Whenever there is a material change to information that should be disclosed on the Form U4, the investment adviser representative has an obligation to update promptly that information. Typically, this means filing an amended Form U4 within 30 days of the material change. Failure to do so can lead to fines, suspensions, or even being barred from acting as an investment adviser representative.
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Do state securities regulators require an individual applying to register as an Investment Adviser Representative to submit a fingerprint card?
November 02, 2018
Although most state securities regulators do not require an investment adviser representative only applicant to submit fingerprint cards, the state securities regulators for Alaska, Arizona, District of Columbia, Georgia, Florida, Indiana, Maine and Ohio require fingerprint cards when registering as an investment adviser representative. In order to confirm whether a fingerprint card is required, an investment adviser representative applicant should review the most recent investment adviser representative registration requirements published by the applicable state securities regulator where he or she is requesting registration.
What information does an Investment Adviser Representative include on his or her Form U4?
November 02, 2018
The following is a list, not necessarily in order of the form, of information that needs to be provided by the investment adviser representative when completing a Form U4:
How does an Investment Adviser Representative submit a Form U4?
November 02, 2018
The Form U4 is submitted electronically to the state securities regulator by the investment advisor firm on behalf of the investment adviser representative through the investment advisor firm’s IARD/CRD account.
Are there state securities regulators that do not require filing a Form U4 for registration of an Investment Adviser Representative?
November 02, 2018
Yes, there are a few states such as New York and Wyoming that do not register individuals as investment adviser representatives and therefore do not require the filing of the Form U4. However, these state securities regulator may have an alternative requirements/filings related to minimum qualifications and designation of supervisors. For example, the New York Investor Protection Bureau requires an investment adviser representative of a state registered firm in New York to file the NY – IAQ. An investment advisor firm should consult the particular investment adviser representative rules of the securities regulator(s) in any state where the representative will conduct business.
When does an Investment Adviser Representative file an initial Form U4?
November 02, 2018
An individual seeking to register as an investment adviser representative with a state securities regulator will file an initial Form U4 via the IARD/Web CRD system. Typically, an individual does not submit his or her Form U4 until he or she has met the testing/designation prerequisite required by the state securities regulator. (An individual not currently registered with an investment advisor firm or broker-dealer will utilize the Form U10 online to open a Series 65 examination window; an individual currently registered with an investment advisor firm or broker-dealer will open the Series 65 examination window by submitting the Form U4.) In the event that the individual seeking to register as an investment adviser representative is also starting a state registered investment advisor firm, the Form U4 is often submitted at the same time the Form ADV and other registration documents are submitted to the state securities regulator since most state securities regulators require an investment advisor firm to have at least one individual registered as an investment adviser representative.
What is a Form U4?
November 02, 2018
The Form U4 is the Uniform Application for Securities Industry Registration or Transfer. Individuals seeking to register as an investment adviser representative (“IAR”) of a registered investment advisor firm typically must use this form to become registered with a state securities regulator. This document is filed electronically via the Central Registration Depository (“Web CRD”) system.
What are the recordkeeping requirements of an SEC registered investment adviser related to the SEC’s Code of Ethics rule?
November 02, 2018
With respect to the code of ethics, the SEC requires a SEC registered investment adviser to maintain the following documents:
Are there any specific requirements relating to violations of a SEC registered investment adviser’s code of ethics?
November 02, 2018
Pursuant to SEC Rule 204A-1, a SEC registered investment adviser’s code of ethics must require prompt internal reporting of any violations to the investment adviser’s code of ethics. Violations must be reported to the investment adviser’s chief compliance officer. However, an investment adviser’s code of ethics may require that violations be reported to another designated party if the designated party is then required to report it to the chief compliance officer. In order to promote the prompt reporting of code of ethics violations, an investment adviser must create an environment that encourages and protects any supervised persons that report a violation. An investment adviser must make sure that a supervised person feels safe and free to report violations without fear of retaliation. While SEC Rule 204A-1 does not require that the investment adviser impose certain fines or penalties, it is important that supervised persons of the investment adviser understand the emphasis that the investment adviser places on acting in an ethical manner and, therefore, many investment advisers choose to include some form of reference to disciplinary actions that may be taken if a violation occurs. An investment adviser must maintain a record of all violations of the code of ethics and the actions taken as a result of the violation.
Other than the requirements of the Rule, what else should be considered or included by an investment adviser when drafting a code of ethics?
November 02, 2018
The following are areas that should be considered when preparing a code of ethics for a registered investment adviser:
