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Form ADV Part 1A Item 2A(12) · Answer type: yn · Item 2 - SEC Registration
Item 2A(12) asks whether the firm has received an SEC order exempting it from the prohibition against registration with the SEC.
This registration path applies to firms that would normally be prohibited from SEC registration but have obtained a specific SEC order allowing that registration. The SEC can grant exemptive orders when a firm's situation does not fit standard registration categories but SEC oversight serves the public interest.
These orders are uncommon and typically result from unique business models, regulatory gaps, or special circumstances. The firm must petition the SEC for relief from normal registration restrictions and demonstrate why SEC registration is appropriate despite the prohibition.
Common situations might include firms with AUM below standard thresholds but with activities that benefit from federal oversight, or firms with complex structures that create conflicts with state registration requirements.
Do not confuse 2A(12) with standard registration paths like large adviser status in Item 2A(1) or routine SEC rule exemptions. This checkbox requires a specific, individualized SEC order directed to the firm.
Yes
The firm marks this box when it has an SEC exemptive order that allows SEC registration under Item 2A(12) - a special registration path, not a routine size-threshold claim.
No
The firm does not claim this specialized registration basis - it qualifies under standard Item 2A thresholds or other normal registration paths.
2A(12) - Have received an SEC order exempting you from the prohibition against registration with the SEC (Yes / No).
This appears in Item 2, SEC Registration, which explains the firm's basis for SEC registration eligibility.
An SEC exemptive order signals a unique regulatory situation that required individual SEC attention. This might reflect innovative business models, complex ownership structures, or specialized activities that do not fit standard registration categories.
Firms with exemptive orders often operate in niche areas or emerging sectors where existing rules create gaps. The SEC order represents a regulatory solution tailored to the firm's specific circumstances.
However, the order does not indicate superior regulatory standing or preferential treatment. It simply means the firm's situation required individual review rather than standard processing.
The answer also does not reveal the specific order details, effective dates, or conditions. SEC exemptive orders often include specific requirements or limitations that do not appear in Form ADV.
Use 2A(12) as a signal to review the firm's business model and regulatory history more carefully. The unique registration path may indicate complexity that requires additional due diligence.
Yes
The firm reports having an SEC exemptive order under Item 2A(12). On Best Investors, review other Item 2A boxes to see whether the firm also qualifies under standard registration paths. Some firms have both exemptive orders and normal qualification thresholds.
Check services in Item 5G and other business activities in Item 6A to understand what unique aspects of the firm's business might have required the exemptive order.
Review regulatory AUM in Item 5F(2)(c) to see whether the firm meets standard size thresholds. Firms with exemptive orders may have AUM below normal SEC registration minimums.
For detailed order terms, look for SEC releases or exemptive order documents that may be publicly available through SEC databases.
No
The firm does not claim exemptive order status on this line. Check other Item 2A boxes for the actual registration basis. Most SEC-registered advisers qualify under standard paths like large adviser thresholds or investment company adviser status.