It can apply only if the firm maintains customer information concerning fewer than 5,000 consumers, and it removes only four listed duties. Citation: 16 CFR 314.6.
Primary source: FTC Safeguards Rule business guidance
Does the under-5,000-consumer exemption apply to a state-registered investment adviser?
Details
Many state RIAs are small enough for 16 CFR 314.6, but household records, prospects, and former clients should be counted carefully. The exception does not remove the program or safeguards. The firm should document the count method, because old files, leads, former customers, and retained records can matter.
Primary source: FTC Safeguards Rule business guidance.
Related obligations - not covered by this packet: state adviser books-and-records and examination rules may require separate records retention, advertising, billing, custody, and compliance files. Policywright's WISP packet does not satisfy those securities-recordkeeping duties.
FAQ
Does the under-5,000-consumer exemption apply to a state-registered investment adviser?
It can apply only if the firm maintains customer information concerning fewer than 5,000 consumers, and it removes only four listed duties. Citation: 16 CFR 314.6.
What is the data-flow issue for a state-registered investment adviser?
Client information lives in Form ADV files, advisory agreements, suitability or planning notes, custodial account data, portfolio-management tools, email, portals, billing records, and household financial plans. The WISP should distinguish custodian systems from adviser-controlled records.
Is this legal advice?
No. It is source-cited educational content for a template product, not legal advice.