Policy Statement

Proposed Regulation Which Will Require Investment Advisers and Investment Adviser Representatives to Use the IARD and the CRD

June 5, 2003

(2) Registration and Notice Filing Procedures.

(a) Registration of Investment Advisers.

1. Pursuant to section 202(a) of the Act, the Secretary designates the web-based Investment Adviser Registration Depository (the “IARD”) and the Central Registration Depository (the “CRD”) both operated by the NASD to receive and store filings and collect related fees from investment advisers and investment adviser representatives on behalf of the Securities Division of the Office of the Secretary of the Commonwealth (the “Division”). All applications for initial registration as an investment adviser shall be made via the IARD located at www.iard.com. [Any documents required to be filed with the Division that cannot be accepted by the IARD, including, but not limited to, Part II of the Form ADV and the section 202(a) affidavit described in 950 CMR 12.205(2)(a)2 shall be filed directly with the Division.] Each application for registration as an investment adviser shall contain:

a. The Form ADV, including all parts and schedules.
b. If required by 950 CMR 12.205(5), financial statements or a surety bond evidencing compliance with the minimum financial requirements set forth therein.
c. A Form U-4 for each person listed on Schedule A or Schedule B of Form ADV as a sole proprietor, executive officer, director, partner or controlling member (or person occupying a similar status or performing similar functions).
d. A non-refundable registration fee of $300.
e. A non-refundable registration fee of $50 for each person listed on Schedule A or Schedule B of the Form ADV as a sole proprietor, executive officer, director, partner, controlling member (or person occupying a similar status or performing similar functions), unless such person, other than a sole proprietor, files an affidavit described in 950 CMR 12.205(2)(a)2. [See 950 CMR 12.205(2)(c) for investment adviser representative registration requirements.]
Note: Each executive officer, director, partner, controlling member, (or person performing similar functions) listed on Schedule A or Schedule B of the Form ADV or sole proprietor who acts as an investment adviser representative is automatically registered as an investment adviser representative when the investment adviser’s application is made effective.

2. Each executive officer, director, partner, controlling member or sole proprietor (or person occupying a similar status or performing similar functions) is presumed to be acting as an investment adviser representative and thus registered automatically unless such person, other than a sole proprietor, files with the Division an affidavit stating that he or she performs no activity for the investment adviser that would require him or her to register as an investment adviser representative. Such affidavit shall be in substantially the following form: "The undersigned hereby swears or affirms that as an [executive officer, director, partner, controlling member (or person occupying a similar status or performing similar functions)] of [name of investment adviser], I (a) make no recommendations nor otherwise render advice regarding securities; (b) do not manage accounts or portfolios for clients; (c) do not determine which recommendations or advice regarding securities should be given; (d) neither solicit, offer nor negotiate the sale of investment advisory services; and, (e) do not supervise any employee who performs any of the foregoing activities."
3. Every registration as an investment adviser shall expire on December 31. An investment adviser registration shall be renewed annually via the IARD located at www.iard.com. The renewal application shall contain:

a. The information requested by the IARD.
b. The information requested by the CRD for each investment adviser representative whose registration is being renewed. [See 950 CMR 12.205(2)(c)2.]
c. A non-refundable registration fee of $300 for the investment adviser and non-refundable registration fees of $50 for each investment adviser representative.

(b) Notice Filing Procedures for Federal Covered Advisers.

1. Pursuant to section 202(b) of the Act, the Secretary designates the web-based Investment Adviser Registration Depository (the “IARD”) and the Central Registration Depository (the “CRD”) both operated by the NASD to receive and store filings and collect related fees from Federal Covered Advisers and investment adviser representatives on behalf of the Securities Division of the Office of the Secretary of the Commonwealth (the “Division”). Each Federal Covered Adviser required to provide notice shall file the following with the Division via the IARD located at www.iard.com.

a. A copy of its complete, most recent, Form ADV, including all parts and schedules, on file with the U.S. Securities and Exchange Commission. [Note: Until the IARD is able to accept it, Part II of the Form ADV need not be filed with the Division.]
b. A non-refundable notice-filing fee of $300.
c. A non-refundable registration fee of $50 for each investment adviser representative required to be registered in Massachusetts. [See 950 CMR 12.205(2)(c) for investment adviser representative registration requirements.]
2. Each Federal Covered Adviser’s status as a notice filer shall expire on December 31 and must be renewed annually via the IARD located at www.iard.com. The renewal application shall contain:
a. The information requested by the IARD.
b. The information requested by the CRD for each investment adviser representative whose registration is being renewed. [See 950 CMR 12.205(2)(c)2.]
c. A non-refundable notice-filing fee of $300 for the investment adviser and a non-refundable registration fee of $50 for each investment adviser representative.

(c) Registration of Investment Adviser Representatives.

1. Pursuant to section 202(a) of the Act, the Secretary designates the web-based Central Registration Depository (the “CRD”) operated by the NASD to receive and store filings and collect related fees from investment adviser representatives on behalf of the Securities Division of the Office of the Secretary of the Commonwealth (the “Division”). All applications for initial registration as an investment adviser representative shall be made via the CRD, which may be located through www.iard.com, and shall contain:

a. A complete, current Form U-4 indicating Massachusetts as a
jurisdiction.
b. A non-refundable registration fee of $50.
c. Proof of meeting the examination or certification requirements of 950 CMR 12.205(4).

2. Every registration as an investment adviser representative shall expire on December 31. An investment adviser representative registration shall be renewed annually via the CRD, which may be located through www.iard.com, and shall contain:

a. The information requested by the CRD.
b. A non-refundable registration fee of $50.

3. Renewal registration of an investment adviser representative shall be accomplished through the investment adviser or the Federal Covered Adviser.

(3) Withdrawals, Terminations and Transfers.

(a) An investment adviser which seeks to withdraw its registration pursuant to M.G.L. c.110A, §204(e), or a Federal Covered Adviser which seeks to terminate its notice filing status shall file with the Division, via the IARD located at www.iard.com, Form ADV-W in accordance with the instructions contained therein.
(b) An investment adviser or a Federal Covered Adviser which seeks to terminate an investment adviser representative employed or associated with it, shall file with the Division, via the CRD which may be located through www.iard.com, a Form U-5 prepared in accordance with the instructions contained therein. The investment adviser or the Federal Covered Adviser shall send a copy of the Form U-5 to the terminated employee within five days after it is filed with the Division.
(c) An investment adviser or a Federal Covered Adviser shall notify the Division that it intends to employ or associate with an investment adviser representative currently registered in the Commonwealth by filing a Form U-4 with the Division, via the CRD which may be located through www.iard.com, for such representative. Such filing will be considered a new application under MG.L. c.110A, §202. If the application discloses no affirmative responses to the disclosure item of Form U-4, the investment adviser or Federal Covered Adviser may request that the effective date of the registration be accelerated.