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.
Now that we are into a new year, can you confirm your registered investment adviser firm and its investment adviser representatives were properly renewed for 2015? Every year there are always a handful of investment adviser firms that fail to submit renewal fees through the IARD system in a timely fashion. Therefore, even if you think the renewal payment was sent in time, please make sure your investment adviser firm retrieves the Final Renewal Statement and confirms it is renewed for calendar year 2015.
October 22, 2013
Investment adviser firms and investment adviser representatives must maintain active registrations and/or notice filing statuses with applicable jurisdictions/states. Unless properly renewed, all investment adviser firm and investment adviser representative licensing approvals expire on December 31 of each calendar year. In order to ensure investment adviser firms and their investment adviser representatives are properly licensed in all necessary jurisdictions for 2014, renewal fees must be paid through the Investment Adviser Registration Depository (“IARD”) system.
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.
August 20, 2013
Per the provisions of 13:47A-3A.1 Registration of State registered investment adviser representatives, and N.J.S.A. 49:3-56(p), every individual applying for registration as an investment adviser representative must submit to being fingerprinted for a Criminal History Background Check. The State of New Jersey has contracted with a vendor, MorphoTrak, to perform this service.
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. . . .”
February 10, 2013
When an individual is considering whether to start a registered investment adviser, a primary concern is how much will it cost to set-up an investment adviser firm. The set-up expenses can vary greatly depending upon whether the firm will need to register as an investment adviser with the U.S. Securities Exchange Commission (“SEC”) or with the state securities regulator, the size of the investment adviser, the complexity of the proposed investment adviser’s business model, and the conflict or potential conflict of interest situations that will exist. An individual looking to register as an investment adviser will not only need to take into consideration the cost involved in the actual investment adviser registration process but will also need to consider the cost of getting the appropriate office set-up and systems in place as well as any staffing related costs.
December 09, 2012
If an investment adviser representative was previously licensed as a registered representative/securities agent with a broker/dealer through the Web CRD system, the state securities regulator should be able to access fingerprint information already on file. Also, if an investment adviser representative was previously licensed with another investment advisor firm, the state securities regulator will generally not require a new fingerprint card. It should be noted that many state securities regulators do not even require a fingerprint card, so it is important you check with the state securities regulator prior to completing a fingerprint card.