§ 78C-17. Registration and notice filing procedures. - North Carolina Statutes

§ 78C‑17.  Registrationand notice filing procedures.

(a)        An investmentadviser, or investment adviser representative may obtain an initial or renewalregistration by filing with the Administrator or the Administrator's designeean application together with a consent to service of process pursuant to G.S.78C‑46(b) and paying any reasonable costs charged by the designee forprocessing the filings. The application shall contain whatever information theAdministrator by rule requires concerning such matters as:

(1)        The applicant's formand place of organization;

(2)        The applicant'sproposed method of doing business;

(3)        The qualificationsand business history of the applicant; in the case of an investment adviser,the qualifications and business history of any partner, officer, or director,any person occupying a similar status or performing similar functions, or anyperson directly or indirectly controlling the investment adviser;

(4)        Any injunction oradministrative order or conviction of a misdemeanor involving a security or anyaspect of the securities business and any conviction of a felony;

(5)        The applicant'sfinancial condition and history; and

(6)        Any information tobe furnished or disseminated to any client or prospective client.

If no denial order is ineffect and no proceeding is pending under G.S. 78C‑19, registrationbecomes effective at noon of the 30th day after an application is filed. TheAdministrator may by rule or order specify an earlier effective date and may byorder defer the effective date until noon of the 30th day after the filing ofany amendment. Registration of an investment adviser automatically constitutesregistration of any investment adviser representative who is a partner,executive officer, or director, or a person occupying a similar status orperforming similar functions. After the Administrator institutes a proceedingunder G.S. 78C‑19 to postpone or deny an application for registration,withdrawal of the application shall be allowed only at such time and under suchconditions as the Administrator may by order determine.

(a1)      The Administratormay require investment advisers covered under federal law to file with theAdministrator any documentation filed with the Securities and ExchangeCommission as a condition of doing business in this State. This subsection doesnot apply to (i) an investment adviser covered under federal law whose onlyclients are those described in G.S. 78C‑16(a)(2), or (ii) an investmentadviser covered under federal law who has no place of business in this State,and during the preceding 12‑month period has had not more than fiveclients, other than those described in G.S. 78C‑16(a)(2), who areresidents of this State. A notice filing under this section may be renewed by(i) filing documents required by the Administrator and filed with theSecurities and Exchange Commission, prior to the expiration of the noticefiling, and (ii) paying the fee required under subsection (b1) of this section.A notice filed under this section may be terminated by the investment adviserby providing the Administrator notice of the termination, which shall beeffective upon receipt by the Administrator.

(b)        Every applicant forinitial or renewal registration shall pay a filing fee of three hundred dollars($300.00) in the case of an investment adviser, and seventy‑five dollars($75.00) in the case of an investment adviser representative. When anapplication is denied or withdrawn, the Administrator shall retain the fee.

(b1)      Every person actingas an investment adviser covered under federal law in this State shall pay aninitial filing fee of three hundred dollars ($300.00) and a renewal noticefiling fee of three hundred dollars ($300.00).

(b2)      Any person requiredto pay a fee under this section may transmit through any designee any feerequired by this section or by the rules adopted pursuant to this section.

(c)        A registeredinvestment adviser may file an application for registration of a successor,whether or not the successor is then in existence, for the unexpired portion ofthe year. There shall be no filing fee.

(d)        The Administratormay by rule establish minimum net capital requirements not to exceed onehundred thousand dollars ($100,000) for registered investment advisers, subjectto the limitations of section 222 of the Investment Advisers Act of 1940 (15U.S.C. § 80(b)‑18a), which may include different requirements for thoseinvestment advisers who maintain custody of clients' funds or securities or whohave discretionary authority over same and those investment advisers who donot.

(e)        The Administratormay by rule require registered investment advisers who have custody of ordiscretionary authority over client funds or securities to post surety bonds inamounts up to one hundred thousand dollars ($100,000), subject to thelimitations of section 222 of the Investment Advisers Act of 1940 (15 U.S.C. §80(b)‑18a), and may determine their conditions. Any appropriate depositof cash or securities shall be accepted in lieu of any bond so required. Nobond may be required of any investment adviser whose minimum net capital, whichmay be defined by rule, exceeds one hundred thousand dollars ($100,000). Everybond shall provide for suit thereon by any person who has a cause of actionunder G.S. 78C‑38 and, if the Administrator by rule or order requires, byany person who has a cause of action not arising under this Chapter. Every bondshall provide that no suit may be maintained to enforce any liability on thebond unless brought within the time limitations of G.S. 78C‑38(d). (1987 (Reg. Sess., 1988), c.1098, s. 1; 1997‑419, s. 17; 2001‑273, s. 3; 2002‑126, s.29A.35; 2002‑189, ss. 2, 3; 2003‑413, s. 19.)