New York State Mandatory Registration for Investment Adviser Representatives

New York State Mandatory Registration for Investment Adviser Representatives

First, a bit of background:

On December 2, 2020 the New York State Department of Law adopted new regulations, to administer registration and examination requirements of natural persons representing investment advisers. Prior to the adoption of the new regulations, New York was the only state that did not register individuals acting in the capacity of an investment adviser representatives through FINRA’s CRD system. The update to the regulations is beneficial in the following ways, among others: Providing the public with detailed information about investment adviser representatives who provide investment advice in the State, modernizing the registration process, aligning the registration process with that of all other states and diminishing confusion in the industry.

Who?

For State-Registered Investment Advisers included in the registration requirement are all principals, supervisors, investment adviser representatives, and individuals who are solicitors. It is important to note that all investment adviser representatives, principals, and supervisors of investment advisers registered with the State of New York should have already met the preexisting exam and or waiver requirements by submitting the Form NY-IAQ.

For SEC-Registered Investment Advisers included are those individuals who are defined as investment adviser representatives (by the SEC). The SEC definition of an investment adviser representative does not include principals or supervisors except for those persons otherwise fitting within the definition.

What?

  • Submission of Form U4
  • NY-IAQ – Validation of qualification, as applicable & email to [email protected]
  • NY-IASW – Special Waiver request form, as applicable & email to [email protected]
  • Fees – $200 New York IAR registration fee and $15 CRD System Filing fee. (The $15 CRD system filing fee will not be included for individuals currently registered as investment adviser representatives in other states.)
  • Examination/s – If qualifications are not met through previously submitted NY-IAQ form, special waiver, or professional designation.

The Form NY-IASW is to be used for the purpose of applying for a new special waiver for exemption from the examination requirements. Individuals who currently serve, permissibly, as investment adviser representatives that have a minimum of two (2) years of experience as such prior to December 2, 2020, may apply for the new special waiver. Individuals previously acting solely as solicitors and individuals with disciplinary history are not eligible for the new special waiver. The waiver request will be reviewed by the New York Investor Protection Bureau and the CRD system will be updated with the status accordingly. Waivers that are not approved will necessitate the passing of the examinations (Series 65 or Series 7 and Series 66).

Individuals may also meet the investment adviser representative registration qualifications by having been registered in other jurisdictions (continuously registered for two (2) years prior to the date of filing registration information), or by holding (in good standing) the following professional designations: CFP, ChFC, PFS, CFA or CIC.

When?

The State of New York Investor Protection Bureau is providing an implementation period beginning on February 1, 2021 through December 2, 2021. Even though the implementation period is ten months in length, the time will pass quickly. The New York Investor Protection Bureau is strongly encouraging advisory firms to submit the Form U4, with applicable fees, as soon as possible beginning on February 1, 2021. The Form U4 filings for all individuals must be submitted by August 31, 2021. Applicants for Investment Adviser Registration who do not meet the qualification requirements have until December 2, 2021 to pass the required examinations.

Where?

Form U4 filings must be submitted via the CRD system. The Form NY-IAQ and Form NY-IASW must be submitted to the specific email addresses as noted above. Full details and information may be reviewed at: https://ag.ny.gov/press-release/2020/attorney-general-james-announces-final-rules-modernize-and-streamline-securities