On December 1, 2020, the state of New York adopted new regulations that amended its Investment Advisory Act to require the registration of investment adviser representatives (“IAR”) including principals, supervisors, and solicitors through the WebCRD/IARD system. Prior to the rule change, New York was the only state that did not license IAR via the WebCRD/IARD system. The change to to New York IAR registration will go into effect on February 1, 2021 for all new registrants, and December 2, 2021 for any New York IARs already providing services, provided they apply for registration by August 31, 2021.
The Amendments
The amendments have three major components. The first component provides existing New York IARs already providing services more time to register in the state, pushing the due date from February 1, 2021 all the way to December 2, 2021, so long as they apply for registration by August 31, 2021.
The second component creates a new examination special waiver category and new Form NY-IASW, for persons currently acting as IARs with two years of experience prior to the rule effective date, excluding those previously acting solely as solicitors or those with disciplinary history.
The third component provides an extended period to comply with the examination requirement for those persons permissibly operating under the rules in existence prior to this revision, but who do not qualify for an examination waiver. Individuals falling under this section will have until December 2, 2021 to complete their examination requirements.
Registration
For initial registration, an IAR for an SEC registered investment adviser (“RIA”) will submit a Form U4 requesting RA registration in New York by August 31, 2021 and pay a $200 licensing fee through CRD. After initial registration, IARs must renew their registration annually, and make timely updating amendments through the year whenever material changes occur.
IARs must pass the Series 65 or the Series 7 and Series 66 within 2 years of registering in NY unless the IAR qualifies for a waiver. An IAR can receive a waiver if (1) they were already providing services for at least two years before February 1, 2021 and are not otherwise subject to any disqualifications that are identified in the new rules, or (2) they hold on of the following professional designations and request a waiver:
- Certified Financial Planner (CFP)
- Chartered Financial Consultant (ChFC)
- Personal Financial Specialist (PFS)
- Chartered Financial Analyst (CFA)
- Chartered Investment Counselor (CIC)
The State of New York issued guidance, which includes links to the proposed and final rules and useful instructions to assist firms and their IARs in implementing the new registration requirement. You can also send an email to [email protected] with your name and CRD number in the header to receive an automatic acknowledgement email response regarding your examination waivers.
If you have any questions regarding the change to New York IAR registration and how it applies to you and your team, please contact us. MasterCompliance provides expert consulting, outsourcing, and implementation tools in planning and budgeting your firm’s compliance responsibilities. Find out if there are any areas where you would like to explore additional assistance or services.