Minnesota Investment Adviser Representative Registration Requirements

August 28, 2013

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As we previously indicated in an article on June 28, 2013, Minnesota will soon begin requiring registration for investment adviser representatives located or conducting business in Minnesota.  In order to register investment adviser representatives, investment advisers will have to file a Form U4 through Web CRD/IARD system. Investment adviser representatives will be required to meet the examination requirements defined in the law, the Series 65 examination or the Series 7 and Series 66 examinations, prior to being registered. The new law was effective August 1, 2013.

Since our last article, the Minnesota Department of Commerce – Securities Unit (“Minnesota Securities Unit”) has provided some updated information on its website to address a number of questions that have arisen as a result of the new law. These updates indicate that FINRA has advised the Minnesota Securities Unit that the Web IARD/CRD system updates needed to accept new investment adviser representative registrations will not be ready until at least the last week of October. Because of this, the effective date of August 1st must be extended. Additionally, the updates indicate that the Minnesota Securities Unit intends to accept professional designations, the CFP, ChFC, CFA, PFS, and CIC, in lieu the examination requirements (Series 65 or the Series 7 and Series 66). The website indicates that the Minnesota Securities Unit’s current position is that registered investment adviser representatives who are registered in other states and who have passed the states examination requirements will be automatically registered. However, new investment adviser representatives should be required to take and pass either the Series 65 examination or both the Series 7 and Series 66 examinations as a condition of registration. Questions regarding a deadline for passing the examination and “grandfathering” remain: “The Department is currently considering providing ‘restricted approval’ subject to taking and passing the examination(s) within a certain timeframe. We are also considering a waiver in appropriate circumstances. We have not finalized our position on these remaining issues.”

RIA Compliance Consultants will continue to monitor this situation and will provide updates regarding the requirements and deadlines as they become available.  However, investment advisers located or conducting business in Minnesota should take heed to this warning and know that they will likely need to register their investment adviser representatives in Minnesota sometime this year.  If the investment adviser representatives that will be required to register do not currently meet the minimum examination requirements, investment advisers are encouraged to begin preparing these individuals to take the proper examination(s).

Posted by Bryan Hill
Labels: Form U4, How to become an RIA, IAR Licensing, IARD, Minnesota Investment Advisor, Series 65