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SEC RIA Registration Kit

📅 Updated Dec 2025 ⏱ 28 min read 📋 SEC Compliance

Overview

This comprehensive kit provides everything you need to register as a Registered Investment Adviser (RIA) with the SEC. Whether you're building a robo-adviser platform, algorithmic trading service, or traditional investment advisory firm, this guide walks through the complete registration process, required documentation, and ongoing compliance obligations.

SEC registration is required for investment advisers with over $110 million in assets under management (AUM), or those who qualify under specific exemptions or state requirements. The registration process involves filing Form ADV through the Investment Adviser Registration Depository (IARD), establishing comprehensive compliance policies, and maintaining detailed books and records.

⚠ Registration Timeline

Plan for 45-90 days from start to finish. The SEC has 45 days to review your Form ADV filing, and you'll need time beforehand to draft policies, establish procedures, and prepare required documentation. You cannot start operating as an RIA until your registration is effective.

Form ADV Parts 1 and 2

Form ADV is the central registration document for investment advisers. It consists of two parts with different purposes and audiences.

Form ADV Part 1: Regulatory Filing

Part 1 is filed electronically through the IARD system and contains detailed information about your business, ownership, clients, employees, and regulatory history. Key sections include:

💡 AUM Calculation for Tech Platforms

Robo-advisers and automated platforms calculate AUM based on regulatory assets under management (RAUM), not total platform assets. Only include accounts where you provide continuous and regular supervisory or management services. Accounts where users self-direct trades don't count toward AUM thresholds.

Form ADV Part 2: Client Brochure

Part 2 is written in plain English and must be delivered to clients. It's effectively your firm's disclosure document. Part 2 has two components:

Part 2A: Firm Brochure

Narrative description of your advisory business, fees, conflicts of interest, disciplinary history, and other material information clients need to evaluate your services.

Part 2B: Brochure Supplement

Individual disclosure for each supervised person who provides investment advice to clients. Must include education, business background, disciplinary history, and other relevant information.

Required Disclosures in Part 2A

Your firm brochure must include these specific items:

⚠ Common Form ADV Mistakes

For tech platforms: Understating conflicts of interest, failing to disclose data monetization arrangements, incomplete descriptions of algorithmic trading strategies, and failing to update AUM calculations quarterly. The SEC scrutinizes robo-adviser disclosures heavily.

Brochure and Brochure Supplement

The brochure (Part 2A) and brochure supplement (Part 2B) serve as your primary client-facing disclosure documents. They must be written in plain English, avoid legal jargon, and provide material information in a format clients can understand.

Delivery Requirements

Writing Effective Brochures for Tech Platforms

Technology-driven advisory platforms face unique disclosure challenges. Your brochure should address:

💡 Plain English Standard

The SEC requires "plain English" which means: short sentences, definite concrete everyday words, active voice, no legal jargon or highly technical terms without explanation, and no multiple negatives. Test your brochure with someone outside your industry.

Compliance Policies and Procedures

Rule 206(4)-7 under the Advisers Act requires you to adopt and implement written policies and procedures reasonably designed to prevent violations of the Advisers Act. These must be tailored to your specific business model.

Required Policy Areas

At minimum, your compliance program must address:

Policy Area Key Requirements Platform-Specific Considerations
Portfolio Management Investment strategy review, suitability determinations, rebalancing procedures Algorithm governance, model validation, backtesting protocols
Trading Practices Best execution, trade allocation, trade errors API reliability, order routing logic, execution quality monitoring
Proprietary Trading Principal transactions, agency cross, affiliated product use Conflicts when platform uses own investment products
Code of Ethics Personal trading, insider trading prevention, gifts and entertainment Employee access to client data, use of proprietary algorithms
Privacy and Data Security Reg S-P compliance, safeguarding client information Encryption, access controls, third-party vendor management
Business Continuity Disaster recovery, data backup, emergency operations Cloud provider redundancy, failover procedures, data recovery testing
Marketing and Advertising Substantiation, performance advertising, testimonials App store claims, social media, influencer partnerships
Custody and Assets Surprise exams if required, account statements Integration with qualified custodians, asset movement monitoring

Chief Compliance Officer (CCO)

You must designate a Chief Compliance Officer responsible for administering your compliance program. The CCO should report directly to senior management or the board. Key responsibilities:

⚠ CCO Qualifications

The SEC expects your CCO to have appropriate expertise for your business model. For algorithmic trading platforms, this often means someone who understands both securities law and the technology. Some firms hire dual-role compliance/technology officers or pair a compliance professional with a technology advisor.

Code of Ethics

Rule 204A-1 requires all registered investment advisers to adopt a written code of ethics. The code must set forth standards of business conduct, require compliance with securities laws, and address personal trading by access persons.

Mandatory Code Provisions

Your code of ethics must include:

Who Are "Access Persons"?

Access persons include any supervised person who has access to nonpublic information about client transactions or portfolio holdings, or who makes securities recommendations to clients. For tech platforms, this typically includes:

💡 Exemptions and Exceptions

The code can exclude certain securities from reporting requirements: direct obligations of the U.S. government, bankers' acceptances, bank certificates of deposit, commercial paper, shares of registered open-end mutual funds (but not ETFs). Most platforms maintain exemptions for mutual funds to reduce administrative burden.

Personal Trading Surveillance

You must implement procedures to detect and prevent prohibited personal trading. This includes:

Custody Rule Considerations

Rule 206(4)-2 (the "Custody Rule") governs how investment advisers safeguard client assets. "Custody" is broader than you might think - it doesn't just mean physically holding securities.

When You Have Custody

You have custody of client assets if you:

⚠ Inadvertent Custody

Many platforms inadvertently trigger custody by receiving client checks made payable to the adviser or having authority to move money between client accounts. Even if you use a third-party custodian for safekeeping, you may still be deemed to have custody based on your authority over the accounts.

Custody Rule Requirements

If you have custody, you must:

Exceptions to Surprise Exam

You can avoid the surprise examination requirement if:

Custody for Tech Platforms

Most robo-advisers and algorithmic platforms structure to avoid direct custody by:

✓ Advisory Fee Deduction Safe Harbor

You can deduct advisory fees from client accounts without triggering full custody requirements if you meet these conditions: (1) client provides written authorization, (2) client receives quarterly statements from custodian showing fee deduction, (3) you send concurrent invoice or fee statement to client, (4) you notify custodian of amount of fee in advance.

Books and Records Requirements

Rule 204-2 specifies extensive books and records requirements. You must maintain these records for specified retention periods and make them available for SEC examination.

Required Records and Retention Periods

Record Type What to Maintain Retention Period
Partnership/Corporate Records Articles of incorporation, partnership agreements, minute books Life of firm + 3 years
Financial Records Ledgers, journals, cash receipts/disbursements, trial balances 5 years, first 2 in office
Securities Records All securities transactions, purchases, sales, positions 5 years, first 2 in office
Client Records Names, addresses, account information 5 years, first 2 in office
Advisory Agreements All signed advisory contracts 5 years after termination, first 2 in office
Order Memoranda Records of orders and instructions from clients 5 years, first 2 in office
Confirmations All trade confirmations and account statements 5 years, first 2 in office
Written Communications All emails, letters, circulars relating to advisory business 5 years, first 2 in office
Performance Records All calculations supporting performance claims 5 years, first 2 in office
Code of Ethics Records Holdings reports, transaction reports, violation records 5 years, first 2 in office
Compliance Records Annual compliance reviews, testing results, CCO reports 5 years, first 2 in office
Form ADV Copies of all Form ADV filings and amendments 5 years, first 2 in office

Electronic Records

Rule 204-2(g) permits records to be maintained electronically if you:

💡 Cloud Storage and Third-Party Systems

You may use cloud-based storage or third-party recordkeeping systems, but you remain responsible for compliance. Ensure your vendor agreement guarantees you can access records immediately and that the vendor won't delete records without your authorization. SEC examination staff can request access to third-party systems during exams.

Platform-Specific Records

Technology-driven platforms should maintain additional records to document algorithmic decision-making:

Annual Updating Amendment Process

All registered investment advisers must file an annual updating amendment to Form ADV within 90 days of the end of your fiscal year. This keeps your registration current and accurate.

Annual Amendment Requirements

Other-Than-Annual Amendments

You must promptly amend Form ADV when certain information becomes inaccurate:

⚠ Material Change Definition

A change is "material" if a client would consider it important in evaluating whether to hire or continue the advisory relationship. Examples: changes to fee structure, new conflicts of interest, changes in disciplinary history, significant new business lines, changes in investment strategies offered.

Client Brochure Delivery Obligations

Within 120 days of fiscal year end, you must either:

Most firms deliver the summary of material changes with an offer to provide the full brochure upon request. The summary must:

Annual Compliance Review

In addition to the Form ADV filing, your CCO must conduct an annual review of your compliance program and prepare a written report to senior management. The review should assess:

Annual Amendment Checklist

  • Review and update all Form ADV Part 1 items for accuracy
  • Calculate year-end regulatory assets under management
  • Review and update Form ADV Part 2A (firm brochure)
  • Update Part 2B supplements for all supervised persons
  • Prepare summary of material changes
  • File annual amendment through IARD within 90 days of fiscal year end
  • Deliver brochure or summary to all clients within 120 days of fiscal year end
  • Complete annual compliance review
  • Prepare and deliver CCO annual report to management
  • Review and update all written compliance policies
  • Conduct employee compliance training
  • Document completion of all annual obligations

Step-by-Step Registration Process

Follow these steps to complete your SEC registration:

Step 1: Obtain CRD Number (Weeks 1-2)

Step 2: Draft Compliance Policies (Weeks 2-4)

Step 3: Prepare Form ADV (Weeks 3-5)

Step 4: Establish Custodial Relationships (Weeks 3-6)

Step 5: File Form ADV (Week 6)

Step 6: SEC Review Period (Weeks 6-12)

Step 7: Post-Effective Requirements (Week 12+)

✓ Accelerated Timeline Available

Firms with experienced compliance counsel can sometimes compress this to 6-8 weeks, but rushing increases the risk of errors or deficient filings that delay approval. Build buffer time for SEC questions and revisions.

Registration and Ongoing Costs

Budget for these expenses when planning your RIA registration:

Initial Registration Costs

Expense Estimated Cost Notes
IARD Organizational Fee $150 One-time fee for CRD number
SEC Filing Fee $150-$6,890 Based on AUM tiers
Legal Fees (Form ADV) $5,000-$25,000 Depends on complexity
Compliance Policies $3,000-$15,000 Manual development or templates
Errors & Omissions Insurance $2,000-$10,000/year Required by most custodians
Fidelity Bond $500-$2,000/year If you have custody

Ongoing Annual Costs

Ongoing Compliance Obligations

After registration, you must maintain continuous compliance with SEC rules:

Quarterly Obligations

Annual Obligations

As-Needed Obligations

💡 Compliance Calendar

Create a compliance calendar with all deadlines, testing dates, and recurring obligations. Many firms use compliance management software (MyComplianceOffice, ComplySci, RIA in a Box) to automate reminders and track completion of required tasks.

Additional Resources

Helpful resources for RIA registration and compliance:

SEC Resources

Industry Organizations

Compliance Tools

Disclaimer: This guide provides general educational information about SEC RIA registration. It is not legal advice and does not create an attorney-client relationship. SEC registration requirements are complex and fact-specific. Consult with qualified securities counsel before filing your Form ADV or making compliance decisions. The SEC's rules and interpretations change frequently - verify current requirements before relying on any information in this guide.