New York Adopts Investment Adviser Representative Registration Rule

December 07, 2020


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In December 2020, the New York Attorney General’s Investor Protection Bureau (IPB) adopted proposed rule changes to 13 N.Y.C.R.R. Part 11. These rule changes require the registration of investment adviser representatives – including principals, supervisors and solicitors for registered investment advisers – through the WebCRD/IARD system beginning February 1, 2021. Prior to the rule change, New York was the only state that did not license investment adviser representatives via the WebCRD/IARD system. Click here to read the final adopted rule.

Who must register as an investment adviser representative in New York?

All investment adviser representatives, including principals, supervisors and solicitors, must apply for registration in connection with their representation of a New York state registered investment adviser or solicitor.  (Principal is defined as including “… every person or entity directly or indirectly controlling an investment adviser or solicitor.”) Additionally, an investment adviser representative for an SEC-registered investment adviser must apply for registration in connection with their representation if the investment adviser representative conducts advisory activities from a place of business in New York.

What is the deadline for registering as an investment adviser representative in New York?

Newly registering investment adviser representatives must register via CRD beginning February 1, 2021.

Existing investment adviser representatives will have until December 2, 2021 to comply with the registration requirement and may seek a waiver of the examination requirement under certain circumstances. However, existing investment adviser representatives must submit a Form U4 requesting investment adviser representative registration in New York for that person on or before August 31, 2021. Upon submitting the Form U4, applicants will have a fourteen day window to correct any non-examination related deficiency identified by the state. Examination related deficiencies must be corrected by December 2, 2021.

The state considers an existing investment adviser representative to be any individual who, prior to February 1, 2021, was serving continuously and permissibly in any capacity that requires investment adviser representative registration, and who, through continued service, is subject to the registration requirements. The rule change does not provide any relief to individuals who were acting as investment adviser representatives in violation of New York law prior to February 1, 2021.

After initial registration, investment adviser representatives must renew their registration annually, and make timely updating amendments through the year whenever material changes occur.

What are the examination requirements?

Every principal, solicitor, and investment adviser representative of an investment adviser must pass the Series 65, or both the Series 7 and Series 66, within two years of making the application for investment adviser representatives registration in New York, unless such individual qualifies for a waiver. An individual who is currently (prior to 2/1/2021) serving as investment adviser representative in New York and does not qualify for a waiver must take and receive a passing grade on the required examination(s) by December 2, 2021.

Are waivers of the examination requirement available?

Yes. The State of New York offers three types of examination waivers.

1. Prior Registration. Available to individuals who (1) have been continuously registered to provide investment advice in any jurisdiction for a period of at least two years prior to the date of filing the Form U4, (2) have not had any lapse in registration exceeding two years, and (3) are not, and have not been, subject to any regulatory or civil action, proceeding or arbitration, either pending or in the preceding ten years from the date of their application, that would require disclosure on Form U4.

2. Special Waiver. Available to individuals who, in the regular course of business, have acted as an investment adviser representative from a place of business in New York continuously and permissibly for at least two years prior to February 1, 2021 and who are not eligible for waiver due to prior registration or certification.

A special waiver is not available to the following:

-Individuals who submit an application for registration after August 31, 2021,

– Individuals whose investment advisory activities during the two years preceding December 2, 2020 were limited to serving or acting as a solicitor,

– Individuals who for two or more continuous years in the four years preceding the filing of registration have ceased conducting investment advisory activities in the regular course of business from a place of business in New York, or

– Individuals who currently are or have been subject to any regulatory or civil action, proceeding or arbitration, either pending or in the preceding ten years from the date of such application, that would require disclosure on Form U4, or who have been notified or have reason to believe that they currently are or remain the subject of a regulatory or law enforcement investigation related to investment related activities.

3. Certification. Individuals holding the following professional certifications are eligible for waiver:

– Certified Financial Planner (CFP)

– Chartered Financial Consultant (ChFC)

– Personal Financial Specialist (PFS)

– Chartered Financial Analyst (CFA)

– Chartered Investment Counselor (CIC)

Prior registration and certification waivers will be granted automatically via the CRD system. Special waivers must be submitted directly to the Department of Law on Form NY-IASW at the time of submission of the Form U4.

Previously granted examination waivers granted by the Department of Law prior to February 1, 2021 pursuant to Form NY-IAQ will not be automatically revoked. For a copy of this form to request waiver of examination in New York, visit https://ag.ny.gov/sites/default/files/ny-iasw.pdf .

How do I register as an investment adviser representative in New York?

After the implementation date of February 1, 2021, individuals must register by completing Form U4 in accordance with the Form U4 Instructions and by filing the form with CRD/IARD with the appropriate fees.

Contact Us

If your investment adviser firm is an existing client of RIA Compliance Consultants and would like assistance in registering one or more individuals as investment adviser representatives in the State of New York, we encourage you to speak with your compliance consultant. Or, if you are not an existing client of RIA Compliance Consultants, click here to set up an introductory call with our Business Development Team.

Sample Forms

Sample Forms

Sample Compliance Manual Section – IAR Licensing in New York

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Posted by Grant Parr
Labels: Form U4, IAR Licensing, Investment Adviser Representative, New York investment Advisor, Series 65
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