New York State Imposes New Registration and Examination Requirements for Certain Investment Adviser-Related Individuals and Intermediaries
2024-09-24 11:37:45
Effective February 1, 2021, amendments to the New York Investment Advisers Act ("Amendments") require certain individuals associated with investment advisers to meet new registration and examination requirements. The Amendments primarily affect the following three categories of individuals:
For New York State-registered investment advisers ("New York State Advisers"): The Amendments apply to their representatives ("NY IARs"), principals, and supervisors. An NY IAR is an individual who engages in activities that constitute investment advisory services under New York law on behalf of a New York State Adviser. A "principal" is an individual or entity that directly or indirectly controls a New York State Adviser. A "supervisor" is an individual who directly supervises one or more NY IARs.
For SEC-registered investment advisers ("SEC Advisers"): The Amendments apply to their representatives ("Federal IARs") only if the Federal IARs conduct activities on behalf of the SEC Adviser within New York State and meet the definition of an investment adviser representative under the Investment Advisers Act of 1940.
For intermediaries: If these intermediaries are required to register as investment advisers in New York State, the Amendments apply to their representatives, principals, and supervisors. An "intermediary" refers to an individual or entity that primarily receives compensation for introducing potential investors or investors to New York State Advisers or SEC Advisers as their main business.
The registration of the above individuals in New York must be completed by submitting Form U4 through the online Investment Adviser Registration Depository (IARD) system and paying a $200 application fee. They must also meet the examination requirements by passing either (i) the Series 65 exam, or (ii) the Securities Industry Essentials (SIE) exam, Series 7 exam, and Series 66 exam.
Individuals who have been engaged in investment advisory activities in New York for at least two years prior to the effective date of the Amendments, are registered in another state, or hold specific certifications may apply for exemptions from certain requirements.