In light of the new investment adviser representative (“IAR”) licensing requirement of the State of New York, RIA Compliance Consultants has updated its sample compliance manual section for investment adviser representative licensing in New York.
February 16, 2021
The State of New York recently announced a special exam waiver window on the Central Registration Depository (“CRD”) system, which will affect existing investment adviser representatives (“IARs”) seeking registration in New York via an exam waiver (in lieu of taking and passing the Series 65 or Series 66 & 7 examinations). IAR applicants requesting an exam waiver should apply between February 27, 2021 and August 31, 2021 in order to avoid opening an unnecessary exam window on the CRD system and being charged an examination fee. Between Feb. 27, 2021 and August 31, 2021, FINRA will temporarily modify the CRD system for NY only RA registration requests to allow the applicants who qualify for an exam waiver to avoid opening a window.
The State of New York’s new investment adviser representative (“IAR”) registration requirements are now effective. Prior February 1, 2021, New York remained the final state that did not require investment adviser representatives to be licensed with the state securities regulator by filing the Form U4. Adopted in December 2020, the rule changes now require the registration of investment adviser representatives – including principals, supervisors and solicitors for registered investment adviser firms – by filing the Form U4 via the WebCRD/IARD system. Registration is required for investment adviser representatives of New York state registered investment adviser firms, as well as for investment adviser representatives of SEC-registered investment adviser firms, if the investment adviser representative conducts advisory activities from a place of business in New York.
December 07, 2020
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.
Does an Investment Adviser Representative Have to Disclose PPP Loan Forgiveness as a Compromise on Form U4?
April 17, 2020
As investment adviser firms start to receive loan proceeds through the Paycheck Protection Program (“PPP”), which is a loan program that originated from the Coronavirus Aid, Relief, and Economic Security (CARES) Act, many investment adviser firms have asked whether the forgivable nature of the PPP loan will constitute a compromise with a creditor for purposes of Item 14K of the Form U4 of an investment adviser representative who is a control person.
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.
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.
The Minnesota Department of Commerce – Securities Unit recently announced that during the last legislative session a bill was passed that has now been signed into law, resulting in changes to investment adviser representative (“IAR”) registration requirements. One of the significant changes that will likely impact many federally and state registered investment advisers, located or conducting business in Minnesota, is the requirement to register investment adviser representatives through the Web CRD/IARD system. Prior to this recent legislation, Minnesota did not have registration requirements for investment adviser representatives. However, Minnesota Statute 80A.58 Section 403(a) has now been revised to state, “It is unlawful for a person to transact business in this state as an investment adviser or investment adviser representative unless the person is registered under this chapter or is exempt from registration. . . .”
August 15, 2012
Investment adviser representatives must make amendments in a timely manner to their Form U4s when a material change occurs. Typically, this means filing an amended Form U4 within 30 days of the material change. Failure to do so can lead to fines, suspensions, or even being barred from acting as an investment adviser representative. Investment advisers must make sure their investment adviser representatives are aware of this requirement and understand the consequences of failing to update their Form U4s.