April 16, 2014

Florida Securities Regulator Warns Investment Advisers of State Law Requirements

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. 111-203, “mid-sized” registered investment advisers (“RIAs”), those with more than $25 million of their customers’ assets under management, but less than $100 million, became state-regulated in 2012. The Florida Office of Financial Regulation (“OFR”) is reminding the thousands of formerly federal-covered RIAs they are no longer exempt from Florida securities laws.

Unless it is federally regulated, an RIA must obtain a license from OFR for each business location in Florida. The warning on OFR’s website refers to the broad definition of “branch office” at Rule 69W-200.001(9), Florida Administrative Code. Business locations meeting the definition must seek OFR’s approval by filing Form BR on the Central Registration Depository (“CRD”) System. Merely filing the form is not sufficient. OFR will consider whether the RIA is authorized by the Florida Secretary of State to operate a “brick and mortar” facility in Florida, whether the representatives and supervisor at the office are properly registered, whether their residences are sufficiently close to the proposed branch office, whether the RIA’s supervisory procedures are adequate and, generally, whether OFR is convinced physical operations of the RIA in Florida are in the public interest. By statute, no business can be conducted at the location until OFR approval has been obtained.

OFR has further warned those RIAs domiciled in Florida that Rule 69W-600.015(3), Florida Administrative Code, requires they furnish OFR a financial statement annually. The financial statement must be filed within 90 days after the firm’s fiscal year end and be prepared in accordance with the provisions of Rule 69W-300.002, Florida Administrative Code.

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About the Author


Kyle Sawicki practices in the areas of corporate law, securities, mergers and acquisitions, venture capital and corporate governance.


About the Author


Mike Underwood was a key official at the predecessor of the Florida Department of Financial Services and authored many provisions of Florida’s securities and banking laws. Since leaving government, he has become recognized as a national leader in financial services regulation, especially in Florida.  He represents securities broker-dealers, investment advisers, mortgage brokers, financial institutions and affiliated individuals in civil litigation, arbitration, regulatory investigations and enforcement actions. His experience includes defense of class actions,...


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