New RIA registrations: how to track newly registered investment advisers

A newly registered investment adviser has a compliance program to build, a custodian to select, books and records to archive, cyber controls to document, and E&O insurance to place. The registration is public within a day or two of approval, and it is the single best trigger for the firms that sell those things.

SEC or state

Advisers with $100 million or more in regulatory assets under management (RAUM) register with the SEC; advisers below that generally register with their state. Advisers between $25 million and $100 million may register with the SEC in limited circumstances (for example when the home state does not examine advisers). Pension consultants and advisers to registered funds register with the SEC regardless of size.

The 120-day rule

An adviser that expects to reach $100 million within 120 days of registration may register with the SEC immediately on that basis. These approvals are marked as such in the public record. A 120-day registrant is usually a breakaway team or a newly formed firm with committed assets, and it has almost nothing in place: it needs a compliance manual, a custodian relationship, a CRM, an archiving vendor and an insurance broker in its first quarter.

Exempt reporting advisers

Venture capital advisers and private fund advisers with under $150 million in US private fund assets file a reduced Form ADV as exempt reporting advisers (ERAs). They are not registered but they are public, and they are the pipeline for the next generation of SEC registrants. An ERA that advises private funds needs a fund administrator and an auditor even though it has no compliance obligation of its own.

Where registrations appear

Form ADV is filed on IARD, not EDGAR. The public view is the Investment Adviser Public Disclosure site (IAPD), and the SEC publishes daily compilation feeds of every SEC-registered, exempt and state-registered firm. The SEC's monthly bulk file lags by a month and does not include state registrants. FormDSignal reads the daily feeds, snapshots every firm, and raises a lead when a registration becomes effective: SEC approval, 120-day approval, ERA activation or state approval.

What the record tells you

• Firm name, CRD number, SEC file number, main office address and phone, website.
• Regulatory AUM, number of accounts, employees and advisory employees.
• Whether the firm advises private funds, has custody, charges performance fees, or is affiliated with a broker-dealer (a classic breakaway marker).
• Notice filings by state, which show where clients are.
• Disciplinary disclosures.

The chief compliance officer's name and email (Item 1J) are withheld from the public record.

Where to look

• New investment advisers, with kind, state, RAUM and score filters.
• By state, for example California, Texas, Florida and New York.