What does SEC-registered mean?
The SEC registration - an easy-to-access vital source of information
In order for a Swiss wealth manager or family office to do business with US clients living in the US or abroad, they are required to register with the SEC. The registration enables the Swiss SEC RIA to communicate freely with American clients, travel to the US on business without restrictions and promote their wealth management services on US soil.
Investment advisers generally are regulated by the SEC or state securities authorities. The SEC typically regulates investment advisers (RIAs) that have assets under management in excess of USD 100,000,000. Investment advisers that do not meet this threshold generally are regulated by the states. The SEC registers investment adviser firms but does not separately register individual representatives of investment adviser firms. The states register investment adviser firms, and many separately register individual investment adviser representatives.
Both the SEC and the states may require certain investment advisers to hedge funds, venture capital funds, and other private funds that are not required to be registered (Exempt Reporting Advisers) to instead file reports with them. SEC Registration Form ADV has two parts.
Take a close look at Form ADV Part 1, Part 2 and Part 3
Part 1 contains information about the adviser's business and whether the adviser has had problems with regulators or clients.
Part 2 sets out the minimum requirements for a written disclosure statement, commonly referred to as the “brochure,” which advisers must provide to prospective clients initially and to existing clients annually.
The brochure describes, in a narrative format, the adviser’s business practices, fees, conflicts of interest, and disciplinary information. Before you hire an investment adviser, always ask for and carefully read all parts of the Form ADV.
Part 3 - Form CRS
Every firm that offers services to a retail investor must file a relationship summary with the SEC and deliver it to each retail investor. A retail investor is a natural person, or the legal representative of such natural person, who seeks to receive or receives services primarily for personal, family or household purposes.
The relationship summary is designed to assist retail investors with the process of deciding whether to (i) establish an investment advisory or brokerage relationship, (ii) engage a particular firm or financial professional, or (iii) terminate or switch a relationship or specific service.
On June 5, 2019, the SEC adopted Form CRS and new rules, as well as amendments to its forms and rules, under both the Investment Advisers Act of 1940 (“Advisers Act”) and the Securities Exchange Act of 1934 (“Exchange Act”).
ADV Part 1 - Table of Contents
Item 1 – Identifying Information
Item 2 – SEC Registration/Reporting
Item 3 – Form of Organization
Item 4 – Successions
Item 5 – Information About Your Advisory Business
Item 6 – Other Business Activities
Item 7.A – Financial Industry Affiliations
Item 7.B – Private Fund Reporting
Item 8 – Participation or Interest in Client Transactions
Item 9 – Custody
Item 10 – Control Persons
Item 11 - Disclosure Information
Item 12 – Small Businesses
Schedule A – Direct Owners and Executive Officers
Schedule B – Indirect Owners
Schedule D – Additional Information
Schedule R – Relying advisers
ADV Part 2 - Table of Contents (Content may vary)
1. Cover page
2. Material Changes
3. Table of Contents
4. Advisory Business
5. Fees and Compensation
6. Performance-Based Fees and Side-by-Side Management
7. Types of Clients
8. Methods of Analysis, Investment Strategies and Risk of Loss
9. Disciplinary Information
10. Other Financial Industry Activities and Affiliations
11. Code of Ethics, Participation or Interest in Client Transactions and Personal Trading
12. Brokerage Practices
13. Review of Accounts
14. Client Referrals and Other Compensation
16. Investment Discretion
17. Voting Client Securities, Trade Errors and Class Actions
18. Financial Information
ADV Part 3 - Form CRS - Client Relationship Summary
It's main purpose is to provide retail investors with simple, easy-to-understand information about the nature of their relationship with their financial professional.
Where applicable, each brochure provided to clients must be accompanied by a “brochure supplement” that includes information about the specific individuals, acting on behalf of the adviser, who actually provide investment advice and interact with the client. An adviser must deliver the brochure supplement to the client before or at the time that the specific individual begins to provide investment advice to the client.
The comfortable way to get to know Swiss SEC RIAs
AWS enables you to browse through Swiss SEC RIAs and other pro-American wealth management and service providers. Swiss SEC RIAs are listed alphabetically and regionally. You can locate and thoroughly evaluate the background of the Swiss SEC RIAs you may want to do business with - as part of the evaluation process, before you make any decisions.
All listings are according to the information provided in the SEC registration and the ADV Part 2 on the IAPD website.
Text and picture source: sec.gov SEC