Branch Offices

Updated 3/15/2002

In Wisconsin, a branch office of an investment adviser is a location other than the home office of the adviser that is held out to the public by any means as a place where advisory business is conducted. Rules adopted by the SEC in 1997 provide a definition of "place of business" as follows:

An office at which the investment adviser regularly provides investment advisory services, solicits, meets with, or otherwise communicates with clients; or Any other location that is held out to the general public as a location at which the investment adviser provides investment advisory services, solicits, meets with, or otherwise communicates with clients.

§ DFI-Sec 1.02(7)(b), Wis. Adm. Code, defines "branch office" in much the same manner as set forth in the SEC rule. If you hold out a particular location as a business location of the adviser, whether by business cards, stationery, yellow page listing, or formal media advertisement, you have met the first test of whether a location must be considered a branch office.

The SEC provides that any location that is held out and where business is conducted is a place of business. This could mean that if you send clients a letter requesting they meet with you in a hotel room, that location is a place of business. The same would be true for locations where you advertise a seminar to solicit new customers. The Division does follow item (1) above in its branch office definition. However, the parameters of item (2) have not been applied as broadly. The Code applies the same standard of "regular" use of a location to conduct business before it would require such locations to be registered as branch offices.

The next test is the conduct of business. Like the SEC, the Division does include any activity of an adviser to trigger the conduct of business provision of the branch office definition. If you regularly invite people to a location to discuss becoming a client; to discuss recommendations, plans, or portfolio performance; if you send letters with stationery using an address other than the home office; if you provide a telephone number at a location other than the home office where clients or prospective clients can contact you and discuss their accounts or your advisory services, the activities at those locations will trigger the conduct of business portion of the branch office definition.

If any location other than the home office location of the adviser meets the definition of branch office, you must file a notice with the Division designating that office location as a branch office. The initial filing must be made within 14 days of the opening of a branch office. This filing must consist of the address of the branch office, telephone number of the branch office, name of the supervisor at the branch office, the number of representatives operating out of that branch and the effective date of its opening. This notice may utilize the Schedule D of Form ADV or may be via letter. The firm must update it's Form ADV to include the listing of the new branch on Schedule D. The notice filing fee for a branch office is $30.00 per branch. (§ DFI-Sec 5.04(5)(a) & (c), Wis. Adm. Code).

If an address of a branch office changes, the firm must file the change in writing with the Division within 14 days of the change. There is no charge for this filing. Again, Schedule D must be updated and a copy may be used as the notification to the Division. (§ DFI-Sec 5.04(5)(a) & (c), Wis. Adm. Code).

If a branch office is closed, the firm must file notice of the closing in writing with the Division within 14 days of the closing. This filing must include the effective date of the closing. Schedule D must be updated and a copy may be used as the notification to the Division. There is no charge for this filing. (§ DFI-Sec 5.04(5)(b) & (c), Wis. Adm. Code).

If a change to a branch office, whether it be an opening, change of address, or closing, is not filed within the time period prescribed, there will be a delinquent filing fee of $100.00. (§ DFI-Sec 7.01(6)(d), Wis. Adm. Code).

The renewal of branch offices is accomplished at the same time as the firm's renewal application. (See Renewal section) The renewal fee is $30.00 for each branch office. (§ DFI-Sec 5.04(6), Wis. Adm. Code).