Safe Harbor Rule 3a-4: Investment Advisory Programs

One of the key differences between an investment company and a registered investment advisor (RIA) is that advisers are in the business of providing investment advice to others, while an investment company is primarily engaged in the business of investing in securities themselves. Although advisors invest in securities on behalf clients, they do it on an individualized basis unlike investment companies that invest on behalf of clients on a collective basis. If any of a firm’s investment advisory programs are determined to be an investment company then Read More…

Safe Harbor Expansion


NASD Rule 1017 is FINRA’s rule related to events which trigger a broker-dealer’s requirement to file a continuance in membership application (“CMA”).  As background, events that require a broker-dealer registered with FINRA to file a CMA are as follows:

  • a merger with another member firm;
  • a direct or indirect acquisition of another member;
  • direct or indirect acquisitions or transfers of 25 percent or more in the aggregate of the firm’s assets, or any asset, business or line of operation that generates revenues comprising 25 percent or more in the aggregate of the firm’s earnings measured on a rolling 36-month basis;
  • a change in the equity ownership or partnership capital of the firm that results in one person or entity directly or indirectly owning or controlling 25 percent or more of the Read More…