All states except New York have long had an individual registration requirement for investment adviser representatives (IARs). But that’s about to change.
Based on amendments to the New York Investment Advisory Act, beginning on February 1, 2021, IARs doing business within or from the state of New York will likely have to register by completing Form U4 and filing it with CRD/IARD along with a $200 licensing fee. This registration must be renewed and the fee must be paid annually.
There is an implementation period, which gives IARs until December 2, 2021 to get their approved registration in place as long as Form U4 is filed by August 31, 2021.
In addition to registration requirements, the state of New York now also places official examination requirements on IARs. Most IARs will likely qualify for an examination waiver either by having served as an IAR for at least the last two years (prior to February 1, 2021) or by holding a professional designation such as Certified Financial Planner, Chartered Financial Analyst, etc. There are certain disqualifying events for these waivers though – mainly for past or current regulatory actions – so be sure to refer to the revised rules for a thorough understanding.
Lastly, the amended rule now states that IARs must maintain documentation to support the designation of any client as an “accredited investor” or “qualified client” as those terms are defined under federal law.
The New York Attorney General’s office has provided additional guidance to help IARs understand these new mandatory registration and examination requirements.