It is unlawful for a person to transact business as an investment adviser (“IA”) or an investment adviser representative (“IAR”) in South Carolina unless that person is registered as an IA or an IAR in South Carolina under the S.C. Uniform Securities Act of 2005, appropriately registered through the SEC, or exempt from registration. See S.C. Code Ann §§ 35-1-403(a), 35-1-404(a).
A person applying for registration as an IA or an IAR under South Carolina law may file an application through the CRD/IARD system or by filing the required paperwork and paying the required fees directly to the S.C. Securities Division. S.C. Reg. § 13-403B.
Regardless of the form in which a person applies for registration, to initially apply for registration as an IA under South Carolina law, an applicant must file an application and an appropriate consent to service of process and pay the applicable registration fee and any fee imposed by the CRD/IARD system. See S.C. Code Ann §§ 35-1-406(a). The application consists of “a uniform form” and “any other financial or other information or record that the Securities Commissioner determines is appropriate.” Id. Although South Carolina does not define “a uniform form,” the Securities Division requires that an applicant file Form ADV, Parts 1A and 1B and Form ADV, Part 2. The Securities Division also requires the following to be submitted: financial statements from an IA with a signed verification statement; a surety bond, if the IA does not meet its net worth and capital requirements, S.C. Reg. § 13-406; advisory contract(s) used; and a list of IARs with name, place of business in South Carolina, and CRD number.
To initially apply for registration as an IAR under South Carolina law, an applicant must file an application and an appropriate consent to service of process, pass one or more required exams (or hold one or more of several specific professional designations), and pay the applicable registration fee and any fee imposed by the CRD/IARD system. See S.C. Code Ann §§ 35-1-406(a), S.C. Reg. §§ 13-401B, C. Although South Carolina does not define “a uniform form,” the Securities Division requires that an applicant file Form U4.
Registration as an IA or an IAR under South Carolina law is on a calendar year basis. Once registered as an IA or an IAR in under South Carolina law, that registration expires on December 31 of the applicable year. S.C. Code Ann §§ 35-1-406(d).
To renew a registration as an IA or an IAR, the IA and IAR must pay the filing fee to renew, pay any fee imposed by the CRD/IARD system, pass the exam requirements (an IAR should have already satisfied this requirement at the time of initial registration as an IAR), and file any records required by rule adopted or order issued. Because no regulation currently exists imposing additional filing requirements and orders are generally specific to an individual applicant, most IAs and IARs who are renewing their registrations in South Carolina merely have to pay their South Carolina renewal fee by December 31 to renew their registration. (However, be aware that if a person is using the CRD/IARD system to apply for renewal registration, the applicable renewal fees must be in that person’s financial account at CRD/IARD weeks before December 31 – for example, for 2011 renewals, the renewal fees must be in the account by December 13, 2010).
If the South Carolina Securities Division asks a renewing IA or IAR for additional documentation at or near the time of renewal, the Securities Division is likely asking for that documentation under the applicable audit or inspection provisions of South Carolina law, see S.C. Code Ann. § 35-1-411(d), not as part of the renewal process.
The Securities Division has a web page that may provide some useful information.
