualify for the exemption.
D. Licensing Fee $40 nonrefundable license fee sent directly to FINRA and deposited into your firm’s IARD Daily Account. [A.R.S. §44-3181(A) and A.A.C. R14-6-212(C)(3)]
Applications for licensure as an investment adviser representative will be processed in accordance with the terms of R14-6-105.
REPORTING REQUIREMENTS
STATE INVESTMENT ADVISER
A. All amendments to Form ADV (Parts I, II, and Schedule F) must be filed electronically through the IARD as changes occur or within 30 days after the change. [A.R.S. § 44-3159(A)(1)]
B. If the investment adviser has custody of client monies or securities or requires payment of advisory fees six months or more in advance and in excess of $500 for each client, the investment adviser must file with the Division an annual Audited Balance Sheet, including footnotes, together with the independent certified public accountant’s report, within 90 days after the investment adviser's fiscal year-end. [A.R.S. § 44- 3159(A)(2)]
C. If the investment adviser has custody of client monies or securities, the adviser must comply with the ongoing reporting requirements pursuant to R14-6-206.
NOTE: An investment adviser whose principal place of business is in another state, who is registered as an investment adviser with that state, and who has complied with the financial reporting requirements of that state need only file the following with the Division:
1. A copy of the financial reports that the investment adviser files with the state in which it maintains its principal place of business. [A.R.S. § 44-3159(D)]
INVESTMENT ADVISER REPRESENTATIVE
File electronically the Form U-4 through the IARD as such changes occur or within 30 days after the change. [A.R.S. § 44-3159(A)(1)]
IARD SYSTEM FEES - INVESTMENT ADVISER (STATE AND NOTICE FILER)
In order to submit an application for a new state investment adviser or investment adviser representative license through the IARD system, a firm must have funds on deposit in its Daily Account prior to submitting the filing. If no funds are on deposit, the system will not permit an applicant to submit the filing.
Please review www.iard.com or contact IARD at (240) 386-4848 regarding any IARD system fees or submission questions.
RENEWAL
All licenses expire on December 31 of each year unless renewed before expiration by payment through the IARD of the fees prescribed by A.R.S. § 44-3181(A). If the IARD does not provide for receipt of a filing, the filing may be made with the Corporation Commission by mail or any other reasonable method that is acceptable to the Commission. [A.R.S. § 44-3158(A)].
Investment Adviser ....................$250
Investment Adviser Representative (each) .......$ 40
NOTE: An investment adviser that fails to timely renew an annual investment adviser or investment adviser representative license shall pay a penalty of twenty-five dollars per business day until the appropriate documents and fee are filed, up to a maximum of forty business days. Failure to timely renew is not a violation of A.R.S. § 44-3151 if the license fee and penalty are paid within forty business days. Failure to renew within forty business days may result in additional sanctions as provided under the Investment Management Act. [A.R.S. § 44-3181(B)]
NAME CHANGE
In the event of a name change, an investment adviser must submit to the Securities Division:
STATE INVESTMENT ADVISER
A. The investment adviser's name change under Item 1 of Part 1A of the Form ADV and an amended copy of ADV Part II filed electronically through the IARD; and
B. For each investment adviser representative, the Form U-4 filed electronically through the IARD with the new name of the investment adviser.
SEC INVESTMENT ADVISER (NOTICE FILER)
A. The investment adviser's name change under Item 1 of Part 1A of the Form ADV electronically through the IARD.
REORGANIZATION
In the event of a reorganization of the investment adviser, the investment adviser must:
STATE INVESTMENT ADVISER
A. Complete an application to license the reorganized entity, pursuant to the guidelines above. Fees will be debited from the firm's IARD Daily Account.
NOTE: Arizona law does not provide for the transfer of an investment adviser license. In the event that the IARD system does not assess a new license fee upon notice of reorganization, the Adviser must forward the licensing fee directly to the Corporation Commission.
B. File the Form ADV-W for the former entity electronically through the IARD. Please note that in order to terminate the license of the former entity, the former entity must have been transitioned onto the IARD and filed its current Form ADV electronically through the IARD before its Form ADV-W can be filed electronically through the IARD.
C. File a current Form U-4 electronically through the IARD for those representatives who are transferring to the new entity and a Form U-5 for those representatives who are terminating employment with the former entity. Fees will be debited from the firm’s IARD Daily Account.
NOTICE FILERS (SEC INVESTMENT ADVISERS)
A. Complete an application to notice file the reorganized entity, pursuant to the guidelines above. Fees will be debited from the firm’s IARD Daily Account.
NOTE: Arizona law does not provide for the transfer of an investment adviser notice filing. In the event that the IARD system does not assess a new fee upon notice of reorganization, the Adviser must forward the notice filing fee directly to the Corporation Commission.
B. File the Form ADV-W for the former entity electronically through the IARD. Please note that in order to withdraw the notice filing of the former entity, the former entity must have been transitioned onto the IARD and filed its current Form ADV electronically through the IARD before its Form ADV-W can be filed electronically through the IARD.
C. File a current Form U-4 electronically through the IARD for those representatives who are transferring to the new entity and a Form U-5 for those representatives who are terminating employment with the former entity. Fees will be debited from the firm’s IARD Daily Account.
If you have any questions, please contact the Division at (602) 542-0326.
