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Investment Advisers

An investment adviser is an individual or a firm that is in the business of giving advice about securities to clients. Investment advisors wanting to do business in Vermont must register with the Department of Financial Regulation, renew their registration annually, and may be required to complete other filings as outlined below.

ALERT: State-registered investment advisers are reminded that the SEC’s new Marketing Rule, which is incorporated into the Vermont’s security regulations via VSR § 2-2(a)(22) and § 7-3(d)(12), will become fully enforceable on November 4, 2022. The Securities Division urges firms to review the SEC’s guidance on the new Marketing Rule, which includes a “Small Entity Compliance Guide” and list of frequently asked questions. Firms should also update their written supervisory procedures to ensure compliance with the new Marketing Rule. Additionally, firms should also be aware that there is a new section on the Form ADV related to firms' marketing practices. This portion of the Form ADV must be completed when firms file their annual amendments in early 2023. 

Please send any questions about the new Marketing Rule to the Securities Division via dfr.securitiesinfo@vermont.gov. 

 State IA Firm Registration and Renewal

Applications for initial registration or renewal registration by an investment adviser will not be deemed complete until the required fee and all required submissions have been filed with the Securities Division, and the Investment Adviser Registration Depository (IARD), including any documentation requested by the Division after an initial submission. Failure to complete the application or renewal procedures as set forth below may result in termination of an application or registration. Fees will not be refunded or credited and new fees will be required upon refiling.

Investment Adviser registrations expire on December 31 of each year. Registration renewals must be filed annually through the CRD/IARD along with payment of the renewal fee of $300.00. All non-CRD/IARD filings must be delivered to the Division at the address listed below.

Rules governing the registration and the regulated activities of investment advisers, federal covered investment advisers and investment adviser representatives in the State of Vermont can be located in V.S.R. § Chapter 7.

Investment Adviser registration requirement and exemptions may be found at 9 V.S.A. § 5403.
Each investment adviser must have at least one investment adviser representative registered in Vermont.

All applications must include:

  • Part I of Form ADV filed via the Investment Adviser Registration Depository.
  • A non-refundable application fee of $300.00 submitted through the IARD.
  • A completed copy of Part II of Form ADV.
  • A copy of any document that the applicant may use in lieu of Part II of Form ADV.
  • Sample copies of all client contracts.
  • Affidavit of Investment Advisory Activity Form.
  • A certification that includes the name(s) of the designated supervisor and certifies that the applicant has established and shall maintain and enforce written supervisory procedures pursuant to V.S.R. § 7-6(a)(2).
  • A copy of the investment adviser's written supervisory policies and procedures, which shall include a copy of the investment adviser's privacy policy and cybersecurity policy. 
  • A copy of the investment advisers written Code of Ethics.
  • A copy of the Declarations page to the adviser's cybersecurity insurance policy. 
  • A current balance sheet *

(a) an investment adviser having neither custody nor discretion is not required to file a balance sheet.*(b) an investment adviser having discretion over, but not custody of, client funds or securities, or requiring payment of fees six or more months in advance and in excess of $500 per client, must file a current certified balance sheet.* (c) an investment adviser having custody of client funds, assets or securities must file a current audited balance sheet*

(a) an investment adviser having custody as described in Item 9(a) of these instructions must either meet a $35,000 minimum net worth requirement or post a bond in the amount of the net worth deficiency, rounded up to the nearest $5,000. * (b) an investment adviser having discretion as described in Item 9(b) of these instructions must meet a $10,000 minimum net worth requirement or post a bond in the amount of the net worth deficiency, rounded up to the nearest $5,000.*

Vermont's balance sheet, net worth and bonding requirements are not applicable to an investment adviser registered or licensed in a state where it maintains its principal place of business AND is in compliance with such state's requirements.

Branch Offices

Review specific filing requirements for branch offices when branch is both a broker-dealer branch and investment adviser branch. 

Notice Filing for Federal Covered Investment Advisors

Pursuant to 9 V.S.A. 5405, federal covered investment advisors must notice file with the Vermont Securities Division (the “Division”) in order to transact advisory business in Vermont. Federal covered advisors must file a notice, consent to service of process, and pay a filing fee of $300.00. Failure to properly file notice or renew a notice filing prior to transacting business in the state as a federal covered advisor is a violation of Vermont securities law.

The required notice must be filed on Form ADV with the Investment Advisor Registration Depository. A notice filing of a federal covered investment adviser will not be deemed complete until the required fee is paid and Form ADV is filed and accepted in IARD. Further information on notice filing requirements for federal covered investment advisors is contained in Section 7-4 of the Vermont Securities Regulations.

Registrations expire on December 31 of each year, regardless of when approved or filed. Federal covered advisors must file an annual renewal of the notice filing with the IARD, and pay an annual notice fee of $300.00.

Note that any individuals transacting business in Vermont as an investment advisor representative of the federal covered advisor must register with the Division as an investment advisor representative unless an exemption is met. Information regarding investment advisor representative registration is contained in 9 V.S.A. 5404, and on this page: Broker-Dealer Agent & Investment Adviser Representative Registration & Renewal.

Contact

Direct any questions concerning registration or the process to 802-828-3420 or dfr.securitiesinfo@vermont.gov.

Vermont Department of Financial Regulation
Securities Division
89 Main Street
Montpelier, VT 05620-3101

 

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Securities