Notice Filing Requirements
Now that you understand the distinction between federal covered advisers and state-registered advisers, the next question is: what authority do states have over federal covered advisers operating within their borders?
What Is Notice Filing?
Notice filing is the process by which federal covered advisers inform states of their operations without undergoing full state registration. It is the state's only tool for maintaining awareness of SEC-registered advisers doing business in their jurisdiction.
- Federal covered advisers file a copy of their SEC documents (typically Form ADV) with the state
- States may require payment of a filing fee
- Notice filing allows states to collect fees and maintain records of federal covered advisers operating within their borders
Exam Tip: Gotchas
- Notice filing is NOT the same as registration. It is a simplified filing process. States cannot turn it into a full registration by adding substantive requirements.
What States Cannot Do
This is where the exam draws a clear line:
| States CAN | States CANNOT |
|---|---|
| Require notice filing | Impose additional substantive registration requirements |
| Charge filing fees | Require a separate state application |
| Maintain records of federal covered advisers | Add qualification exams beyond what the SEC requires |
| Bring antifraud enforcement actions | Mandate state-specific compliance procedures |
Exam Tip: Gotchas
- States retain antifraud authority over federal covered advisers. Notice filing limits the state's registration authority, not its enforcement authority. If the exam presents a scenario where a state takes action against a federal covered adviser for fraud, that is perfectly valid.
The Key Principle
The relationship works in one direction:
- SEC-registered advisers → File notice with states (no full registration)
- State-registered advisers → Full registration with the state securities administrator
States cannot elevate notice filing into a de facto registration process. If a state tries to impose substantive requirements beyond the filing and fee, those requirements are preempted by federal law.
Exam Tip: Gotchas
- A federal covered adviser operating in multiple states must notice file in each state where they do business. There is no single national notice filing; each state may have its own fee and filing requirements.