INVESTMENT ADVISERS & REPRESENTATIVES

Investment advisers and their representatives operating in Montana (with certain exceptions) are required to be licensed with the CSI.

All investor adviser applicants, whether for state registration or federal notice filing status, must file over the Internet through the Investment Adviser Registration Depository (IARD). The CSI may request additional information.

Applicants for investment adviser representative registration must apply via an electronic Form U-4 on the IARD system, submitted by their firm.

Renewal of investment adviser and investment adviser representative registrations takes place through the IARD system after the first weekend in November. Renewal information can be accessed at iard.com. You must renew annually by December 31.

Advisers that have less than $100 million under continuous and regular supervision or management are prohibited from registering with the SEC, and instead must register with the states.

Please see MCA, § 30-10-201 and Administrative Rule of Montana 6.10.501, respectively, for the statute and rules governing state-registered investment advisers.

MONTANA DOMICILED ADVISERS

Investment advisers located in Montana or utilizing a Montana business address generally must register prior to commencing business. Exceptions to this rule can be found at MCA, § 30-10-201(3)(b).

OUT-OF-STATE REGISTRANTS

Investment Advisors or investment advisor representatives with no place of business in Montana may have up to five Montana clients in a 12-month period without having to register. MCA, § 30-10-201(3)(c). Out-of-state investment advisers should register prior to obtaining their sixth client and then all representatives doing business with Montana clients will have to register as well.

Out-of-state investment advisers are not subject to Montana books and records requirements, but they should represent in a cover letter with their application that they are in compliance with their home state requirements. ARM 6.10.501.

REGISTRATION PROCESS

Montana requires applicants for investment adviser or investment adviser representative to register through the Investment Adviser Registration Depository (IARD).

The IARD is a national computer database operated by the Financial Industry Regulatory Authority (FINRA) and is used by the states and the Securities and Exchange Commission for registration purposes.

MONTANA FILING FEES

  • Investement Advisers—$400
  • Out-of-state Investment Adviser Representatives—$100 (If you are a Montana adviser, you will first fund the account and then request a refund of $50).

DUAL LICENSED INDIVIDUALS

A salesperson who is registered as an investment adviser representative with a broker-dealer registered as an investment adviser is only required to pay one registration fee. MCA, § 30-10-209(2)(b)((ii).

General information on the IARD system can be found on the IARD website.

SET UP YOUR ACCOUNT

  • Print and review the IARD state registration entitlement packet.
  • Fill out and send the Designating/Updating Super Account Administrator (SAA) and FINRA Entitlement Agreement (FEA) form.
  • In several weeks you will get a Confirmation Packet back from FINRA, which, among other information, will contain your IARD Number, User ID, and Password to be able to access the system over the Internet.

FUND YOUR ACCOUNT

Once you have received your Confirmation Packet and know your IARD Number you will need to fund your firm’s Daily Account before you can make any filings on the system.

You will need to deposit enough funds to cover the cost of both the registration fees for the states in which your firm and its representatives will be registering and the administration fees charged by FINRA. FINRA is currently waiving its administrative fees.

Please review IARD fees and accounting webpage for a more thorough review of the fee paying and accounting process.

FILE ONLINE

The forms below can be filed on the IARD system. Since the forms are quite lengthy, you may want to print them off and fill them in prior to attempting to fill them out online.

FORM DOWNLOADS

ABOUT THE FORMS

Form ADV Part 1: This form is filed electronically on IARD, and contains “check-the-box” and limited text fields. It requests basic information about the firm and any disciplinary history of the firm and its affiliates.

Form ADV Part 2: Form ADV Part 2 requests information on services and fees, other business activity, backgrounds of the principals of the firm, and conflicts of interest.

You must complete your ADV Part 2 by March 31, of each year. Additionally, you must deliver your ADV Part 2 by April 30 of each year, even if there are no updates. Depending on how you answer questions on Part II, you will need to provide full narrative disclosure on Schedule F (at a minimum, questions 1 and 6 require Schedule F disclosure). We commonly see issues with Schedule F, either due to no disclosure of required items, insufficient disclosure, or disclosure which conflicts with other documents, so please complete this schedule carefully and be thorough in your answers.

Form U4: This form is used to register investment adviser representatives.

HELP WITH FILING ONLINE

Further guidance on filing the forms can be found on IARD filing online webpage. FINRA maintains an IARD Help Desk at 240.386.4848, which can assist you with any filing problems.

FILING REQUIREMENTS FOR FEDERALLY COVERED INVESTMENT ADVISERS

The federal Investment Advisers Supervision Coordination Act took effect on July 8, 1997. Since that date substantive regulation of investment advisers has been divided between the Securities and Exchange Commission and the states.

However, federal covered investment advisers must still make notification filings with the CSI if they are operating above the de minimis exemption (no place of business in Montana, and five or fewer Washington clients in a 12 month period). All their investment adviser representatives with a Montana “place of business” as defined in SEC Rule 203A-3(b) must be licensed with the Division.

INVESTMENT ADVISER REGISTRATION DEPOSITORY

All federal covered advisers are required to register with the SEC and notice file with the states via the

Investment Adviser Registration Depository (IARD).

Advisers wishing to notice file in Montana should pay the $400 Montana filing fee to IARD and designate Montana on their Form ADV Part 1.

Montana has chosen to become an “automatic approval” state for new federal advisers, which means that IARD will process your Montana application and the CSI Securities Division does not require any paper filings from you.

INVESTMENT ADVISER REPRESENTATIVE REGISTRATION

All individuals employed by the adviser who render advisory services, manage client portfolios, solicit/refer clients, offer the services of the adviser, or supervise persons performing these functions, must register as investment adviser representatives, if they have a place of business in Montana or represent more than 5 Montana clients. Representative registration is accomplished by:

  • Funding the adviser’s IARD Daily Account in the amount of $100 per representative. If you are a Montana adviser, your will first fund the account and then request a refund of $50.
  • Completing and submitting a Form U-4 on the CRD system for each representative applying for Montana registration.

DUAL LICENSED INDIVIDUALS

A salesperson who is registered as an investment adviser representative with a broker-dealer registered as an investment adviser is only required to pay one registration fee. MCA, § 30-10-209(2)(b)((ii).

INVESTMENT ADVISER AND REPRESENTATIVE REGISTRATION FOR PERSONS MOVING TO MONTANA

Persons who anticipate having a place of business in Montana, or have more than five clients in our state. Must be registered with the CSI Securities Division. The length of the registration process depends upon the number of applications that the CSI Securities Division has at the time of application and the complexity of those applications. Generally, the CSI Securities Division suggests that persons initiate registration at least 90 days prior to the day they anticipate needing registration. For investment advisers registered in other states who are opening a place of business in Montana, application materials should be submitted at least 90 days before opening.

For those advisers that have a place of business in Montana prior to registration approval, please ensure that you take the following actions and adhere to the following requirements until your registration is approved:

  • Apply for registration with the state as soon as possible
  • Do not advertise;
  • Do not accept compensation for investment advisory services; and
  • Affirm that you will not advertise or accept compensation until you are registered.
Please note that failure to properly register with the state can result in administrative, civil, and criminal sanctions under the Securities Act.

In order to take a FINRA (Financial Industry Regulatory Authority) examination, you must be associated with or employed by a FINRA member firm unless you wish to take the Series 63, 65, or 66 examinations, or you have an application pending in our state that requires you to qualify by examination.

If you qualify for an exception from an association or employment with a FINRA member firm, you may register to take the required exam by submitting a Form U10 to FINRA online.

TESTING CENTER LOCATIONS

For testing center information and locations, visit FINRA’s test center webpage.

If you have problems submitting the form or payment, please contact the FINRA Call Center at 301.590.6500.

FINRA EXAMINATION EDUCATORS AND SUPPLIERS

External organizations may provide helpful educational and study materials for FINRA exams. While, the CSI does not recommend or endorse these organizations, we do receive inquiries about where potential registrants can receive study aides. Therefore, the CSI provides the following list strictly as a courtesy:

The CSI Securities Division routinely conducts examinations of our state registered investment advisors and broker-dealer firms and salespersons. As a part of the CSI Securities Division's responsibility to examine registrants, a review of required books and records will be conducted by the CSI in accordance with Mont. Code Ann. § 30-10-201(12) and Admin. R. Mont. 6.10.501. Examination costs are borne by the registrant pursuant to Mont. Code Ann. § 30-10-210. Each year the CSI will publish a list of exam priorities. For the year 2023, those priorities are:

  • Custodial arrangements
  • Suitability of trading strategy
  • Proper disclosure of outside business activities
  • Proper documentation and charging of fees
  • Annual updates to the Form ADV Part 2 (for investment advisor representatives)
  • Compliance with Regulation Best Interest