1. (a) Investment adviser and investment adviser representative application requirements. A complete application consists of the following and must be filed in paper form with the Securities Commissioner, except in such time as the Investment Adviser Registration Depository System (IARD) becomes available:

   1. (1) Form ADV;
   2. (2) Form U-4 for the designated officer and a Form U-4 for each investment adviser representative or solicitor to be registered;
   3. (3) Form 133.16, an agreement for maintenance and inspection of records;
   4. (4) a copy of articles of incorporation, partnership agreement, articles of association, trust agreement, or other documents which indicate the form of organization, certified by the jurisdiction or by an officer or partner of the applicant;
   5. (5) all foreign corporations and other nonresident applicants must also file an irrevocable written consent to service of process utilizing Forms U-2 and U-2A, or Form 133.8;
   6. (6) assumed name certificate, if applicable. The improper use by an applicant of an assumed name containing "incorporated," "corporation," "limited," or an abbreviation of one of those words, may be grounds for denying registration of the applicant if such designation is thereby misleading;
   7. (7) a balance sheet prepared in accordance with generally accepted accounting practices reflecting the financial condition of the investment adviser as of a date not more than 90 days prior to the date of such filing. The balance sheet should be prepared by independent certified public accountants or independent public accountants, or must instead be attested by the sworn notarized statement of the applicant's principal financial officer. If attested by the principal financial officer of the applicant, such officer shall certify as follows: I am the principal financial officer of (name of investment adviser). The accompanying balance sheet has been prepared under my direction and control and presents fairly its financial position on the dates indicated to the best of my knowledge, belief, and ability. (Signature and Title).
   8. (8) Form 133.23, a franchise tax certification form;
   9. (9) disclosure document or Part II of Form ADV;
   10. (10) a copy of the investment adviser's standard advisory contract;
   11. (11) fee schedule;
   12. (12) any other information deemed necessary by the Securities Commissioner to determine an investment adviser's financial responsibility or an investment adviser's or investment adviser representative's business repute or qualification; and
   13. (13) the appropriate registration fee(s).
2. (b) Designated officer registration. Investment advisers, other than an individual filing as a sole proprietor, must file a Form U-4 application to register an officer or partner in connection with the registration of the investment adviser. The officer or partner must be a control person of the investment adviser. The officer or partner must complete the necessary registration and examination requirements. If the officer or partner resigns or is otherwise removed from his or her position, the firm shall make an application to register another officer or partner within 30 days.
3. (c) Branch office registration and inspection. A request for registration of a branch office of an investment adviser may be made upon initial application of the investment adviser or by amendment to a current registration. No investment advisory activity may occur in any branch office location until such time as the investment adviser receives notification from the Securities Commissioner that such location has been approved as a branch office. The request for registration of a branch office may be made in letter form or by the submission of such information on the Form ADV. The fee for registration of each branch office is $25. Simultaneous with the request for registration of a branch office, a branch office manager must be named. The manager must satisfy the examination qualifications required of the investment adviser before the branch office may be registered. A branch office manager is responsible for supervision of the activities of the branch office. Within 10 business days from when a branch office manager ceases to be employed or registered in such capacity by the investment adviser, a new branch office manager, qualified by passage of the appropriate examinations, must be named. Absent the designation of a new branch manager to the Commissioner within the 10 business day period, the registration of a branch office whose manager ceases to be employed as such by an investment adviser shall be automatically terminated. The branch office registration may be reinstated upon the designation of a qualified branch office manager and payment of the branch office registration fee. Each branch office registered with the Commissioner is subject to unannounced inspections at any time during normal business hours.

4. (d) Withdrawal and abandonment of an investment adviser or investment adviser representative initial application for registration.

   1. (1) Any initial application for investment adviser or investment adviser representative registration that fails to meet registration requirements within six months of the filing date of the application will be considered withdrawn without prejudice. A copy of this subsection will be mailed to the applicant at least 30 days prior to the withdrawal of the application pursuant to this subsection.
   2. (2) If an applicant for registration with the Securities Commissioner as an investment adviser or investment adviser representative fails to make any type of response to the most recent written request for information relating to an application that has been pending for six months, the application will be considered withdrawn. This withdrawal will occur automatically if the applicant fails to respond to the most recent written request for information sent by certified mail to the applicant's address as set forth in the application. This certified written request shall inform the applicant that the application will be considered withdrawn if a response to the request for information is not received within 30 days from the date of the certified letter. A copy of this subsection and the most recent written request for information will be included with the certified letter.

5. (e) Investment Adviser Registration Depository (IARD).

   1. (1) Whenever the Texas Securities Act or Board rules require the filing of an application with the Securities Commissioner for investment adviser or investment adviser representative registration, such application must be filed electronically via the IARD, which is jointly operated by the NASD, the North American Securities Administrators Association, Inc. (NASAA), and the Securities and Exchange Commission (SEC). Applicants shall use the applicable uniform forms for the submission of the filing in question and shall supplement their electronic filing by filing, in paper form, the items listed in paragraphs (3)-(12) of subsection (a) of this section, directly with the Commissioner.
   2. (2) Uniform forms submitted through the IARD that designate Texas as a jurisdiction in which the filing is to be made are deemed to be filed with the Securities Commissioner and constitute official records of the Board.

6. (f) Implementation of IARD.

   1. (1) All investment advisers registered with the Securities Commissioner as of July 31, 2001, must make a transitional filing with the IARD no later than August 1, 2001.
   2. (2) All investment advisers seeking registration with the Securities Commissioner after August 1, 2001, must file Part I of Form ADV and the filing fee via the IARD.
   3. (3) All persons seeking registration as an investment adviser representative must file the Form U-4 and the appropriate fee via IARD upon the ability of the system to accept such filings.

Source Note:The provisions of this §116.2 adopted to be effective August 12, 2001, 26 TexReg 5799.