DEFINITION

"Investment Adviser" is defined, in section 61-1-13(1)(o) of the Utah Uniform Securities Act ("Act"), as "any person who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of  investing in, purchasing, or selling securities, or who, for compensation and as part of a regular business, issues or promulgates analyses or reports concerning securities." "'Investment adviser' also includes financial planners and other persons who, as an integral component of other financially related services, provide the foregoing investment advisory services to others for compensation and as part of a business or who hold themselves out as providing the foregoing investment advisory services to others for compensation."

TYPE OF INVESTMENT ADVISORY FIRM

• State Covered Investment Adviser:
  • Has assets under management of less than $25 million
  • Required to license as an investment adviser with the state if they meet either of the following criteria:
    • Firm has more than 5 clients who are Utah residents
    • Firm has a place of business in Utah
• Federal Covered Investment Adviser:
  • Has assets under management of $25 million or more
  • Required to register as an investment adviser with the Securities and Exchange Commission (SEC)
  • Required to notice-file with the state before acting as a federal covered investment adviser in the state (see NOTICE FILING below)

INITIAL LICENSING

To become a licensed Investment Adviser in the state of Utah, you must submit a complete application, which includes all of the following:

• The applicant must apply through the Investment Adviser Registration Depository (IARD), an online database administered by the NASD. To access to the IARD system, you must complete the Entitlement process, which you can begin by clicking HERE.
  
• Once entitled to use the IARD system, you must electronically file the following through the IARD, pursuant to R164-4-2:

1. SEC Form ADV - Uniform Application for Investment Adviser Registration. This form has two parts that must be filed through the IARD. While Form ADV Part 1 is simply an online form, Part 2 (or a brochure that contains at least the same information) is filed by submitting a text-searchable PDF copy of the form (or brochure). To learn more about filing Form ADV or to access Form ADV resources, click HERE.
2. FINRA Form U-4 - Uniform Application for Securities Industry Registration or Transfer. This form must be filed electronically for the designated official and all investment adviser representatives to be licensed with the Division. The designated official must be a partner, officer, director, or a person occupying similar status. Instructions for the Form U-4 can be found by clicking HERE.
3. Exams - Proof that designated official and each investment adviser representative have passed either of the following exams:
   

   A) Series 65 Exam - Uniform Investment Adviser Licensing Exam (UIALE); or

   B) Series 66 Exam - Uniform Combined State Law Exam.

   Refer to Section 7 of the Form U-4 Instructions by clicking HERE.

1. Filing Fee(s) - All Investment Adviser fees are submitted electronically through the IARD payment system, not the state.
   
   • State Covered Investment Adviser: $75.00 covers both the firm and the designated official; $30.00 for each investment adviser representative.
     
   • Federal Covered Notice Filer: $75.00 covers the firm; $30.00 for each investment adviser representative with a place of business in Utah.

• In addition, the following must be submitted directly to the Division:

1. Designated Official Information–A State Covered Investment Adviser must identify its designated official in a letter submitted to the Division.
   
2. Custody Information–A State Covered Investment Adviser must state in a letter submitted to the Division whether they will have custody over clients’ assets. If so, R164-4-4 and R164-4-5 outline the minimum financial requirements of either:
   

   A) Providing the Division with proof of a bond in the amount of at lease $35,000; or

   B) Providing the Division with an audited balance sheet demonstrating a minimum net worth of at least $35,000, which must be maintained at all times.

3. Discretionary Authority Information – A State Covered Investment Adviser must state in a letter to the Division whether they will have discretionary authority in a clients’ accounts. If so, R164-4-4 and R164-4-5 outline the minimum financial requirements of either:
   
   

   A) Providing the Division with proof of a bond in the amount of at lease $10,000; or

   B) Providing the Division with an audited balance sheet demonstrating a minimum net worth of at least $10,000, which must be maintained at all times.

4. Audited Financial Statements – Regardless of the requirements for custody or discretionary authority, if the Investment Adviser must submit audited financial statements if required under Item 14 of Form ADV Part 2.
   
5. Division Form 4-5BIA – Corporate Indemnity Bond of Investment Adviser. If the Investment Adviser is required by custody or discretionary authority to be bonded, it must be on or in substantially the same form as Division Form 4-5BIA (see R164-4-2, R164-4-4 and R164-4-5). Click HERE for a PDF copy of the Form 4-5BIA if there is discretionary authority. Click HERE for a PDF copy of the Form 4-5BIA if there is custody authority. If the Applicant is not required to be bonded or chooses to demonstrate a minimum net worth instead, Form 4-5BIA is not required.

LICENSE RENEWAL

All licenses expire on December 31 of each year. To renew a license as an Investment Adviser or Investment Adviser Representative, submit the following to the IARD:

1. SEC Form ADV - Each year you must file an annual amendment to the Form ADV.
2. Renewal Fees

• State Covered Investment Adviser: $75.00 covers both the firm and the designated official; $30.00 for each investment adviser representative.
  
• Federal Covered Investment Adviser: $75.00 covers the firm; $30.00 for each investment adviser representative with a place of business in Utah.

LICENSE WITHDRAWAL

To withdraw an application or terminate an Investment Adviser license, the firm must file with the IARD SEC Form ADV-W.

NOTICE FILING REQUIREMENTS FOR FEDERAL COVERED ADVISORS

Click HERE for notice filing requirements for Federal Covered Investment Advisers registered with the SEC.