Federal Covered Advisor

Definition of 'Federal Covered Advisor'


An investment advisor in the United States that manages more than $25 million in assets for other investors or who is providing services in 30 or more states. Federal covered advisors are required to be registered and file annually with the U.S. Securities and Exchange Commission (SEC). In addition, federal covered advisors must meet specific regulations set forth by individual states.

Also called federal covered investment advisor.

Investopedia explains 'Federal Covered Advisor'


Federal covered advisors are required to file a notice with the state in which they plan to conduct investment advisor business. A state covered investment advisor is an investment advisory firm that has assets under management of less than $25 million. States require federal covered advisors to file a notice if the firm has six or more clients who are residents of that state, or if the firm is operating a place of business in that state.

The Investment Advisors Supervision Coordination Act, which became effective on July 8, 1997, was established to reallocate federal and state regulation of investment advisors. The Act was designed to make states responsible for smaller advisors and the SEC responsible for larger advisors.



comments powered by Disqus
Hot Definitions
  1. XW

    A symbol used to signify that a security is trading ex-warrant. XW is one of many alphabetic qualifiers that act as a shorthand to tell investors key information about a specific security in a stock quote. These qualifiers should not be confused with ticker symbols, some of which, like qualifiers, are just one or two letters.
  2. Quanto Swap

    A swap with varying combinations of interest rate, currency and equity swap features, where payments are based on the movement of two different countries' interest rates. This is also referred to as a differential or "diff" swap.
  3. Genuine Progress Indicator - GPI

    A metric used to measure the economic growth of a country. It is often considered as a replacement to the more well known gross domestic product (GDP) economic indicator. The GPI indicator takes everything the GDP uses into account, but also adds other figures that represent the cost of the negative effects related to economic activity (such as the cost of crime, cost of ozone depletion and cost of resource depletion, among others).
  4. Accelerated Share Repurchase - ASR

    A specific method by which corporations can repurchase outstanding shares of their stock. The accelerated share repurchase (ASR) is usually accomplished by the corporation purchasing shares of its stock from an investment bank. The investment bank borrows the shares from clients or share lenders and sells them to the company.
  5. Microeconomic Pricing Model

    A model of the way prices are set within a market for a given good. According to this model, prices are set based on the balance of supply and demand in the market. In general, profit incentives are said to resemble an "invisible hand" that guides competing participants to an equilibrium price. The demand curve in this model is determined by consumers attempting to maximize their utility, given their budget.
  6. Centralized Market

    A financial market structure that consists of having all orders routed to one central exchange with no other competing market. The quoted prices of the various securities listed on the exchange represent the only price that is available to investors seeking to buy or sell the specific asset.
Trading Center