Investment Adviser Post-Registration Requirements

Minimum net worth – Hawaii investment advisers (HAR §16-39-433)
Investment advisers with a place of business in Hawaii must, at all times, maintain a minimum net worth in the amounts shown.  If the investment adviser’s net worth drops below the minimum amounts shown below, the investment advisers must notify the commissioner by the close of business on the next business day.

No custody or discretionary authority = $5,000
Direct fee deduction = $5,000
Advisers to pooled investment vehicles = $5,000
Discretionary authority, no custody = $10,000
Full custody = $35,000

Minimum net worth – Out-of-state investment advisers (HAR §16-39-433)
Investment advisers with a place of business in another state are not required to comply with Hawaii’s minimum net worth requirement as long as the applicant is registered in the state where it maintains its principal place of business and is in compliance with that state’s net capital or net worth requirements, if any.

Disclosure statements (HAR §16-39-439)
Investment advisers must furnish each advisory client and prospective client with a written disclosure statement that complies with the provisions of the Investment Advisers Act, 17 CFR §275.204-3.

Privacy Policy
Under the Gramm-Leach-Bliley Act (GLBA), investment advisers are required to adopt written policies for handling confidential personal information and the proper distribution of those written policies.  More information regarding GLBA can be found in NASAA’s Privacy Policy for State Advisers.

Material changes (HAR §16-39-440)
Investment advisers must promptly notify the commissioner of any material change in any information, exhibits, or schedules submitted, or circumstances disclosed in its last Form ADV by filing a correcting amendment via the IARD.

Books and records (HAR §16-39-442)
Investment advisers must make and keep true, accurate, and current books and records in compliance with the Investment Advisers Act, 17 CFR §275.204-2.  In addition, investment advisers who have custody of client funds or securities shall keep all records and evidence of compliance required under HAR §16-39-436.

Before ceasing to conduct or discontinuing business as an investment adviser, the adviser must arrange for and be responsible for the maintenance and preservation of the books and records for the full remainder of the period required under 17 CFR §275.204-2, and shall notify the commissioner in writing of the exact address where the books and records will be maintained during such period.

Expiration, renewal or termination of registration (HAR §16-39-441)
All registrations automatically expire on December 31 of each year, unless terminated sooner.  All registrants are responsible for renewing the firm and its investment adviser representatives via the IARD.  If a renewal is not completed by December 31, the registration will expire, all activities of the adviser must cease, and a new application for registration must be submitted.

A registration may be terminated prior to December 31 by filing an ADV-W via the IARD.  Termination of the investment adviser’s registration for any reason shall automatically terminate the registration of each registered investment adviser representative of the investment adviser.