South Carolina Hedge Fund Law – Investment Advisor Registration and Form D Filings

Below we have provided two separate sources from the South Carolina Securities Division Website.  First, we have reproduced a very short blurb from their website which explains that investment advisors who have a place of business in South Carolina must generally be registered as an investment advisor.  Second, we have reproduced their schedule and instructions for the state blue sky filings which need to be made by the hedge fund manager after the first sale of securities in the state.  In general hedge fund interests are sold in accordance with a Regulation D 506 hedge fund offering.  States generally have the authority to require Form D filings when a sale under 506 is made to residents of the state.  In South Carolina the requirement is to make the Form D filing within 15 days of the first sale in South Carolina.  The hedge fund manager will also need to send in a check for $300. 

Please contact us if you have any questions on South Carolina investment advisor registration or if you would like to start a hedge fund in South Carolina.  Other helpful hedge fund law articles include:

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Registration of Investment Advisors

Investment advisers, financial planners and their representatives doing business in South Carolina must register with the Securities Division, except as exempted by the National Securities Market Improvement Act of 1996.

The term “investment adviser” includes financial planners and firms or individuals that advertise, hold themselves out as or otherwise act as investment advisers or financial planners. To find out if an investment adviser or financial planner is registered in South Carolina or is the subject of reportable complaints, contact the Securities Division at 803-734-9916.

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The following release can be found here.

REG D 504, 505, & 506 FILINGS

For all Reg D 504, 505, and 506 filings, submit the following:

(1) Form D manually signed on the state and federal signature pages
(2) Appendix pages
(3) Form U-2 (hyperlink: http://www.nasaa.org/content/Files/FormU%2D2.doc)
(4) $300 filing fee made payable to the South Carolina Office of the Attorney General
(5) A statement in a cover letter as to how the offering will be sold, i.e., by the issuer, or by a
broker/dealer, etc.
(6) A duplicate cover letter with a stamped, return address envelope for acknowledgement of
receipt and proof of clearance date.

For REG D 504 filings submit items 1-6 above plus the following:

(1) One copy of the Private Placement Memorandum or offering document(s)
(2) A letter indicating that the conditions of South Carolina Code of Regulations 13-204(H),
indicated below, have been met.
(a) The aggregate offering price for securities sold in South Carolina shall not exceed
two hundred fifty thousand ($250,000.00) dollars during any twelve (12) month
period;
(b) The limitation on the manner of offering and resale of securities set forth in Rules
502(c) and (d) of SEC Regulation D shall be satisfied; and
(c) The “sophisticated investor” qualifications for the nature of purchasers set forth in
Rule 506(b)(2)(ii) of SEC Regulation D shall be satisfied.
(3) File all required documents and exhibits at least 5 business days before the first offer in
this State.

For REG D 505 filings submit items 1-6 above plus the following:

(1) One copy of the Private Placement Memorandum
(2) File all required documents and exhibits at least 5 business days before the first offer in
this State.

For REG D 506 filings submit items 1-6 above within 15 days of the first sale in this State.

1 thought on “South Carolina Hedge Fund Law – Investment Advisor Registration and Form D Filings

  1. Pingback: New Jersey Hedge Fund Law – Investment Advisor Registration Exemption | Hedge Fund Law Blog

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