Our “turn-key” investment adviser registration program for the Commonwealth of Massachusetts includes:

• Setting up your firm’s account on the Investment Adviser Registration Depository (IARD) system
• Acting as liaison with the Massachusetts Securities Division
• Facilitating the payment of all Massachusetts registration fees
• Preparing and filing Form ADV Part 1 via the IARD system
• Preparing and filing Form ADV Part II via the IARD system
• Drafting and filing investment advisory and/or financial planning agreements
• Drafting a compliance manual in conformity with the Massachusetts Uniform Securities Act
• Drafting of the privacy notice
• Filing Form U4 to register investment adviser representatives

Important Additional Information for Massachusetts Registrants:

Positive Net Worth Requirement

Investment advisors registering in Massachusetts that have (i) custody; (ii) discretionary authority or (iii) require the payment of more than $500 in advisory fees more than 6 months in advance must include in the material sent to the Massachusetts Securities Division:

1. Evidence of a separate, segregated, liquid account of $10,000 for (i) and (iii) above and evidence of positive net worth or a separate, segregated, liquid account of $5,000 for (ii) above and evidence of a positive net worth; or

2. A copy of a $10,000 surety bond.

Evidence of positive net worth must be demonstrated by a certified balance sheet prepared in accordance with GAAP.

The positive net worth requirement is not applicable if investment adviser’s principal place of business is in a state other than Massachusetts, the investment adviser is registered in such state and the investment adviser is in compliance with that state’s financial requirements.

Compliance Requirements

In a Policy Statement issued by the Massachusetts Securities Division, it was noted that existing state regulations require state-registered investment advisers to adopt and implement written compliance policies and procedures in accordance with the provisions of the SEC Compliance Rule.

In keeping with the requirements of the SEC Compliance Rule, all Massachusetts-registered investment advisers must: (i) adopt and implement policies and procedures reasonably designed to prevent violations of state and federal securities laws; (ii) review the policies and procedures at least annually to determine their adequacy and effectiveness of their implementation; and (iii) designate a chief compliance officer responsible for administering the policies and procedures.

At a minimum, an investment adviser registered in Massachusetts must adopt and implement written policies and procedures that address the following areas of compliance concern:

• Portfolio management processes, including allocation of investment opportunities among clients and consistency of portfolios with clients' investment objectives, disclosures by the adviser, and applicable regulatory restrictions;
• Trading practices, including procedures by which the adviser satisfies its best execution obligation, uses client brokerage to obtain research and other services ("soft dollar arrangements"), and allocates aggregated trades among clients;
• Proprietary trading of the adviser and personal trading activities of supervised persons;
• The accuracy of disclosures made to investors, clients, and regulators, including account statements and advertisements;
• Safeguarding of client assets from conversion or inappropriate use by advisory personnel;
• The accurate creation of required records and their maintenance in a manner that secures them from unauthorized alteration or use and protects them from untimely destruction
• Marketing advisory services, including the use of solicitors
• Processes to value client holdings and assess fees based on those valuations;
• Safeguards for the privacy protection of client records and information; and
• Business continuity plans.

Code of Ethics Requirements

The Massachusetts Securities Division has strongly recommended that state-registered advisors adopt codes of ethics and generally comply with the Code of Ethics Rule adopted by the SEC. Pursuant to the SEC Code of Ethics Rule, an investment adviser’s codes of ethics must, at a minimum:

• Set forth a standard of business conduct expected of advisory personnel. The standard chosen must reflect the adviser's fiduciary obligations and those of its supervised persons, and must require compliance with the federal securities laws.
• Include provisions reasonably designed to prevent access to material non-public information about the adviser’s securities recommendations and client securities holdings and transactions.
• Require an adviser's "access persons" to periodically report their personal securities transactions and holdings to the adviser's chief compliance officer or other designated person.
• Require access persons to pre-clear investments in initial public offerings and private placements.
• Require prompt internal reporting of any violations of the code of ethics to the investment adviser’s chief compliance officer.

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Please call us toll free at 888-798-2930 for more information about our Massachusetts “Turn-Key” Registration Program.