Branch Offices
In Wisconsin, a branch office of an investment adviser or federal covered adviser is a location other than the home office of the adviser that is held out to the public by any means as a place where advisory business is conducted. Rules adopted by the U.S. Securities and Exchange Commission (SEC) provide a definition of "place of business" as follows:
An office at which the investment adviser regularly provides investment advisory services, solicits, meets with, or otherwise communicates with clients; or Any other location that is held out to the general public as a location at which the investment adviser provides investment advisory services, solicits, meets with, or otherwise communicates with clients.
Wis. Admin. Code s. DFI-Sec 1.02(7)(b), defines "branch office" in much the same manner as set forth in the SEC rule. If you hold out a particular location as a business location of the adviser, whether by business cards, stationery, yellow page listing, or formal media advertisement, you have met the first test of whether a location must be considered a branch office.
The definition provides that any location that is held out to the public and where business is conducted meets the definition of a "place of business." This could mean that if you send clients a letter requesting they meet with you in a hotel room, that location is a place of business. The same would be true for locations where you advertise a seminar to solicit new customers. However, the Division of Securities applies a standard of "regular" use of a location to conduct business before it would require such locations to be registered as branch offices. If you always use the same hotel or restaurant to solicit or conduct business, then that location would be required to be filed as a branch office. Conversely, if you meet a customer in their home or use a different meeting room elsewhere each time, those would not be required to be filed as branch offices.
The next test is the conduct of business. Like the SEC, the division does include any activity of an adviser to trigger the conduct of business provision of the branch office definition. If you regularly invite people to a location to discuss becoming a client; to discuss recommendations, plans, or portfolio performance; if you send letters with stationery using an address other than the home office; if you provide a telephone number (other than a cell phone number) at a location other than the home office where clients or prospective clients can contact you and discuss their accounts or your advisory services, the activities at those locations will trigger the conduct of business portion of the branch office definition.
If any location other than the home office location of the adviser meets the definition of branch office, you must file a notice with the division designating that office location as a branch office. The initial opening, any changes and the closing must be filed with the division within 14 days of the event.
State-registered investment advisers make their branch office filings via the Central Registration Depository (CRD) using Form BR. In Section 2 of Form BR, when checking the Type of Branch Office Registration, the broker-dealer box should only be checked if the investment adviser is also a broker-dealer. This question refers to the type of branch office filing the investment adviser is making for itself. If there is an affiliated entity that provides broker-dealer services at the same location, but the investment adviser is not itself the broker-dealer, the investment adviser should not check the broker-dealer box.
In Section 3, the first item states: "Indicate the types of financial industry activities conducted by the applicant at this branch." Again, this only refers to the investment adviser and NOT any affiliated or third party advisers or broker-dealers. Only if the investment adviser itself acts as a broker-dealer conducting the other types of services should those boxes be checked.
The next item asks about any other investment related services provided at the location. This is where a investment adviser that is not itself a broker-dealer would disclose any brokerage services provided by any of its employees representing another entity.
The third item in this section asks if personnel at this office will use any names other than the Doing Business As names the investment adviser has disclosed in Form ADV Part 1A Section 1B. This is where the affiliated or third party investment adviser or broker-dealer noted in the item above would be identified. NOTE: even though the investment adviser may have identified the affiliate in its Form ADV, this does not affect the requirement to disclose the affiliate in this Form BR item. Affiliates are not "other names" for purposes of this item.
Federal Adviser Branch Offices
Federal covered advisers must also make a notice filing regarding branch offices. However, federal covered advisers do not have access to the Form BR functionality on CRD, so branch office filings must be made directly with the division. A web-based application called Branch Office Online (BOO) is available on the DFI website. BOO lets federal covered advisers make all branch office filings electronically and pay the related fees via credit card or e-check. Links to BOO and tutorials on using BOO appear below. If the federal covered adviser cannot pay via credit card or e-check, a paper filing including the branch office address and opening or closing date must be sent directly to the division. Checks may be made payable to "DFI Division of Securities" for all openings and late fees.
Late Fees and Renewals
If an opening, change of address, or closing for a branch office is not filed within the 14 day time period prescribed, there will be a delinquent filing fee of $100.00. See Wis. Admin. Code s. DFI-Sec 7.01(6)(d).
For state-registered investment advisers, the renewal of branch offices is accomplished at the same time as the firm's renewal application. Federal covered advisers must renew branch offices prior to December 1st. The renewal fee is $80 for each branch office. See Renewals section and Wis. Admin. Code s. DFI-Sec 5.04(6).
Federal Adviser Branch Office Filing
Branch Office Online Application
Contact Us
Phone: (608) 266-2139
Email: DFISecurities@dfi.wisconsin.gov