IACCP Examination Study Guide

IACCP Examination Study Guide "Investment Adviser" person/firm compensated for engaging in business of (directly or indirectly) advising others on securities or the advisability of investing (or) who issues analysis/reports concerning securities - SEC vs Capital Gains Research Bureau basis of Fiduciary Rule, specifically Best Interest SEC Registration Required when 1) definition of "IA" is met (unless otherwise excepted from definition or exempt/prohibited from registration); AND $100M in AUM (optional for Mid- Sized Advisers AUM $100-115M Buffer Zone) - OR - 2) when ADVISING a Registered Investment Company - OR - 3) AUM $25-100M AND NOT registered/required to register with State OR NOT Subject to EXAMS by State Registration withdraw required for AUM under $90M - SEC Registration Optional when 1) AUM $25-100M (except NY req. at $25M) - OR - 2) Advisers Registered in 15 or more States (AUM $25M or less PROHIBITED from registering w/ SEC but held to various state requirements) EXCLUDED from Definition of "IA" are: 1) Domestic banks and bank holding companies; 2) Services SOLELY Incidental by lawyers, accountants, engineers, teachers, (and) 3) BD advisory services w/out special compensation; 4) Publishers of bona fide newspapers/mags w/Regular Circulation; 5) Advising Direct Obligations of US (bonds); 6) NRSROs (Nationally Recognized Statistical Rating Orgs; 7) Family Offices; and 8) Others designated by SEC rulemaking (such as those otherwise prohibited or exempt) - EXEMPTIONS from SEC Registration: 1) Intrastate Advisers: NOT advising, analyzing or reporting on NSE Listed Securities* and ALL Clients reside in same state as principal office (*includes securities w/ unlisted trading privileges); 2) Advisers to ONLY Insurance Companies; 3) Private Fund Advisers w/ AUM less than $150M, and Advisers to Foreign Private and Venture Capital Funds; 4) Church Plans, and certain 5) Charitable organizations 6) Registered Commodity Trading 7) Small Business Investment Companies Private Fund Adviser Exemption Criteria: PRIVATE FUND: Advise SOLELY private funds (unlimited) so long as aggregate assets of such NOT EXCEEDING $150M (per ADV annual calculation), including Non-US Advisers when ALL US clients are Qualifying Private Funds VENTURE CAPITAL: Any advising SOLELY venture capital funds FOREIGN PRIVATE: No place of business in US, Less than 15 private fund clients/investors in US, Less than $25M aggregate AUM attributed to clients/private fund investors, AND doesn't hold out to US public as an IA - Form PF (intended to Monitor Systematic Risk to US Financial System) is required by advisers to Hedge & other Private Funds, and SEC-Registered Advisers to 1 or More Private Funds having at least $150M AUM attributable to such as of last fiscal year-end Form PF filing EXEMPTION: Advisers NOT registered/required to register with SEC Dodd-Frank also resulted in changes to AUM by 1) raising registration threshold to $100M, and creating Mid-Sized adviser category w/ AUM $25-100M (w/ $100-115 Buffer Zone); and 2) "RAUM" Uniform Calculation of Gross Basis at Market Value (or fair value if n/a) to include: (i) "Securities Portfolios" (any consisting of at least 50%) and/or Private Funds to which adviser provides Regular/Continuous Supervisory or Management services; (ii) Proprietary accounts (owned in aggregate 25% or more), accts managed w/out compensation and those of foreign clients; and (iii) uncalled capital commitments to private fund(s) - Repeal of Private Adviser Exemption (per Dodd-Frank) brought into SEC's regulatory view hedge, private equity, venture capital, and other private funds by adding regulation to circumvent adviser's use of a loop-hole to avoid registration in which each fund, and not it's underlying investors, is counted as a "client" An IAR (supervised person of an Investment Advisor) is required to be licensed when it has more than 5 and with more than 10% of which are natural person clients. EXCEPTIONS: 1) Qualified Clients (person/company that immediately after entering into contract has at least $1 million AUM by IA or net worth of $2 million; 2) Irregular communication; 3) Impersonal Advisory Services are NOT required for consideration when determining an IARs licensing requirement - When is IAR licensing required and what are the exceptions? Varies by state but generally an SEC-registered