Notice Filing Requirements

Quick Answer

Federal covered advisers register only with the SEC, but a state can require a notice filing when the adviser has a place of business there or six or more resident retail clients in 12 months. Institutional clients don't count toward that 6-client number. Notice filing is not registration, and states keep antifraud authority regardless.

The sections below cover the two triggers for a notice filing, what the filing package contains, and how far a state's authority reaches once an adviser is federal covered.

When Must a Federal Covered Adviser Notice File?

Under the Uniform Securities Act, federal covered advisers must notice file in states where they:

  • Have a place of business, OR
  • Have 6 or more retail clients who are residents of that state in a 12-month period

Only non-institutional (retail) clients count toward that 6-client threshold. Clients that are investment companies, other investment advisers, federal covered advisers, broker-dealers, banks, trust companies, savings and loan associations, insurance companies, employee benefit plans with at least $1,000,000 in assets, or governmental agencies don't count toward the number, no matter how many of them the adviser has in the state.

Think of it this way: Notice filing is like telling a state "I'm here and doing business," without asking for their permission. The SEC is still the primary regulator.

Exam Tip: Gotchas

  • Only one trigger has to be met, not both. A place of business in the state is enough on its own; so is 6 or more resident retail clients in a 12-month period, even with no office there.
  • The 6-client count only includes retail clients. Institutional clients (investment companies, other investment advisers, federal covered advisers, broker-dealers, banks, trust companies, savings and loan associations, insurance companies, employee benefit plans with at least $1,000,000 in assets, and governmental agencies) don't count toward the threshold, no matter how many the adviser has in the state.

What Does Notice Filing Require?

Notice filing typically consists of:

  • Copy of Form ADV (as filed with the SEC)
  • Consent to service of process (Form U2): an irrevocable filing appointing the Administrator as the adviser's agent to receive legal process, giving the state jurisdiction to serve the adviser in an enforcement action
  • Payment of state filing fees

Notice filing does not create state registration. The investment adviser (IA) remains federal covered.

An existing notice filing must also be renewed to remain effective, generally through an annual state renewal process and renewal fee. Amending Form ADV when information changes does not replace the separate renewal step.

No. Under the Uniform Securities Act, a person that filed a consent to service of process in connection with a previous registration or notice filing need not file another. The consent already on file with that state stays in force for later registrations, notice filings, and renewals there.

The consent appoints the Administrator or the Administrator's successor in office to receive lawful process. A change of Administrator therefore does not call for a new consent. It reaches non-criminal proceedings arising under the Act after the consent was filed, so it is not limited to the earlier filing period.

Exam Tip: Gotchas

  • One consent per state, filed once. A later registration, notice filing, or renewal in the same state does not need a second consent.
  • A new Administrator does not trigger a new consent. The consent names the Administrator and any successor in office.

Does Notice Filing Cover the Firm's IARs Too?

No. Notice filing is a firm-level filing and stops at the firm. An investment adviser representative (IAR) who has a place of business in that state, such as someone working out of a branch office where the firm notice files, must still register individually as an IAR with that state. The firm's federal covered status does not extend to its representatives.

See Investment Adviser Representative Regulation for the full IAR registration requirements.

Exam Tip: Gotchas

  • The firm's notice filing does not cover its IARs. An IAR with a place of business in the state must register there individually, even though the firm itself only notice files.

What Authority Do States Retain Over Federal Covered Advisers?

The Investment Advisers Act of 1940 sets this division of authority.

  • States cannot impose substantive regulatory requirements on federal covered advisers beyond the notice filing (with its consent to service of process and fees)
  • States may license the adviser's IARs who have a place of business in the state
  • States retain antifraud authority over all advisers operating within their borders, including federal covered advisers

Exam Tip: Gotchas

  • Notice filing is NOT registration. A federal covered IA that notice files is still registered with the SEC, not the state. But the state CAN bring antifraud actions against it.
  • States retain antifraud authority over all advisers in their borders, federal covered or not.

What Should You Check on Exam Day?

  • Know the two triggers: a place of business in the state, or at least six resident retail clients in 12 months. Institutional clients do not count toward that number.
  • Remember notice filing does not create state registration; the SEC stays the primary regulator.
  • Know the filing package and renewal: Form ADV, consent to service of process, state fees, and the separate renewal step. A consent already filed in that state is not filed again.
  • Remember the firm's notice filing does not cover its IARs; an IAR with a place of business in the state must still register there individually.
  • Remember states retain antifraud authority over every adviser operating within their borders, federal covered or not.