Proposed Rule to License New York Investment Adviser Representatives

April 15, 2020


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In April 2020, the New York Attorney General’s Investor Protection Bureau (IPB) proposed rule changes to 13 NYCRR Part 11. These rule changes would require the registration of investment adviser representatives through the IARD system. New York investment adviser representatives would be required to meet registration and exam requirements. Under the proposed rules, those who must be registered include individuals working for state or SEC-registered investment adviser firms. Currently, New York is the only state that does not license investment adviser representatives. The application for initial registration as an investment adviser representative would be made by completing the Form U4 and filing the form with the CRD/IARD. Click the following link to read the proposed rules in their entirety https://ag.ny.gov/sites/default/files/full-text-13nycrr11.pdf.

New York Solicitors

The proposed rules would also require all solicitors with more than five clients in the State of New York to register as an investment adviser (11.4(c) Registration Information). The proposed rules state, “solicitors are subject to the same registration and examination requirements as investment advisers, and principals and representatives of solicitors are subject to the same registration and examination requirements as investment adviser representatives.”

Purpose

In the Summary of Revised Regulations issued by IPB they claim:

“Such registration will close gaps in nationwide regulation efforts which in certain cases, fail to connect investment adviser representatives with their past record in the securities industry. The complete record of these individual’s records is necessary to protect the public and is maintained in every other state. The Attorney General, by these revisions, now provides notice that investment adviser representatives – including principals and supervisors, as well as solicitors, will upon adoption and implementation of these regulations be explicitly required to meet exam requirements and register with the State.”

Status of Proposed Rules

The rules proposed by IPB to require New York investment adviser representative registration are now in a 60-day period for public comment. Comments should be directed to New York’s Investor Protection Bureau.  RIA Compliance Consultants will continue to monitor the status of these proposed rules and post any updates to our blog.

References

New York Attorney General – https://ag.ny.gov/press-release/2020/attorney-general-james-moves-modernize-and-streamline-securities-filings-nys

IPB Rule Proposal https://ag.ny.gov/ipb-rule-proposal

Summary of Revised Regulations https://ag.ny.gov/sites/default/files/summary-ipb-rule-proposals.pdf

Text of Revised Regulations https://ag.ny.gov/sites/default/files/full-text-13nycrr11.pdf

Posted by RCC Admin
Labels: Form U4, IAR Licensing, New York investment Advisor
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