Exemption From Florida Investment Advisory Registration

Most states do not have securities laws which provide hedge fund managers with an exemption from investment advisor registration at the state level.  However, Florida does have an exemption which many Florida based hedge fund managers rely upon in order to avoid registration with the Florida Securities Division.

Specifically, Section 517.021(13)(b) of the Florida laws provide that the term “investment adviser” does not include “any person who does not hold herself or himself out to the general public as an investment adviser and has no more than 15 clients within 12 consecutive months in this state.”  Of course the Florida hedge fund manager or prospective manager and the hedge fund attorney should discuss whether the manager’s investment advisory activities will fall within this definition. 

The discussion above is general in nature, please review our disclaimer. As always, the facts of your particular situation may be such that the general information posted above is inapplicable.  A potential hedge fund manager should always discuss the facts of their particular situation with their hedge fund attorney.  Other related hedge fund law articles include:

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The following definition can be found here.

(13)(a)  “Investment adviser” includes any person who for compensation engages for all or part of her or his time, directly or indirectly, or through publications or writings, in the business of advising others as to the value of securities or as to the advisability of investments in, purchasing of, or selling of securities, except a dealer whose performance of these services is solely incidental to the conduct of her or his business as a dealer and who receives no special compensation for such services.

(b)  The term “investment adviser” does not include the following:

1.  Any licensed practicing attorney whose performance of such services is solely incidental to the practice of her or his profession;

2.  Any licensed certified public accountant whose performance of such services is solely incidental to the practice of her or his profession;

3.  Any bank authorized to do business in this state;

4.  Any bank holding company as defined in the Bank Holding Company Act of 1956, as amended, authorized to do business in this state;

5.  Any trust company having trust powers which it is authorized to exercise in the state, which trust company renders or performs services in a fiduciary capacity incidental to the exercise of its trust powers;

6.  Any person who renders investment advice exclusively to insurance or investment companies;

7.  Any person who does not hold herself or himself out to the general public as an investment adviser and has no more than 15 clients within 12 consecutive months in this state;

8.  Any person whose transactions in this state are limited to those transactions described in s. 222(d) of the Investment Advisers Act of 1940. Those clients listed in subparagraph 6. may not be included when determining the number of clients of an investment adviser for purposes of s. 222(d) of the Investment Advisers Act of 1940; or

9.  A federal covered adviser.

1 thought on “Exemption From Florida Investment Advisory Registration

  1. Pingback: Florida Hedge Fund Law - Investment Advisor Registration Information | Hedge Fund Law Blog

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