· Web viewAmong other things, firms should ensure that the Solicitor Agreement they use complies with applicable laws, including any state laws that may differ from the federal

IMPORTANT NOTE

Greenwich Advisor Compliance Services Corp. (“Greenwich Compliance”) is providing this template investment advisor Solicitor Agreement as a courtesy to investment advisors trading through the Interactive Brokers (“IB”) platform. This template is designed to focus on the general requirements by investment advisors registered with the Securities and Exchange Commission (“SEC”). Many, but not all, states have the same or similar requirements.

Advisors planning to use this template to draft their own Solicitor Agreement should review it carefully and consult with appropriate counsel to ensure that the document is appropriately customized. Among other things, firms should ensure that the Solicitor Agreement they use complies with applicable laws, including any state laws that may differ from the federal statutes and SEC rules that form the basis of this template. If you are a state-registered advisor, you should research the rules in your particular state.

This template should not be construed as legal advice and has not been tailored to address the particular circumstances of any specific registered investment advisor.

Please also note that this template was written for arrangements between advisors and solicitors that are both organizations/companies. If either the advisor or solicitor is an individual, you should change the pronouns used accordingly.

TEMPLATE DOCUMENT—CUSTOMIZE BEFORE USING

SAMPLE SOLICITOR AGREEMENT

This Solicitor Agreement (“the Agreement”) is entered into by and between [name of Solicitor] (“Solicitor”) and [name of Registered Investment Advisor] (“Advisor”), an investment advisor registered with the United States Securities and Exchange Commission (“SEC”) under the Investment Advisers Act of 1940 (“the Act”) [or a registered investment advisor with the states of [states with which Investment Advisor is registered]], and sets forth the terms and conditions under which Solicitor will assist the Investment Advisor in establishing client relationships.

1. Solicitor’s Representations

a. Solicitor represents that neither Solicitor nor any of its agents:

i. Is subject to an SEC order issued under Section 203(f) of the Act;

ii. Has been convicted of any felony or misdemeanor involving conduct described in Section 203(e)(2)(A) through (D) of the Act within the ten years before the date Solicitor signs this Agreement;

iii. Has been convicted or found by the SEC to have engaged in any of the conduct specified in Section 203(e) of the Act; or

iv. Is subject to an order, judgment or decree described in Section 203(e) of the Act.

b. Solicitor will promptly notify Advisor if any of the representations and warranties in paragraph 1(a) ceases to be true.

c. Solicitor understands that it must comply with all applicable rules and regulations in connection with the solicitation services provided under this Agreement, including all federal and/or state laws, rules and regulations, and the applicable rules of self-regulatory organizations that may have jurisdiction over Advisor’s investment advisory business. Solicitor understands that the requirements for client solicitation may differ from state to state. Some states may not have any requirements regarding the solicitation of clients while other states

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may require that Solicitor be registered as an investment advisor to solicit clients on Advisor’s behalf.

d. Solicitor further represents and warrants that Solicitor is and will remain at all times during the term of this Agreement, properly registered, licensed and/or qualified under applicable federal and/or state laws, rules and regulations, and the applicable rules of self-regulatory organizations that may have jurisdiction over Advisor’s investment advisory business.

e. Solicitor will promptly notify Advisor if at any point it ceases to be appropriately registered or licensed, to the extent required.

f. Solicitor will make available to Advisor all such registration, licenses and other documents as Advisor may reasonably request during the term of this Agreement.

g. If Solicitor is registered as an investment advisor, Solicitor warrants that all amendments to Form ADV required by the Act and/or applicable state securities laws and rules have been made and filed with the SEC and/or each applicable state securities regulator. Solicitor agrees to amend its Form ADV to disclose the relationship created by this Agreement if such amendment is necessary.

h. If Solicitor is a corporate entity, all of the above representations are true for any officer, director, partner, member, employee, agent or representative acting for Solicitor. And in such case, Solicitor is solely and exclusively responsible for the supervision of the activities of its own officers, directors, partners, members, representatives, employees and other agents.

2. Advisor’s Representations

Advisor is registered as an investment advisor with the SEC [or any states where registered].

3. Relationship Between Solicitor and Advisor

a. Solicitor is an independent contractor. Nothing contained in this Agreement will be construed to create a relationship of employer-

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employee, agency, representative, partnership, joint venture, or any relationship other than that of an independent contractor. Solicitor will inform each client that Solicitor is an independent contractor engaged to perform the services described in this Agreement and not employed by Advisor.

b. Solicitor will not provide any investment advisory services of any type on behalf of Advisor, and will not make any representations that would reasonably cause a potential client to believe that Solicitor is rendering or will render investment advisory services on Advisor’s behalf.

c. Solicitor understands that Advisor cannot guarantee that its clients’ accounts will be profitable and that there can be no assurance that Advisor’s services to any Solicited Client will not result in losses.

4. Solicitor’s Duties

a. Solicitor will use its best efforts to only solicit or refer clients to Advisor individuals or entities Solicitor believes are suitable and appropriate for the investment advisory services provided by Advisor.

b. Solicitor will not solicit or refer clients to Advisor in any jurisdiction unless and until notified by Advisor that both Advisor and Solicitor are legally authorized to do so under applicable federal and state securities laws.

c. Solicitor has no authority to bind Advisor in any way and will only make representations to clients about Advisor and its investment advisory services that are:

i. Expressly authorized by this Agreement;ii. Contained in Advisor’s Form ADV;

iii. Contained in Advisor’s Investment Advisory Agreement with its clients; or

iv. Contained in marketing materials provided by Advisor for Solicitor’s use, as amended from time to time.

d. Solicitor understands the investment advisory services and programs offered by Advisor. Solicitor agrees to use the most current

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information and materials available describing Advisor’s services and programs when recommending Advisor’s services.

e. In soliciting clients for Advisor, Solicitor will use only investment advisory and marketing materials provided by or approved by Advisor. Solicitor will not publish advertisements, distribute sales or promotional literature or engage in any communication describing Advisor’s services without obtaining prior written approval from Advisor concerning the use of such materials or communication.

f. When soliciting a client, Solicitor will provide any prospective client with the following (in addition to any approved marketing materials): (1) a copy of Advisor’s current Form ADV Part 2 or Advisor’s Disclosure Brochure, and (2) Solicitor’s Disclosure Statement, a sample of which is attached to the Agreement as Exhibit 1.

g. Advisor may also require Solicitor to provide prospective clients with a copy of Advisor’s Privacy Policy at the time of the initial solicitation, as well as other information or questionnaires that Advisor may provide and request Solicitor to supply to prospective clients.

h. At the time it solicits a client, Solicitor will obtain each prospective client’s written acknowledgment that he or she received Advisor’s Form ADV Part 2 and Solicitor’s Disclosure Statement, retain a copy of the client’s written acknowledgement, and provide the original of that written client acknowledgment to Advisor.

i. Solicitor understands that Advisor may decline to accept or decide to cease doing business with any prospective client referred by Solicitor. Solicitor does not have any authority to accept any clients on behalf of Advisor, and Advisor is not obligated to accept any prospective client referred by Solicitor. Any prospective client that becomes a client of Advisor as a direct result of Solicitor’s efforts is hereafter referred to as a “Solicited Client.” Advisor may terminate its relationship with any Solicited Client at any time, with or without cause, in accordance with the terms of the Investment Advisory Agreement, without any obligation to Solicitor. Similarly, any Solicited Client is free to terminate its relationship with Advisor at any time, with or without cause, in accordance with the terms of the Investment Advisory Agreement, without any obligation of Advisor to Solicitor.

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j. Solicitor will communicate with Solicited Clients as necessary to assist Solicited Clients in understanding Advisor’s advisory services and/or obtaining or updating information about Solicited Clients for Advisor.

k. Solicitor will keep confidential any information obtained from or about any prospective client and Solicited Client in connection with this Agreement, and will not disclose any such information without client consent.

l. Solicitor will keep confidential all ideas, techniques, and materials supplied by Advisor and shall not reproduce or distribute any of these to any other person at any time or use these after the termination of this Agreement without Advisor’s express written consent.

m. Solicitor will prepare and maintain all books and records requested by Advisor.

n. Solicitor shall promptly forward to Advisor any prospective client or Solicited Client complaint and any inquiry by any federal or state regulatory agency or any self-regulatory organization.

o. Solicitor shall cooperate with Advisor in the investigation and defense of any complaint, inquiry, arbitration, litigation, or other proceeding involving a prospective or Solicited Client.

p. Solicitor shall ensure that all checks, money orders or wires of money to be placed under Advisor’s management by Solicited Clients are made payable and sent by Solicited Clients to the custodial broker-dealer, bank, insurance company, mutual fund or other qualified custodian. Solicitor agrees not to accept cash or any other instrument payable to Solicitor or Advisor.

q. Solicitor will perform its responsibilities under this Agreement in accordance with the instructions of Advisor and the provisions of the Act and the rules thereunder, including Rule 206(4)-3, and/or any applicable state laws.

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5. Advisor’s Duties

a. Advisor will provide or make available its current Form ADV Part 2 to Solicitor.

b. Advisor will also provide or make available its current Privacy Policy to Solicitor if needed.

c. Advisor may make available advisory marketing materials for Solicitor’s use, or will work with Solicitor to create marketing materials for Solicitor’s use.

d. If authorized in writing by a Solicited Client, Advisor will deliver to Solicitor copies of account statements and performance reports with respect to the Solicited Client’s account(s) under Advisor’s supervision or management.

6. Solicitor Compensation

a. Advisor will pay Solicitor for the solicitation services provided by Solicitor, ______ % of the investment advisory fees paid per annum by Solicited Clients, for so long as this Agreement remains in effect. Advisor will pay Solicitor the percentage of advisory fees owed to it on a quarterly basis, within 30 days of the end of the fiscal quarter in which Advisor receives the advisory fees paid by the Solicited Clients. Advisor has no obligation to pay Solicitor any percentage of fees earned until Advisor receives such fees from the relevant Solicited Client(s).

b. Advisor will not pay Solicitor compensation (and Solicitor must refund Advisor) any fees paid by Solicited Clients that have been refunded to Solicited Clients for any reason. Advisor may elect, in its sole discretion, to offset any such amounts against future payments to Solicitor.

c. Advisor will only continue to pay fees to Solicitor for soliciting a particular client so long as that Solicited Client remains a paying client of Advisor. Advisor will continue to pay Solicitor for any terminated client only up until Advisor’s last billing date for that client.

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d. Advisor is not obligated to make any payment to Solicitor if such payment constitutes a violation of applicable federal or state laws.

e. This Agreement will not result in Advisor charging Solicited Clients a higher advisory fee than it would charge them if they had not been referred to Advisor by Solicitor.

7. Solicitor to Act Exclusively for Advisor

a. During the term of this Agreement, Solicitor shall exclusively act as a solicitor of investment advisory business for Advisor, and shall not take any action to:

i. Refer a potential client to another investment advisor;ii. Induce or solicit any Solicited Client to terminate his or her

relationship with Advisor; oriii. Reduce the amount of assets of such Solicited Client managed

by Advisor.

b. Solicitor acknowledges that Advisor shall have the right to enter into solicitation agreements with other persons.

8. Indemnity

The parties will indemnify each other, their officers, directors, managers, and employees and hold them harmless against any claims, losses, damages, liabilities, costs and/or expenses, including reasonable attorney’s fees and costs of investigating and defending against any claims, suits, actions or proceedings, incurred by them arising out of any breach, act or omission or violation of law or any of the terms of this Agreement. Parties’ obligations under this paragraph will survive the termination of this Agreement.

9. Compliance with Regulation S-P

Notwithstanding any contrary provision in this Agreement, each party agrees that any “nonpublic personal information” as defined under Section 248.3(t) of Regulation S-P (“Regulation S-P”) promulgated under the Gramm-Leach-Bliley Act, disclosed by a party is for the specific purpose of permitting the other party to perform the services set forth in this

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Agreement. Each party agrees that, with respect to such information, it will comply with Regulation S-P and the Gramm-Leach-Bliley Act and that it will not disclose any nonpublic personal information received in connection with this Agreement to any other party, except to the extent necessary to carry out the services set forth in this Agreement or as otherwise permitted by Regulation S-P or the Gramm-Leach-Bliley Act.

Both parties agree to comply with all other applicable federal and state laws, rules and regulations pertaining to the confidentiality of client information and will take reasonable measures to safeguard any non-public personal information maintained or shared under this Agreement.

10. Term

a. This Agreement will remain in effect until terminated at any time by either of the parties upon five (5) days’ advance written notice.

b. Upon termination of this Agreement, each party will keep confidential any proprietary information or client information obtained during the term of the Agreement, including sales or marketing material, client information or lists, and will return such information upon the request of the other party, except as may be required to be maintained under the Act or other applicable federal or state law or as may be required to be disclosed by law.

c. Upon termination of this Agreement, Advisor may continue to act as investment advisor to any Solicited Client.

11. Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the State of ________ without giving effect to its conflict of laws principles, except and to the extent superseded by federal law.

12. Arbitration

a. Any dispute arising out of this Agreement shall be subject to final and binding arbitration according to the Commercial Arbitration Rules of the American Arbitration Association then in effect. Judgment upon any arbitration award may be entered in any court, state or federal

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court, having jurisdiction. The prevailing party in any arbitration and other legal proceeding under this paragraph shall be entitled to recover reasonable attorney’s fees, costs and expenses.

b. Both parties note the following provisions regarding arbitration:

i. All parties to this Agreement are giving up the right to sue each other in court, including the right to a trial by jury, except as provided by the rules of the arbitration forum in which a claim is filed.

ii. Arbitration awards are generally final and binding and a party’s ability to have a court reverse or modify an arbitration award is very limited.

iii. The ability of the parties to obtain documents, witness statements and other discovery is generally more limited in arbitration than in court proceedings.

iv. The arbitrators generally do not have to explain the reason(s) for their award.

v. The rules of some arbitration forums may impose time limits for bringing a claim in arbitration.

vi. In some cases, a claim that is ineligible for arbitration may be brought in court.

vii. The rules of the arbitration forum in which a claim is filed, and any amendments thereto, shall be incorporated into this Agreement.

13. Amendment and Assignment

a. This Agreement may only be amended in a writing signed by both parties. To the extent the parties are organizations, this writing must be signed by an Officer or Director of the party.

b. This Agreement shall be binding upon and inure to the benefit of the parties, their heirs, successors or assigns.

c. Solicitor may not assign or delegate the rights or performance under this Agreement by operation or law or otherwise without Advisor’s prior written consent.

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d. No person other than Advisor and Solicitor shall have any rights or be entitled to any benefits under the terms and conditions of this Agreement.

14. Waiver

No term or provision of this Agreement will be deemed waived and no breach excused, unless and until such a waiver or consent is in writing and signed by the waiving or consenting party. Waiver of one breach shall not be deemed to be a waiver of any other breach of the same or any other provision herein.

15. Notices

Any notice to be given to Solicitor or Advisor under this Agreement shall be deemed effective if sent by certified mail, overnight delivery or email, with return receipt requested, to the address set forth on the signature page.

16. Entire Agreement and Severability

a. This Agreement contains the entire agreement between the parties, who have made no other representations or warranties.

b. If any provision of this Agreement is unenforceable, it shall not invalidate any other provisions.

c. Failure of either party to enforce any term or condition of this Agreement is not a waiver of that term or condition.

17. Counterparts

This Agreement may be executed in counterparts, each of which shall be deemed an original. Such counterparts, when taken together, shall constitute one and the same Agreement.

This Agreement is made as of ______________ and shall become effective immediately, but Solicitor may only commence services on behalf of Advisor when permitted under the provisions of this Agreement.

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On Behalf of Solicitor

Name: ___________________________________

Title:______________________________

Address:

___________________________________

_____________________________

Signature:__________________________

Date:______________________________

On Behalf of Advisor

Name: ___________________________________

Title:______________________________

Address:

___________________________________

_____________________________

Signature:__________________________

Date:______________________________

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EXHIBIT 1

SAMPLE SOLICITOR’S DISCLOSURE STATEMENT

The purpose of this Solicitor’s Disclosure Statement is to comply with the requirements of Rule 206(4)-3 of the Investment Advisers Act of 1940 (the “Act”), and to inform you, [Name of Client] (“Client”) that [Name of Solicitor] (“Solicitor”) currently serves as a unaffiliated solicitor for [Name of Registered Investment Adviser] (“Investment Advisor”), a registered investment advisor under the Act.

Client hereby acknowledges receiving and understanding the following disclosures provided by Solicitor:

Solicitor and Investment Advisor have entered into a written agreement whereby Solicitor will use its best efforts to solicit and refer as clients to the Investment Advisor those individuals or entities that it believes are suitable and appropriate for the investment advisory services provided by the Investment Advisor, in exchange for cash commissions to be paid by Investment Advisor.

Investment Advisor will pay Solicitor ______ % of the investment advisory fees paid per annum by Client to Investment Advisor.

Investment Advisor will not charge Client any additional fees as a result of its agreement with Solicitor. The amount of fees that Investment Advisor will charge Client for investment advisory services is the same as what it would customarily charge any new client who was not referred by Solicitor.

Solicitor may make periodic contacts with Client as necessary to assist Client in understanding Investment Advisor’s services and/or obtain additional information from Client on behalf of Investment Advisor.

Solicitor is an independent contractor, and is not an affiliate, agent, representative, partner or employee of Investment Advisor.

Solicitor is not authorized to and will not provide investment advice or manage investments on behalf of Investment Advisor.

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Solicitor does not have authority to accept a client agreement on behalf of Investment Advisor or to collect or receive payment in its own name for any of the Investment Advisor’s services. All client agreements with the Investment Advisor are subject to acceptance by the Investment Advisor.

Acknowledgment of Receipt of Disclosures and Documents:

By signing below, Client acknowledges receiving this Solicitor’s DisclosureStatement, with all disclosures recited above, as well as a copy of Investment Advisor’s Form ADV Part 2.

Client also acknowledges that by signing this Solicitor’s Disclosure Statement, it is not entering into any relationship with Investment Advisor for investment advisory services. Such services are only available pursuant to a separate agreement with Investment Advisor.

Client Printed Name

Name: ___________________________________

Signature:__________________________

Date:__________________________

Client 2 Printed Name (if applicable)

Name: ___________________________________

Signature:__________________________

Date:______________________________

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About Greenwich Compliance

Greenwich Advisor Compliance Services Corp. (“Greenwich Compliance”), an Interactive Brokers Group company, offers expert registration consulting and start-up compliance services for financial advisors trading on the Interactive Brokers platform. Greenwich Compliance offers resources to help advisors navigate the registration process and avoid common pitfalls that may delay their registration. The team at Greenwich Compliance is available for free consultations for advisors with questions about when and where to register.

www.greenwichcompliance.com

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