Mississippi is the first state to adopt the Model Rule on Investment Adviser Representative Continuing Education (“Model Rule”) published by the North American Securities Administrators Association (“NASAA”) in 2020. Adopted without substantive changes, Mississippi’s new IAR CE rule closely tracks the Model Rule which will simplify compliance for investment adviser representatives registered in multiple states. As states continue to adopt the IAR CE Model Rule, NASAA will update its list of member states that are adopting the Model Rule.
Who must comply with Mississippi’s IAR CE Rule?
Any investment adviser representative registered in Mississippi must comply with the state’s IAR CE Rule. An IAR with a home state other than Mississippi who is registered or required to be registered in Mississippi will be considered in compliance if: (1) the investment adviser representative’s Home State has continuing education requirements that are at least as stringent as NASAA’s Model Rule, and (2) the investment adviser representative is in compliance with the Home State’s IAR CE requirements.
When must IARs begin complying with Mississippi’s IAR CE Rule?
Under the rule, an investment adviser representative’s initial reporting period with Mississippi commences the first day of the first full Reporting Period after the individual is registered or required to be registered with this state. For currently registered investment adviser representatives, this means compliance will begin with the 2022 calendar year. Newly registering investment adviser representatives must comply by the end of the first full calendar year following the year in which they become registered.
How many credits are required each year?
Six credits of IAR Products and Practice Content and six credits of Ethics and Professional Responsibility are required. Of the Ethics and Professional Responsibility credits, at least three must cover ethics.
Is there an exception for dually registered IARs that satisfy their continuing education requirements for FINRA?
Partially. A representative who is dually registered as an agent of a FINRA member broker-dealer and who complies with FINRA’s continuing education requirements will satisfy the Products and Practices portion of the requirement, provided the FINRA continuing education meets certain standards set out by NASAA. The IAR must still complete six credits of Ethics and Professional Responsibility courses, including at least three ethics.
Are there any exceptions from the CE requirement for IARs who possess a professional designation or other specified qualifications?
Yes. To the extent that the professional designation is current and qualifies the individual for an examination waiver in Mississippi, continuing education credits earned for the professional designation can qualify for IAR CE credits. Note, however, the course must be “Approved IAR Continuing Education Content,” meaning that IARs must seek out courses that have been approved both by their credentialing organization and NASAA in order to earn dual credit.
What happens if an IAR does not fulfill the CE requirement for one or more calendar years?
If an IAR does not fulfill the annual requirement by the end of the calendar year, the IAR’s registration status will be set to “CE Inactive,” which will be viewable by the Mississippi Securities Division and by the general public on IAPD and Broker Check. The CE Inactive status will remain until the deficiencies are corrected or further action is taken by the Securities Division. If the CE Inactive status persists through the close of the following calendar year, the IAR will be ineligible to renew their registration or to initiate a new IAR registration until the deficiency is corrected.
Can an IAR “carry over” credits earned in one calendar year to the next, provided they have met the current annual requirement?
No, credits earned in excess of the annual requirement cannot be used to satisfy the CE requirement in subsequent years. In the event an IAR has a CE deficiency from a prior year, any credits earned will be first applied to the prior year deficiency before being used to satisfy a current year requirement.
If a Mississippi IAR has terminated their registration but wishes to re-register within the two-year window, must the IAR complete CE for the year(s) that they were not registered?
Yes, the IAR must correct any CE deficiency prior to re-registering as an IAR. Alternatively, the IAR can retake the Series 65 or Series 66 exam (or satisfy an applicable state exam waiver).
Can the IAR CE requirement be waived for Mississippi?
The rule permits the Securities Division to waive any IAR CE requirement in its sole discretion. However, there is no indication of the conditions under which a waiver might be granted. Although an IAR with unusual or exigent circumstances might contact the regulator to inquire, all IARs registered in Mississippi should be prepared to fully comply with the rule and should not rely on the possibility of a waiver.
If your state registered or SEC registered investment adviser firm is an existing client of RIA Compliance Consultants and has questions about IAR continuing education, 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.
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The information contained in this blog post is general in nature intended for educational purposes only and is not intended to be a comprehensive analysis of this topic. It is not intended to constitute compliance consulting advice or apply to any particular investment adviser firm’s specific situation. Please consult the applicable securities regulator’s rules and published guidance for more details about the topics referenced above. For more information about the limitations of this blog post and information on our website, please see our Disclosures webpage.
Posted by Tyler Bolden
Labels: IAR Licensing, Investment Adviser Rep Continuing Education, Mississippi Investment Advisor, NASAA
Tagged: IAR Licensing, Investment Adviser Rep Continuing Education, Mississippi Investment Advisor, nasaa