De Minimis Exemption
No place of business in the state and fewer than 6 clients there in 12 months.
What is De Minimis Exemption?
Federal law (NSMIA) bars a state from requiring an adviser to register if the adviser has no place of business in the state and has had fewer than six clients resident there during the preceding 12 months. Five or fewer is fine; a sixth triggers registration. Having any place of business in the state removes the exemption regardless of client count.
De Minimis Exemption: a worked example
An adviser with five clients in a neighboring state and no office there need not register there; taking a sixth client means it must.
More terms in Uniform Securities Act & Registration
Uniform Securities Act (USA)
The model state securities law most states' 'blue sky' statutes are based on.
State Securities Administrator
The official or agency that enforces a state's securities act.
Person (USA Definition)
Anyone who can be held legally responsible - individuals and organizations.
Investment Adviser (USA Definition)
Advises on securities, as a business, for compensation.
Excluded from the Investment Adviser Definition
Banks, incidental professionals, broker-dealers, and publishers are not advisers at all.
Exemptions from State Adviser Registration
An adviser with no office in the state and only institutional or very few clients there.
Federal Covered Adviser
An adviser registered with the SEC rather than the states.
Exempt Reporting Adviser
A private fund adviser exempt from SEC registration but still filing reports.
All Uniform Securities Act & Registration terms · Full glossary