Fintech Portfolio Licensing Requirements

Summary

Offering a portfolio of sectoral ETFs in the US market may require registration as an investment adviser under the Investment Advisers Act of 1940. Check with the Connecticut Department of Banking for state-specific requirements. When publishing past performance, ensure compliance with SEC Advertising Rules (Rule 206(4)-1) by including disclaimers that past performance does not guarantee future results and disclosing all material conditions, objectives, or strategies. Consider consulting a securities attorney for detailed guidance on compliance and registration processes.

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yes please explain me in details these points add the specic laws and exlpain to me

Sure, here are some specific points and laws related to your questions:
*. Licensing:
- Investment Advisers Act of *: This federal law governs the registration of investment advisers with the SEC. According to this act, if you are providing advice about securities for compensation, you might need to register as an investment adviser.
- State Regulations: Each state has its own securities laws (often referred to as "Blue Sky Laws") which may also require registration or licensing. Check with the Connecticut Department of Banking for specific state requirements.
*. Publishing Performance:
- SEC Advertising Rules (Rule *(*)-* under the Investment Advisers Act): When publishing past performance, you must ensure that the information is not misleading. This includes:
- Clearly stating that past performance does not guarantee future results.
- Disclosing any material conditions, objectives, or investment strategies used in the model.
- Providing a fair and balanced presentation of the performance, including any relevant disclaimers.
Would you like more details on either the SEC registration process or specific SEC advertising rules?

yes and in my casee that i explained me before if i will need a licens even that i dont trascts any money, and only give invest portfolio The composition of an investment portfolio consisting of ETFs changes every month based on a quantitative model.

To clarify, even if you don't transact any money and only provide investment portfolios, you may still need to register as an investment adviser. Here are some specific points:
- Investment Advisers Act of *: Requires registration if providing advice about securities for compensation.
- SEC Advertising Rules: Ensure your performance data is not misleading and includes proper disclaimers.
Would you like more details on the registration process or specific advertising rules?

yes and there are cases that you provide investment portfolio and no need to register as an investment adviser.

It seems like you have a complex situation that might require professional legal advice. Here is some general information:
*. Licensing:
- Investment Advisers Act of *: If you provide advice about securities for compensation, you generally need to register as an investment adviser with the SEC or your state.
- State Regulations: Each state has its own requirements. Check with the Connecticut Department of Banking for specifics.
*. Publishing Performance:
- SEC Advertising Rules (Rule *(*)-*): Ensure your past performance data is not misleading and includes appropriate disclaimers.
Would you like more details on the SEC registration process or a specific example of proper performance disclosure?

yes

Sure, here are more details:
*. SEC Registration Process:
- Form ADV: Complete and submit this form to register with the SEC. It consists of two parts: Part * (requires information about your business and ownership) and Part * (requires a narrative brochure explaining your services, fees, and business practices).
- Filing Fees: Pay the required filing fees.
- Compliance: Ensure ongoing compliance with SEC regulations, including maintaining records and filing annual updates.
*. Specific SEC Advertising Rules:
- Rule *(*)-*: When advertising past performance, ensure it is not misleading by:
- Clearly stating that past performance does not guarantee future results.
- Disclosing all material conditions, objectives, or investment strategies used in the model.
- Providing a balanced presentation, including both gains and losses.
- Including all relevant disclaimers and disclosures.
Would you like more information on how to complete Form ADV or details about ongoing compliance requirements?

yes

Sure, here are more details:
*. Completing Form ADV:
- Part *: Provide general information about your business, ownership, clients, employees, business practices, affiliations, and any disciplinary events.
- Part *: Create a narrative brochure detailing your services, fees, business practices, conflicts of interest, and background of advisory personnel.
*. Ongoing Compliance Requirements:
- Annual Updating Amendment: Update Form ADV annually within 90 days of your fiscal year-end.
- Books and Records: Maintain accurate and current books and records as required by the SEC.
- Codes of Ethics: Adopt and enforce written codes of ethics for your advisory personnel.
- Compliance Program: Implement and periodically review a written compliance program.
Would you like more information on how to draft the narrative brochure for Part *?

are there. specipec License requirements and things you need to know in order to meet the requirements?

Yes, here are some specific points for Connecticut:

Licensing Requirements:
- Investment Advisers Act of *: Federal law requiring registration with the SEC if providing advice about securities for compensation.
- Connecticut Uniform Securities Act: Requires investment advisers to register with the Connecticut Department of Banking.

Key Compliance Points:
- Form ADV: Must be completed and submitted. It includes:
- Part *: General information about your business.
- Part *: Narrative brochure detailing services, fees, and business practices.
- SEC Advertising Rules (Rule *(*)-*):
- Clearly state that past performance does not guarantee future results.
- Disclose all material conditions, objectives, or investment strategies.
- Present a balanced view of performance.
Would you like more details on how to draft the narrative brochure for Part *?

is there something else that i need to consider? just to make sure the costmer write is portfolio risk trow few questions, than he get The portfolio changes once a month in accordance with the publication of macroeconomic data in public publications. the costmer pay me a monthly payment and i dont any money transaction

You might need to consider the following points to ensure compliance:
- Disclosure Obligations: Clearly disclose the nature of your service, the methodology for portfolio changes, and the associated risks.
- Client Agreement: Have a written agreement outlining the terms of service, fees, and disclaimers.
- Compliance Monitoring: Regularly review your practices to ensure ongoing compliance with both SEC and state regulations.
Would you like more information on drafting a client agreement or disclosure?

yes

Sure! Here are some key points:
*. Disclosure Obligations:
- Clearly explain the nature of your service.
- Detail the methodology for portfolio changes.
- Include any associated risks.
*. Client Agreement:
- Outline the terms of service.
- Specify fees and any disclaimers.
*. Compliance Monitoring:
- Regularly review practices to ensure compliance with SEC and state regulations.

Would you like more details on drafting the client agreement or specific disclosure examples?

yes

Sure! Here are more detailed points:

Client Agreement:
- Terms of Service: Clearly outline the services provided, duration, and termination conditions.
- Fees: Specify the fee structure, billing cycle, and payment terms.
- Disclaimers: Include disclaimers about the limitations of the service, risk involved, and that past performance does not guarantee future results.

Disclosure Examples:
- Service Nature: "Our service provides a monthly updated portfolio of ETFs based on macroeconomic data."
- Methodology: "The portfolio is adjusted monthly according to publicly available macroeconomic data."
- Risks: "Investing in ETFs involves risk, including the possible loss of principal."
Would you like more information on creating compliance monitoring procedures?

yes

Sure! Here are some important points for creating compliance monitoring procedures:
*. Regular Reviews:
- Schedule periodic reviews of your business practices and documentation to ensure compliance with SEC and state regulations.
*. Record-Keeping:
- Maintain accurate and up-to-date records of client communications, transactions, and advisory activities.
*. Audit Trails:
- Implement systems to track changes in portfolios and document the rationale behind these changes.
*. Internal Audits:
- Conduct internal audits to assess compliance with regulatory requirements and identify any potential issues.
*. Training:
- Provide ongoing training for staff on compliance requirements and best practices.
Would you like more information on any of these procedures or need further assistance with your compliance plan?

I have a project in the field of fintech, and the venture offers the customer a portfolio of stocks consisting of sectoral ETFs in the US market. The portfolio changes once a month in accordance with the publication of macroeconomic data in public publications. The product is intended for the American market I have a few questions please: Do I need any license to sell the car in the bag? In our understanding, this is neither management nor investment advice, since the product does not take into account the needs of the client, it is uniform for all clients. Is there a restriction on publishing the model's performance to the general public (past performance)?

Here are some specific points and laws related to your questions:
*. Licensing:
- Investment Advisers Act of *: You might need to register as an investment adviser if providing advice about securities for compensation.
- Connecticut Uniform Securities Act: Check with the Connecticut Department of Banking for state-specific requirements.
*. Publishing Performance:
- SEC Advertising Rules (Rule *(*)-*): Ensure past performance is not misleading. Include disclaimers that past performance does not guarantee future results and disclose all material conditions, objectives, or strategies.
Would you like more details on the SEC registration process or specific advertising rules?

To address your questions:
*. Licensing:
- Investment Advisers Act of *: You might need to register as an investment adviser if providing advice about securities for compensation.
- Connecticut Uniform Securities Act: Check with the Connecticut Department of Banking for state-specific requirements.
*. Publishing Performance:
- SEC Advertising Rules (Rule *(*)-*): Ensure past performance is not misleading. Include disclaimers that past performance does not guarantee future results and disclose all material conditions, objectives, or strategies.
Would you like more details on the SEC registration process or specific advertising rules?

Fintech Portfolio Licensing Requirements

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