Similar to other states, a firm seeking to register as a state registered investment advisor in New York is required to file the Form ADV Part 1 and Part 2 along with any applicable schedule or appendix through the Investment Adviser Registration Depository (“IARD”) system and correspondingly pay in advance the registration fees via the IARD system. Additionally, a firm applying for state registration as an investment advisor in New York is required to send the miscellaneous documents identified below directly to the New York Protection Bureau. Here is a brief summary of certain requirements of an investment advisor firm registering in New York.
There is currently no explicit net capital or bonding requirement for an investment advisor firm registered with the State of New York.
If the only form of custody by the New York registered investment advisor firm is fee deduction from client accounts, the additional requirements of the investment advisor firm are the following:
The information listed above regarding New York investment advisor registration is being provided for your convenience and is not intended as advice by RIA Compliance Consultants, Inc. Your use of or reliance upon this information does not create a consulting engagement with RIA Compliance Consultants.
Please understand that RIA Compliance Consultants does not guarantee the accuracy of the New York investment advisor registration requirements listed above. This information may not be current, and there may be additional New York investment advisor registration requirements which are not identified above. A prospective or existing New York registered investment advisor should review in detail the published investment advisor rules of New York Investor Protection Bureau.
The information on this website page is not intended to be an all-inclusive analysis of the state investment advisor registration requirements of New York. This website page is not intended as a substitute for and should not be considered the equivalent of consulting with investment advisor compliance professional.
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.
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.
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.
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 your state registered investment adviser firm completes its Form ADV Annual Amendment, it’s important not to forget that many state securities regulators also require a state registered investment adviser firm to submit annual financial statements and/or other documents directly to the state securities regulator (outside of the IARD/CRD system).
New York City houses one of the financial epicenters of the world so many may find it surprising that investment advisers with their principal office and place of business in New York are not subject to an examination by the New York Investor Protection Bureau. The New York Investor Protection Bureau is charged with enforcing the New York State securities laws and requires investment advisers to register with the New York Attorney General’s Office. Because the New York Investor Protection Bureau does not conduct examinations of investment advisers with a principal office and place of business who are registered with the New York Attorney General’s Office, the U.S. Securities and Exchange Commission (“SEC”) will handle the registration and examination of mid-sized investment advisers (investment advisers with between $25 million and $100 million of assets under management) with a principal office or place of business in New York.