I. Registration Fees.
- Investment Adviser: $250.
- Investment Adviser Representative: $60.
II. Financial & Bonding Requirements. Pursuant to Commission Rule 830-X-3-.06, all investment advisers must maintain a net worth of $10,000 or have in force a surety bond of $50,000. A $50,000 surety bond must also be in force if the IA maintains custody or discretionary authority over client accounts. Pursuant to Commission Rule 830-X-3-.05, an audited or attested balance sheet, prepared in accordance with GAAP standards and dated not be than ninety (90) days prior to the date of filing, must be filed along with the initial application. Thereafter, audited financial statements must be filed within sixty (60) days after the close of the adviser’s fiscal year.
III. Sole Proprietorships. If an IA is structured as a sole proprietorship, an application for both the firm and the individual must be filed along with the appropriate fees for both the IA and the IAR. Form U4 must be filed for the IAR and Form ADV for the IA must be filed electronically via IARD.
IV. Branch Offices. An IA must submit a list of branch offices.
V. De Minimis. Pursuant to Code of Alabama, 1975, Section 8-6-3 – It is unlawful for any person to transact business in this state as an investment adviser or as an investment adviser representative unless:
(1) He or she is so registered under this article (Code of Alabama,1975);
(2) His or her only clients in this state are investment companies as defined in the Investment Company Act of 1940, other investment advisers, broker-dealers, banks, trust companies, savings and loan associations, insurance companies, employee benefit plans with assets of not less than $1,000,000, and governmental agencies or instrumentalities, whether acting for themselves or as trustees with investment control, or other institutional investors as are designated by rule or order of the commission; or
(3) He or she has no place of business in this state and during any period of 12 consecutive months does not direct business communications in this state in any manner to more than five clients, other than those specified in subdivision (2), whether or not he, she, or any of the persons to whom the communications are directed is then present in this state.
VI. Other Required Documents.
- Original signed statement concerning custody or discretion of client funds and accounts.
- Affidavit of prior securities/investment advisory activity.
For additional information, please contact the Alabama Securities Commission.
