Investment adviser bond cost
The Alabama Securities Commission requires broker dealers and investment advisers to post $50,000 surety bonds.
These bonds are subject to underwriting, which means that the cost an applicant pays is based on a review of his or her personal credit report. Some surety underwriting companies might require current business financials and a personal financial statement to underwrite this bond. Having these documents handy will expedite the bonding process and could even help you qualify for a lower bond premium rate.
Why this bond
By posting an investment adviser or broker dealer bond in Alabama, principals (investment advisers or broker dealers) pledge to perform faithful and honest business in full compliance with the Code of Alabama, 1975, Section 8-6-3. The main purpose of this bond is to offer indemnity to any person who suffers a loss as a result of the principal’s unethical and unlawful business practices. Under this bond, dealers and advisers are required to maintain all records for a minimum of 3 years and to refrain from fraudulent business practices.
If a principal violates any of the terms of the bond agreement and a valid claim is brought against the bond, the surety will cover all damages up to the total bond amount. The principal, in turn, must reimburse the surety for all damages paid out.
Investment Adviser Bond details
Our experts have been instructed to write Alabama investment adviser bonds on the state’s generic surety bond form. We have this form on file so that we can help you get the bond you need quickly and accurately.
Become an investment adviser / broker-dealer
All applicants to become a registered investment adviser or broker dealer in Alabama must file an application with the Securities Commission. A $50,000 surety bond, a statement containing the adviser’s current net capital and the adviser’s balance sheet must accompany the completed application.
Dealers must maintain a net capital of at least $50,000, and advisers must maintain a net capital of at least $10,000.Registrations will expire annually on December 31 unless renewed prior to the expiration date.
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- Alabama Securities Commission
- Application Requirements for Investment Advisers
- Alabama Securities Commission Statutes: Regulations & Commission Policies
- Chapter 830-X-3 Registration of Dealers, Agents, Investment Advisors and Investment Adviser Representatives
- Chapter 830-X-1 Organization and General Operation