How much does an investment adviser bond cost in Utah?
The Division of Securities of the Utah Department of Commerce requires investment advisers to post surety bonds to legally work within the state. The required bond amount varies depending on the authority of the adviser over the funds. Advisers with custody of funds must post a $35,000 bond, and advisers with discretionary authority must post a $10,000 bond. Applicants should verify their required bond amount with the state prior to bonding.
The price you’ll pay for your bond is subject to underwriting and is based on a review of your qualifications. Highly qualified applicants may be approved for as little as 1% of their required bond amount.
Why do I need this bond?
Utah investment adviser bonds are put in place to ensure that principals (advisers) are authorized by the Utah Uniform Securities Act to appointment representatives to represent and assist them in rendering advice regarding securities. More importantly, the bond guarantees that advisers truly report the names and addresses of all representatives employed to the Utah Division of Securities and that advisers comply with all provisions of the Utah Uniform Securities Act while on the job.
What’s the fine print?
Utah investment adviser bonds remain in force and full effect unless previously canceled or until they expire on December 31 of the license year, which must be indicated on the bond form.
The surety can cancel the bond by giving 60 days’ written notice prior to cancellation to the Utah Division of Securities in Salt Lake City, Utah. A copy of the cancellation notice must be sent by registered mail to the adviser.
How to become an investment adviser in Utah
To become licensed as an investment adviser in Utah, applicants must complete the following steps:
- register the business entity with the Utah Division of Corporations
- apply, file forms and make payments through the Investment Adviser Registration Depository (IARD)
- complete Form ADV and specify the following:
- whether the adviser is registering with the SEC or licensing with the state
- detailed information about the proposed advisory business and clients as a form brochure
- appoint a designated official (a partner, officer, director, sole proprietor, etc.) to be licensed as an Investment Adviser Representative of the adviser
- submit a written notification to the Division that details the following:
- the designated official for the investment adviser
- whether the investment adviser will have either custody of or discretionary authority over client funds and securities
- that the adviser has met the applicable bonding requirement on Form 4-5BIA
The review process could take as long as 30 days once all documentation is submitted. The division will notify the applicant upon approval of the license.