What are the basic regulatory requirements for a solicitor referral arrangement between an SEC registered investment adviser and a third-party (non-employee)?
Under SEC Rule 206(4)-3, a solicitor referral arrangement between the investment adviser and third-party (non-employee) solicitor must be in writing, which needs to include provisions related to the following: (a) the scope of the solicitor’s activities; (b) a covenant by the solicitor to perform such activities consistent with instructions of the investment adviser and in compliance with the Investment Advisers Act of 1940 and associated rules; and (c) a covenant by the solicitor to provide the client with a copy of the investment adviser’s Form ADV Part II and Schedule F and a separate written solicitor disclosure.
Related Questions
- If a registered investment adviser purchases an off-the-shelf investment adviser compliance manual, will this meet the requirements of SEC Rule 206(4)-7?
- Can the third-party solicitor’s referral fee be paid from the investment advisory fee charged by the registered investment adviser?
- Are there individuals that cannot serve as a solicitor on behalf of a registered investment adviser under SEC Rule 206(4)-3?
