Delaware compliance for asset managers

Registration channel and initial filing: - Delaware requires initial IA registration applications to be filed through the Investment Adviser Registration Depository (IARD). Applicants must set up IARD participation before applying in Delaware; Form ADV Part 1A/1B and schedules must be filed via IARD and searchable PDF attachments uploaded to the firm’s IARD record. "DE" must be identified in Part 1B, Item 1.

The Delaware filing fee ($300) will be deducted from the IARD account. (See AG/IPU guidance) 2) Fees, net worth and de minimis rules (state-level): - Delaware filing fees: Investment Adviser $300; Investment Adviser Representative $65.

Minimum net worth: $10,000 for advisers with discretion; $35,000 for advisers with custody. Out-of-state advisers are not required to register in Delaware until they have more than five Delaware clients (de minimis).

Original signed consent to service of process is required. (See NASAA and AG/IPU guidance)

Registration channel and initial filing: - Delaware requires initial IA registration applications to be filed through the Investment Adviser Registration Depository (IARD). Applicants must set up IARD participation before applying in Delaware; Form ADV Part 1A/1B and schedules must be filed via IARD and searchable PDF attachments uploaded to the firm’s IARD record. "DE" must be identified in Part 1B, Item 1.

The Delaware filing fee ($300) will be deducted from the IARD account. (See AG/IPU guidance) 2) Fees, net worth and de minimis rules (state-level): - Delaware filing fees: Investment Adviser $300; Investment Adviser Representative $65.

Minimum net worth: $10,000 for advisers with discretion; $35,000 for advisers with custody. Out-of-state advisers are not required to register in Delaware until they have more than five Delaware clients (de minimis).

Original signed consent to service of process is required. (See NASAA and AG/IPU guidance)

Required documentation and compliance program elements

- The IPU expects Form ADV, brochure, written supervisory procedures (WSPs) that include handling/reporting of suspected exploitation of vulnerable adults and seniors, supervisory responsibilities, business continuity and succession planning, accurate reporting procedures, safeguarding client assets and records, data privacy and cybersecurity practices, record retention/destruction, trading procedures, and complaint handling. Client agreements must disclose services, fee schedules, prepaid fee return provisions, assignment restrictions, and cannot compensate IARs based on client capital appreciation. The IPU may request additional documentation and can mark applications "deficient," "abandoned," or "denied" for failures. (See AG/IPU guidance)

Investment Adviser Representative (IAR) registration

- IARs must file Form U4 via FINRA CRD, pay $65, and meet Delaware testing or qualifying designation requirements (Rule 701/Rule 710). The IPU may require additional information about the IAR. (See AG/IPU guidance) 5) Federal-covered advisers / notice filings: - Federal-covered advisers (i.e., advisers registered with the SEC) who intend to do business in Delaware must provide notice via Form ADV filed on IARD, and the notice filing (with fee) expires at the end of the calendar year; renewals require updated IARD filings and fee. (See 6 Del. Admin. Code § 200-G-702) 6) BOI / AML considerations: - FinCEN updated BOI rules (interim final rule as of March 26, 2025) exempting entities formed in the United States (domestic reporting companies) from BOI reporting under the Corporate Transparency Act; foreign entities that register to do business in the U.S. may still have BOI reporting obligations with specific deadlines. Asset managers should monitor FinCEN guidance for any changes and consider AML/transaction monitoring obligations tied to federal requirements and banking/financial partners. (See FinCEN) 7) Practical next steps / checklist for an asset manager forming or operating in Delaware: - Set up IARD account and entitlements; prepare Form ADV Part 1A/1B and Part 2/ADV brochure as searchable PDFs; identify and register any IARs (Form U4); designate a Chief Compliance Officer and prepare WSPs covering the items listed by the IPU; prepare client agreements meeting Delaware disclosure requirements and include consent to service of process; ensure adequate net worth or custody safeguards if applicable; budget $300 firm filing fee and $65 per IAR; plan for annual notice/renewal and maintain records per retention rules. - Consult the SEC/FINRA for federal registration thresholds (AUM tests), Form PF and other federal reporting obligations (custody, recordkeeping, Form PF thresholds), and consult Delaware IPU for any state-specific supplemental requests or examinations.