What Investment Advisor Reps Need to Know About New York State’s New Registration Requirements

The Investor Protection Bureau (IPB) of the New York State Attorney General’s office has adopted regulations that took effect February 1, 2021, under which investment advisor representatives (IARs) of both federal and state investment advisory firms must register with the state and meet certain education standards.


Firms also should make note of the August 31, 2021, submission deadline for a registration application, and the December 2, 2021, deadline for compliance with the state’s new registration requirements. Eligible IARs can continue to provide investment advisory services during the implementation period without an approved registration. The requirements apply to principals, supervisors, and representatives of firms, along with solicitors and certain IARs of federally registered firms.

The New York IPB suggests IARs start the registration process early.


How New York Defines ‘Investment Advisor Representative’

Historically, New York had been one of the few states that did not require IARs of federally registered investment advisors to register at the state level.

For a federally registered investment advisor, the term “Investment Adviser Representative” is defined by New York to mean generally any supervised person of an SEC-registered adviser (including any officer, director, or partner) who:

  • has more than 5 natural person clients, and
  • more than 10% of the person’s clients are natural persons other than ‘qualified clients’ defined as clients with more than $1 million in assets under management or $2.1 million in net worth.

A supervised person who has a place of business in the state of New York and has more than five natural clients in the state of New York will need to registrar as an IAR.  A supervised person is not considered an IAR if they do not regularly solicit, meet, or communicate with clients or provide impersonal investment advice.


Examination Requirements

IARs who satisfy minimum service and experience qualifications and who have no disciplinary history may apply for a waiver exempting them from the requirement to pass the Series 65 or the Series 7 and Series 66 examinations on or before December 2, 2021.

An investment adviser representative who has been continuously registered in any jurisdiction for at least two years with no regulatory or civil action, proceeding, or arbitration in the preceding 10 years is exempt from the exam requirements. There also are waivers for persons who satisfy prior registration requirements in other jurisdictions or who possess these certain specified certifications:

  • Certified Financial Planner (CFP)
  • Chartered Financial Consultant (ChFC)
  • Personal Financial Specialist (PFS)
  • Chartered Financial Analyst (CFA)
  • Chartered Investment Counselor (CIC), or
  • Such other professional designation as the administrator may by rule or order recognized.

Next Steps

  • Firms should check the status of IARs who do business in New York and submit their registration via Form U4 to New York on or before August 31, 2021, and pay the required fee of $200 through FINRA’s CRD/IARD system.
  • Check to see if your IARs qualify for the examination waiver. If they don’t, register them for the required examinations and note that the exams must be completed by December 2, 2021.
  • Update your internal policies and procedures to reflect these new requirements.

Core Compliance & Legal Services can assist with this process and all regulatory filing requirements. Contact us at 619.278.0020 or at www.corecls.com to schedule a consultation.


Leave a Reply

Your email address will not be published. Required fields are marked *