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Investment Advisers


 

How to Register and Obtain a License in Minnesota

To register in the State of Minnesota, investment advisors should first review the registration requirements defined in Minnesota Statutes Chapter 80A, Minnesota Administrative Rules Chapter 2876, and the Commissioner of Commerce’s Amended Order, dated October 31, 2013.  Then, the applicant should review the following steps:

Investment Advisors must have information on file with the Investment Advisor Registration Depository (IARD) electronic system. Once filed with IARD, the State of Minnesota reviews the information on file.  If additional information is required, the investment adviser will be contacted directly by the Department of Commerce. 

To register in the State of Minnesota, investment advisors must do the following:

Step One:

Submit Forms

Step Two:

Submit Documentation
  • Submit examples of client contracts to be used in the State of Minnesota ensuring that Minnesota law applies to the contracts.
  • Submit examples of any literature or advertising that may be used which, among other things, explains in clear terms the fee structure employed by the investment advisor.

Step Three:

Submit Financial Information

  • For investment advisers who have custody or discretionary authority over a client’s funds: You must provide audited financial statements of the firm dated within 135 days of the application including a current balance sheet.

    • If the audit is in excess of 135 days, submit an unaudited financial statement. 
    • Investment advisers who do not have custody or discretionary authority over client funds or do not require a pre-payment of $500 in fees six or more months in advance per client can also submit an unaudited financial statement or balance sheet.

Step Four:

Complete Additional Requirements

Bond Requirements

  • A surety bond of $25,000 is required to be maintained unless the applicant has no custody of or discretionary authority over, client assets and has $100,000 in net capital.

Net Worth Requirements

  • Investment Advisers with custody over client funds must maintain a minimum net worth or $35,000 if they do not have direct fee deductions. Investment advisors with discretion over a client’s funds, but without custody, must maintain a minimum net worth of $10,000.

Fee Requirements

  • To register as an investment advisor, an initial fee of $100 is required at the time of registration with IARD. Subsequently, a fee of $100 must be paid through the IARD system on an annual basis to keep registration current.

Completion of Exam

  • Provide written evidence that:
    • the supervisory or control individual of the investment advisor has passed the Series 65 exam, or has passed the Series 66 and Series 7 exam, or  otherwise qualifies for an exemption to those exam requirements, as defined in Minnesota Rule 2876.4120; and
    • at least one person employed full time in a supervisory capacity has been actively engaged in the securities business in a similar supervisory capacity for a minimum of three of the preceding five years.

Pay Fees 

  • $100 Annual fee  payable and sent directly to FINRA due upon registration and at the time of annual renewals

Register with the Secretary of State 

  • Register with the Secretary of State to do business in the State of Minnesota if you are an entity based in another state.  Please note that the State of Minnesota has adopted the national deminimus rule.

Requirements for Non-Minnesota Businesses

  1. Apply to the Minnesota Secretary of State to transact business as a foreign corporation