N.J. Admin. Code § 13:47A-2.2 - Capital requirements

(a) Subject to the limitations of Section 222 of the Investment Advisers Act of 1940 ( 15 U.S.C. § 80b- 18a), no registration as an investment adviser shall be granted to a person who has custody of clients' funds or securities unless the applicant has a minimum capital of $ 35,000 or has posted a surety bond in the amount of $ 35,000, except that investment advisers having custody solely due to:

1. A direct fee deduction who are complying with the terms described under Rule 206(4)-2 ( 17 CFR 275.206(4)-2) and N.J.A.C. 13:47A-6.3(a)56 ii(3) and related books and records requirements, as described in N.J.A.C. 13:47A-2.6, shall not be required to comply with the net worth or bonding requirements set forth in this section or N.J.A.C. 13:47A-2.3; or

2. Advising pooled investment vehicles who are complying with the terms described under Rule 206(4)-2(a)5 or 206(4)-2(b)4 ( 17 CFR 275.206(4)-2(a)(5) or 275.206(4)-2(b)(4)) and N.J.A.C. 13:47A-6.3(a)56 ii(2) or (4) and related books and records requirements, as described in N.J.A.C. 13:47A-2.6, shall not be required to comply with the net worth or bonding requirements set forth in this section or N.J.A.C. 13:47A-2.3.

(b) An investment adviser, as defined under N.J.S.A. 49:3-49(g), who has discretionary authority over client funds or securities, but does not have custody of client funds or securities shall maintain at all times a minimum net worth of $ 10,000.

(c) An investment adviser registered, as defined under N.J.S.A. 49:3-49(g), who accepts prepayment of advisory fees of more than $ 500.00 per client and six or more months in advance shall maintain at all times a positive net worth.

Notes

N.J. Admin. Code § 13:47A-2.2

Amended by 47 N.J.R. 2155(a), effective 8/17/2015