Registration of a Successor for an Investment Adviser

Tuesday, March 8, 2016

This addresses investment advisers who are succeeding their business to another entity or individual. There are two types of succession: Succession by Amendment or Succession by New Application.

Succession by Amendment

This applies if an investment adviser is changing its form of organization from a sole proprietorship to a limited liability company, for example. In this type of succession, a new application is typically not required. The following information provides steps to completing a succession by amendment:

(1) Investment Adviser Registration Depository (IARD)

  • Form ADV Part 1: File an amendment to update all required sections. At a minimum this will include: Items 4, 5, and 6. [WAC 460-24A-205(1)(a)]
  • Form ADV Part 2: Update all necessary items. [WAC 460-24A-145(6)]
  • Form U4: Initiate or file updating amendments for each investment adviser representative. [WAC 460-24A-205(2)]
  • Payment: Fund your IARD account to ensure sufficient funds for required payments. For every new Form U4 filing, there will be a $40 registration fee. For each investment adviser representative transfer, there may be a $25 transfer fee. [RCW 21.20.340(7)-(9)].

(2) Securities Division (ialicensing@dfi.wa.gov)

  • Payment: Submit a $50 successor fee payable to the Department of Financial Institutions. [RCW 21.20.340(9)(d)]
  • Investment Adviser Successor Payment Form: Complete form and mail with payment to:

    Department of Financial Institutions
    Securities Division
    Attn: Investment Adviser Licensing
    PO Box 9033
    Olympia, WA 98507-9033

(3) Investment Adviser Records

  • Review and update investment advisory contract(s) to reflect your name change and any other applicable provision(s). [WAC 460-24A-130]
  • Review and update all advertisements. [WAC 460-24A-100 and SAPS-20]
  • Review and update all necessary books and records. [WAC 460-24A-200]

Succession by New Application

This applies where the underlying ownership of the adviser changes. For example, where the majority ownership in a company changes from one individual to another. In this type of succession, a new application is required. This cannot be done by amendment.

If you do not qualify for succession by amendment, the investment adviser must re-apply for registration. If this is the case, please send an email to IALicensing@dfi.wa.gov notifying the Division of your intent to file a succession by filing a new investment adviser registration application and include the intended date of succession and name of the new owner(s).

If you have questions regarding whether your succession requires registration by amendment or new application, please feel free to contact us via email at IALicensing@dfi.wa.gov or by phone at (360) 902-8810.