Friday, December 1, 2017

This addresses investment advisers who are succeeding their business to another entity or individual.  There are two types of succession: Succession by Legal Status or Succession by Organization. 

Succession by Legal Status

This applies if an investment adviser is changing its form of organization from a sole proprietorship to a limited liability company, for example. The following information provides steps to completing a succession by legal status:

(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)]

(2) Securities Division

  • 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 Organization

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 legal status, the investment adviser must re-apply for registration.  The following information provides steps to completing a succession by Organization:

(1) 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).

(2) Investment Adviser Registration Depository (IARD)

  • Set Up Your Account
  • Fund Your Account
  • File Online: Form ADV Part 1 (be sure to complete Item 4), Form ADV Part 2, and Form U4.

(3) Securities Division

  • 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

(4) 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]
  • Submit investment advisory contract(s), balance sheet, and list of representatives to IALicensing@dfi.wa.gov.

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.