In March 2016, the State of Wyoming joined the ranks of other states by implementing the Wyoming Uniform Securities Act.
For years, Wyoming has been a sanctuary for registered investment advisors that sought registration with the U.S. Securities and Exchange Commission ("SEC"), but did not have the requisite $100 million in assets under management ("AUM").
In other states [excluding NY], an Advisor with less than $100 million in AUM was required to register with the state securities division of their home state and other states in which the advisor had a place of business or clients exceeding a de minimis level. As Wyoming did not have formalized securities regulations, those advisors became the jurisdiction of the SEC.
With the implementation of Wyoming’s Uniform Securities Act, Wyoming will require registered investment advisors to register with Wyoming state securities division if they have less than $100 million in AUM. The new legislation will take effect on July 1, 2017..
The SEC has begun contacting firms that may be affected by this change. If you are in need of assistance in updating your registration or transitioning from SEC to state registration, please contact us at firstname.lastname@example.org.
Sample [redacted] notice from the SEC:
From: IARDLIVE [mailto:IARDLIVE@SEC.GOV]
Sent: 09 February 2017 22:01
Subject: [Advisor - CRD######]
We are contacting you about your status as an SEC registered investment adviser with a principal office or place of business in Wyoming. As you may know, investment advisers with a principal office and place of business in Wyoming have been required to register with the SEC because the State of Wyoming has not previously regulated investment advisers. Advisers indicate this basis for SEC registration by checking the box for Item 2.A.(3) in Form ADV.
The State of Wyoming has recently adopted legislation to begin regulating investment advisers on July 1, 2017. See Wyoming Uniform Securities Act. After that date, SEC registered investment advisers will no longer be eligible for SEC registration solely on the basis of having a principal office and place of business in Wyoming. If you are an adviser with regulatory assets under management of over $100 million or you have another basis requiring you to remain registered with the SEC after the Wyoming legislation goes into effect on July 1, 2017, we encourage you to select the checkbox on Item 2 in Form ADV indicating that other basis for SEC registration as early as possible and uncheck the Item 2.A.(3) box. Additionally, if you are required to remain registered with the SEC after July 1, 2017, you should consider whether you will also be required to include Wyoming as a state in which you must provide a notice filing in Item 2.C.
If you are an adviser that does not have another basis requiring you to remain registered with the SEC after July 1, 2017, you may be required to become registered with the State of Wyoming or other states in which you conduct business. State regulator contact information may be found at the Contact Your Regulator - NASAA webpage. You may apply for state registration by filing a new Form ADV through the IARD system (select the "Apply for registration as an investment adviser with one or more States" option) and file a partial ADV-W withdrawing from SEC registration after your state registration has been approved. Advisers that are no longer eligible for SEC registration after the Wyoming state legislation goes into effect on July 1, 2017 and who have not applied for state registration may be subject to having their SEC registration cancelled.
You may reply to this email if you have questions or contact us at 202-551-6999.
INVESTMENT ADVISER REGULATION OFFICE
Division of Investment Management
U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549-8549
P: (202) 551-6999