Kentucky Changes Registration Requirements for Investment Adviser Representatives

July 20, 2010

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The General Assembly of the Commonwealth of Kentucky recently made several changes to the Securities Act of Kentucky which affect investment adviser representatives and their registration requirements.

First, the definition of “investment adviser representative” has been slightly changed.  The term is now defined as “an individual employed by or associated with an investment adviser…and who makes any recommendations or otherwise gives investment advice regarding securities, manages accounts or portfolios of clients, determines which recommendations or advice regarding securities should be given, provides investment advice or holds himself or herself out as providing advice, receives compensation to solicit, offer, or negotiate for the sale of or for selling investment advice or supervises employees who perform any of the foregoing.”

The other major change relates to the registration of investment adviser representatives.  All investment adviser representatives are now required to be registered unless they are exempt from registration under the Kentucky Securities Act.  Prior to the recent changes, an individual who was a partner, officer, or director, (hereinafter “executive”) of a registered investment adviser or a person occupying a similar status or performing similar functions with an investment adviser was not required to register as an investment adviser representative.  However, this exemption for executives of investment advisers is no longer valid.  Therefore, all executives of registered investment advisers who meet the revised definition of investment adviser representative must complete and file a Form U4, the Uniform Application for Securities Industry Registration or Transfer, through the Central Registration Depository (CRD) system in order to remain registered as an investment adviser representative.

The final date to comply with Kentucky’s new investment adviser representative registration requirement is October 15, 2010.  If you need advice or assistance regarding registration as an investment adviser representative in the State of Kentucky, any of our compliance consultants are willing to assist you.

Posted by Bryan Hill
Labels: IAR Licensing