The Investor Protection Bureau of the State of New York’s Office of Attorney General recently issued new guidance clarifying the state’s new process for registering investment adviser representatives (“IARs”). This guidance will be of particular interest to new and existing investment adviser representatives seeking registration in New York. Existing investment adviser representatives have until December 2, 2021 to comply with the registration requirement but must submit a Form U4 requesting investment adviser representative registration in New York on or before August 31, 2021.
New York Investment Advisor Firm & Investment Adviser Representative State Registration Requirements
Similar to other states, a firm seeking to register as a state registered investment advisor (“RIA”) in New York is required to file the Form ADV Part 1 and Part 2 along with any applicable schedule or appendix through the Investment Adviser Registration Depository (“IARD”) system and correspondingly pay in advance the registration fees via the IARD system. Additionally, a firm applying for state registration as an investment advisor in New York is required to send the miscellaneous documents identified below directly to the New York Protection Bureau. Here is a brief summary of certain requirements of an investment advisor firm registering in New York.
State of New York’s Registration Fees:
- Initial State Registration of Investment Advisor Firm: $200
- Renewal State Registration of Investment Advisor Firm: $200
- Investment Adviser Representative Registration: $200
- Renewal of Investment Adviser Representative Registration: $200
Forms and Information Required to Register:
- Investment Advisor Firm
- Coversheet
- Form ADV
- Income statement and balance sheet as of the close of its last fiscal or calendar year either audited by the investment advisor’s accountant or certified by management. Must be prepared according to GAAP (Generally Accepted Accounting Principles). Where the financial statements submitted are more than ninety (90) days old, an interim balance sheet no more than ninety (90) days old shall also be submitted. (Affix the following language to each financial statement: “I do hereby certify that this is a true and complete financial statement” followed by an authorized signature or attach a CPA’s Audit report.)
- Investment Adviser Representative (“IAR”)
- Effective February 1, 2021, the New York Attorney General’s Investor Protection Bureau requires the registration of investment adviser representatives (“IARs”) through the WebCRD/IARD system. Applicants must meet the state’s examination requirements (i.e., Series 65 or Series 7 and Series 66) or obtain an examination waiver.
- The exam requirements do not apply to any natural person who currently holds one of the following professional designations in good standing: CFP; ChFC; PFS; CFA; or CIC.
- Principals and supervisors of New York state-registered investment advisers must register as investment adviser representatives regardless of location if they supervise any investment adviser representative or solicitor that is required to register in New York. Principal means and includes every person or entity directly or indirectly controlling an investment adviser or solicitor.
Net Capital or Bonding Requirements
There is currently no net capital or bonding requirement for an investment advisor firm registered with the State of New York.
Custody Requirements
Investment advisers with custody or possession of securities or funds of any client must, in addition to the records requirements in 13 NYCRR §11.9(a)(1) – (13), keep the following records:
- Journal or other record showing all purchases, sales, receipts and deliveries of securities (including certificate numbers) for such accounts and all other debits and credits to such accounts;
- Separate ledger account for each client showing all purchases, sales, receipts and deliveries of securities, the date and price of each such purchase and sale, and all debits and credits;
- Copies of confirmations of all transactions effected by or for the account of any such client; and
- A record for each security in which any client has a position showing the name of each client having any interest in each security, the amount or interest of each such client, and the location of each security.
Additional Information
Investment Advisers FAQ | New York State Attorney General (ny.gov)
Investment advisers | New York State Attorney General (ny.gov)
Related Resources
New York Investment Adviser Representative Registration Requirement Now Effective
New York IAR Licensing – Updated Investment Adviser Compliance Manual Section
Registering as a State Investment Advisor
Frequently Asked Questions: Investment Advisor Registration
Frequently Asked Questions: Series 65 Examination
Frequently Asked Questions: Form U4
The information listed above regarding New York investment advisor registration is being provided for your convenience and is not intended as advice by RIA Compliance Consultants, Inc. Your use of or reliance upon this information does not create a consulting engagement with RIA Compliance Consultants.
Please understand that RIA Compliance Consultants does not guarantee the accuracy of the New York investment advisor registration requirements listed above. This information may not be current, and there may be additional New York investment advisor registration requirements which are not identified above. A prospective or existing New York registered investment advisor should review in detail the published investment advisor rules of New York Investor Protection Bureau.
The information on this website page is not intended to be an all-inclusive analysis of the state investment advisor registration requirements of New York. This website page is not intended as a substitute for and should not be considered the equivalent of consulting with investment advisor compliance professional.
New York Investment Adviser Related Posts
In light of the new investment adviser representative (“IAR”) licensing requirement of the State of New York, RIA Compliance Consultants has updated its sample compliance manual section for investment adviser representative licensing in New York.
New York IAR – Special CRD Exam Waiver Window Opens 02/27/2021
February 16, 2021
The State of New York recently announced a special exam waiver window on the Central Registration Depository (“CRD”) system, which will affect existing investment adviser representatives (“IARs”) seeking registration in New York via an exam waiver (in lieu of taking and passing the Series 65 or Series 66 & 7 examinations). IAR applicants requesting an exam waiver should apply between February 27, 2021 and August 31, 2021 in order to avoid opening an unnecessary exam window on the CRD system and being charged an examination fee. Between Feb. 27, 2021 and August 31, 2021, FINRA will temporarily modify the CRD system for NY only RA registration requests to allow the applicants who qualify for an exam waiver to avoid opening a window.
The State of New York’s new investment adviser representative (“IAR”) registration requirements are now effective. Prior February 1, 2021, New York remained the final state that did not require investment adviser representatives to be licensed with the state securities regulator by filing the Form U4. Adopted in December 2020, the rule changes now require the registration of investment adviser representatives – including principals, supervisors and solicitors for registered investment adviser firms – by filing the Form U4 via the WebCRD/IARD system. Registration is required for investment adviser representatives of New York state registered investment adviser firms, as well as for investment adviser representatives of SEC-registered investment adviser firms, if the investment adviser representative conducts advisory activities from a place of business in New York.
New York Adopts Investment Adviser Representative Registration Rule
December 07, 2020
In December 2020, the New York Attorney General’s Investor Protection Bureau (IPB) adopted proposed rule changes to 13 N.Y.C.R.R. Part 11. These rule changes require the registration of investment adviser representatives – including principals, supervisors and solicitors for registered investment advisers – through the WebCRD/IARD system beginning February 1, 2021. Prior to the rule change, New York was the only state that did not license investment adviser representatives via the WebCRD/IARD system. Click here to read the final adopted rule.
In April 2020, the New York Attorney General’s Investor Protection Bureau (IPB) proposed rule changes to 13 NYCRR Part 11. These rule changes would require the registration of investment adviser representatives through the IARD system. New York investment adviser representatives would be required to meet registration and exam requirements. Under the proposed rules, those who must be registered include individuals working for state or SEC-registered investment adviser firms. Currently, New York is the only state that does not license investment adviser representatives. The application for initial registration as an investment adviser representative would be made by completing the Form U4 and filing the form with the CRD/IARD. Click the following link to read the proposed rules in their entirety https://ag.ny.gov/sites/default/files/full-text-13nycrr11.pdf.
As your state registered investment adviser firm completes its Form ADV Annual Amendment, it’s important not to forget that many state securities regulators also require a state registered investment adviser firm to submit annual financial statements and/or other documents directly to the state securities regulator (outside of the IARD/CRD system).
Mid-Sized Investment Advisers Required to Register with the SEC Rather than New York Investor Protection Bureau
August 31, 2012
New York City houses one of the financial epicenters of the world so many may find it surprising that investment advisers with their principal office and place of business in New York are not subject to an examination by the New York Investor Protection Bureau. The New York Investor Protection Bureau is charged with enforcing the New York State securities laws and requires investment advisers to register with the New York Attorney General’s Office. Because the New York Investor Protection Bureau does not conduct examinations of investment advisers with a principal office and place of business who are registered with the New York Attorney General’s Office, the U.S. Securities and Exchange Commission (“SEC”) will handle the registration and examination of mid-sized investment advisers (investment advisers with between $25 million and $100 million of assets under management) with a principal office or place of business in New York.
