Commonly Used Words
Like many areas of professional regulation, the investment adviser and investment adviser representative fields utilize a number of words and expressions that denote a specific meaning. Following are examples of some that are used with regular frequency.
- Brochure — The name often used when referring to Part 2 of Form ADV. The brochure, which investment advisers are required to provide to consumers, provides information concerning the fees charged by the adviser, the background of the adviser and its employees (investment adviser representatives), its business practices, and any conflicts of interest that may exist between the adviser and you as a customer.
- CRD — The Internet-based registration and licensing system for securities firms also used by state and federal regulators. The CRD system is a joint effort of the Financial Industry Regulatory Authority (FINRA), North American Securities Administrators Association (which includes the Illinois Securities Department as a member), and the federal Securities and Exchange Commission (SEC). The CRD system currently contains information on nearly 7,000 securities firms and more than 600,000 licensed individuals.
- Disclosure — The reported disclosure of customer disputes, disciplinary and regulatory actions, as well as any criminal or civil actions. For an investment adviser firm, these items must be disclosed on Form ADV. For individual investment adviser representatives, these items are reported on Form U4.
- FINRA — The Financial Industry Regulatory Authority (FINRA) is the largest independent regulator for all securities firms doing business in the United States. FINRA is dedicated to investor protection and market integrity. FINRA oversees nearly 4,700 brokerage firms, about 167,000 branch offices and approximately 635,000 registered securities representatives.
- Form ADV — The application form used by investment advisers to apply for registration as either a state- or federal-covered investment adviser. This form discloses information concerning the adviser’s ownership, states in which it is registered, the amount of assets under management, disciplinary information, and other detailed information for each investment adviser.
- Form U4 — The universal form used within the securities industry for the registration of investment adviser representatives by the employing firm with either federal or state regulators. This form provides information concerning an individual’s employment history, securities examinations the representative has passed, licensing or registration status within states, and disciplinary history.
- IARD — The Internet-based registration system for investment advisers and companion system to the CRD system. The Investment Adviser Registration Depository (IARD) is a joint effort of the Financial Industry Regulatory Authority (FINRA), North American Securities Administrators Association (which includes the Illinois Securities Department as a member), and the federal Securities and Exchange Commission.
- Illinois Securities Law of 1953 — The state law that governs the regulation of investment adviser firms and individual investment adviser representatives within the State of Illinois.
- SEC — The U.S. Securities and Exchange Commission, the federal agency that has regulatory oversight for investment advisers with $25 million or more in assets under management.
- Certified Financial Planner Board of Standards
- Financial Planning Association
- Investment Adviser Registration Depository (IARD)
- Investor Protection Trust
- North American Securities Administrators Association (NASAA)
- Securities and Exchange Commission (SEC)
The Secretary of State, Illinois Securities Department or their information providers shall not be liable regardless of the cause or duration, for any errors, inaccuracies, omissions or untimeliness of the information, or for any delay or interruption in the transmission thereof to the user, or for any claims or losses arising therefrom.