Idaho has another well run securities division and their website is particularly helpful. The information below comes from their website and describes the major laws that hedge fund managers in Idaho need to be concerned about. The information is applicable to traditional securities-only hedge fund managers (with regard to investment advisor registration) and also to forex hedge fund managers. Like many states Iowa has enacted a commodity code which may apply to forex managers depending on the nature of the manager’s forex program.
As always, your hedge fund attorney will be able to discuss these issues with you when you are starting a hedge fund. Please also contact us if you would like help setting up an Idaho based hedge fund and management company. Other related hedge fund law articles include:
- Florida Hedge Funds
- Starting a Hedge Fund
- Start up Hedge Fund Managers – Recommended Articles
- Start Up Hedge Fund Timeline
- Hedge Fund Managers
- How to register as an Investment Advisor
- Important Information for Registered Investment Advisors
The following information can be found here.
Through the authority of Idaho’s Uniform Securities Act (2004) and the Idaho Commodity Code, the Securities Bureau of the Department of Finance regulates the sale of investment securities (e.g., stocks and bonds) and those individuals and entities that offer investment opportunities to the public.
Uniform Securities Act (2004)
Idaho’s Uniform Securities Act (2004) seeks to preserve and promote legitimate securities markets by assisting companies in their attempts to raise capital and prevent investment fraud. While the Act is designed to protect investors from fraud, it does not protect investors from the possibility of investment loss resulting from securities price movements, market changes or business failures. The Act requires that persons who solicit investments provide complete disclosure of all the important aspects of the investment being promoted. With this information, investors are empowered to make reasoned investment decisions.
Idaho Commodity Code
The Idaho Commodity Code is designed to reduce fraud by outlawing certain commodity investment contracts where the investor never receives delivery of the commodity. The law does not create a separate regulatory system. Rather, the statute provides an enforcement tool that relates to types of investment fraud not covered by Idaho’s Uniform Securities Act (2004).
Corporate Takeover Acts
In addition, the Securities Bureau of the Department of Finance has limited duties under Idaho’s corporate takeover Acts. In 1988, the Idaho Legislature adopted the Control Share Acquisition Act and the Business Combination Act to govern certain corporate mergers in Idaho. The first law gives shareholders more authority to decide the terms of a takeover and the second allows a corporation to limit the effects of a takeover.
Investment Adviser Firms:
1. Are investment adviser firms required to send annual financials?
Only if the firm is Idaho based and state regulated.
2. Is there a de minimus exemption from investment adviser firm registration?
Yes. If the firm has no place of business in Idaho and has had 5 or less Idaho clients during the previous 12 months it is exempt from licensing or from having to notice file.
3. When doing a notice filing through the Investment Adviser Registration Depository (IARD) system, is my firm required to send anything directly to Idaho?
4. What are Idaho’s fees to register or notice file an investment adviser firm?
State Regulated firm-$150; Federally Regulated firm-$30 paid through the IARD system.
5. How does a State Regulated firm become registered?
Please refer to the “Investment Adviser Application Checklist” at Securities Forms. Refer to #2A or #2B” depending on where your firm is based.
6. How do I add or delete agents to my firm?
Please refer to Chapter 9 of the IARD User’s Manual at www.iard.com/firm_users_man.asp
Investment Adviser Agents:
1. What examinations are required for Investment adviser agents to become licensed?
Either the Series 65 or the Series 66 and 7. For more detailed information including waivers and exemptions, please refer to the “Investment Adviser Representative Application Checklist” at Securities Forms
Note: For additional exam questions you may have, please refer to the answers given above under “Broker-Dealer Agents.”
2. How much does it cost to get licensed?
Idaho’s fee is $30. Please note there may be other costs involved that are not for our Department.