Should my firm register with the U.S. Securities and Exchange Commission (“SEC”) or with a state securities regulator?
Just because a firm meets the definition of providing investment advisory services, it does not automatically mean the firm must register as an investment advisor. The SEC has provided exclusions for several common professions that provide investment advisory services as long as such services are “solely incidental” to the firm or individual’s main business. This category includes broker-dealers, lawyers, accountants, engineers, teachers, banks, bona fide publishers, and advisers limited to U.S. government securities. Because “solely incidental” can be open for interpretation, firms falling under these exclusions should consider consulting with an outside professional to make sure their activities do not require investment advisor registration. A common exemption from registration is that of a private investment advisor. An investment advisor is exempt from SEC registration if it (1) had fewer than fifteen clients during the preceding twelve months, (2) does not advise any registered i
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