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Frequently asked questions

When does the new AUM threshold for investment advisers become effective?

The provision in the Dodd-Frank legislation raising the threshold for SEC licensing for investment advisers to $100 million becomes effective July 21, 2011.

Subject to certain exceptions, mid-sized investment firms with $25 million to $100 million in total assets under management will be prohibited from registering with the SEC and therefore must register as a state registered investment advisor (the “Switch.”)

 

Has a timeline been published for switch?

Yes. Investment advisory firms required to make the Switch may withdraw their registration with the SEC as early as January 1, 2012, but must have withdrawn their SEC registration by June 28, 2012. Prior to withdrawal of their SEC registration, investment advisory firms must have registered as a state investment advisor.

 

How does a transitioning investment adviser assure it is continuously registered at the appropriate regulatory level?

Apply for and receive Oregon approval prior to filing the ADV-W with the SEC.

 

Can a state registered investment adviser register in more than one state using IARD?

Yes. All states use Form ADV. Please check our website for Oregonís document requirements and each state for their respective requirements.

 

When must a state registered investment adviser (RIA) license the firm and investment advisor representatives (IARs) in Oregon? Does Oregon have a de minimus rule?

A state investment adviser firm located outside Oregon must license in Oregon when it has more than 5 clients in Oregon. The firm must also license at least one representative. An investment advisor firm with a physical location in Oregon must license the firm and all representatives located in Oregon. There is no de minimus rule for Oregon-based RIAs and IARs. Any IAR located in Oregon must be licensed in Oregon.

 

Will we have to file U4 amendments for my investment adviser representative(s) (IARs)?

No. Because the firm's IARD number associated with the investment adviser representative does not change, there should be no effect on the existing U4 filing. However, some investment adviser representatives currently exempt from licensing may need to be licensed. Please call us to discuss your firm's situation if you have any questions on this.

 

What documents are required to license as an Oregon investment adviser?

The following documents must be filed via the IARD system:

  • Form ADV, Part 1A and all applicable schedules
  • Form ADV Part 1B
  • Form ADV Part 2A and Part 2B
  • Form U4 for all individuals providing investment advisory services

The following documents must be forwarded to the Oregon Division of Finance and Corporate Securities:

  • Copies of investment advisory agreements, financial planning agreements, and solicitor's agreements.
  • Financial Statements. Investment advisers with custody of client funds/securities must provide independently audited financial statements by a CPA or Public Accountant. See OAR 441-175-0100.
  • An original Surety Bond or Letter of Credit in the amount of $10,000.
  • Evidence of compliance with either the Gramm-Leach Bliley Act (GLBA) / FTC guidelines, or the Oregon Identity Theft Protection Act.
  • Additional documents may be requested by the Division licensing examiners in the course of application review.

 

Does Oregon have a minimum net worth requirement for state investment advisers?

Oregon does not have a specific minimum net worth requirement. The investment advisor must be solvent at all times pursuant to ORS 59.205(1).

 

What Oregon statutes and administrative rules should I become familiar with in preparation for my transition?

Statutes and rules that apply to licensing as an Oregon investment advisor include, but are not limited to the following (a complete list of our rules and statutes may be found by clicking here):

Oregon Revised Statutes

59.015 - Definition of an investment adviser
59.165 - Licensing
59.235 - General Supervision - Powers of Director
59.315 - Subpoena Powers

Oregon Administrative Rules

441-175-0041 - Exclusion - Per Capita Referral
441-175-0070 - Licensing Rules - General
441-175-0100 - Licensing IA - IARD
441-175-0105 - Material Changes
441-175-0120 - Licensing Reps
441-175-0165 - Renewals
441-175-0040 - Books and Records to be Maintained
441-195-0050 - Reports by Investment Advisers
441-195-0060 - Complaints
441-205-0145 - Fiduciary Duty
441-205-0165 - Brochure Rule
441-205-0170 - Share of Capital Gains
441-205-0180 - Custody of Funds
441-205-0200 - Advertising

 

Do Oregon's rules for investment advisers differ substantially from the SEC's?

Generally, rule differences may be found in the areas of custody of funds, best execution, Anti-Money Laundering (AML) policy, code of ethics, minimum net worth, annual amendments, and identity theft.

 

What differences can I expect as an Oregon licensed firm?

One difference may be the examination cycle. Oregon maintains a three-year routine examination cycle of investment adviser firms.

 

Has Oregon adopted the new ADV Part 2 Brochure distribution schedule as described in the instructions and guidance section of Part 2 of Form ADV?

Oregonís brochure rule requires an annual offer of ADV Part 2. It does not include the distribution of material changes on a scheduled basis as described in the guidance section of Part 2 of Form ADV.