IAR Registration Procedure
With the registration requirements established, this section covers the mechanics of how an investment adviser representative (IAR) actually registers: what form to file, what disclosures are required, and when the registration becomes effective.
Form U4: The Registration Application
An IAR registers by filing Form U4 (Uniform Application for Securities Industry Registration or Transfer) through the IARD (Investment Adviser Registration Depository) system.
Key procedural points:
- Form U4 is filed by the investment adviser firm on behalf of the IAR (the IAR does not file directly)
- The same Form U4 is used for both IAR registration and broker-dealer agent registration, but IARs file through the IARD system while agents file through the CRD (Central Registration Depository) system
- Each disclosure item triggers a Disclosure Reporting Page (DRP) requiring a detailed narrative explanation
Form U4 Disclosure Categories
Form U4 requires extensive disclosure across seven categories:
| Disclosure Category | Details |
|---|---|
| Personal information | Name, address, date of birth, Social Security Number |
| Employment history | Complete employment history for the past 10 years |
| Criminal history | Any felony charges or convictions; misdemeanor charges or convictions involving securities, investments, fraud, theft, wrongful taking of property, or bribery |
| Regulatory actions | Any actions by a securities regulator, self-regulatory organization (SRO), or commodities regulator (denial, suspension, revocation, bar) |
| Civil judicial actions | Injunctions related to investment-related activities |
| Customer complaints | Written complaints involving allegations of sales practice violations, and any settlements or arbitration awards |
| Financial disclosures | Unsatisfied judgments or liens; bankruptcies; bond denials or revocations; compromises with creditors |
Note that an IAR must disclose criminal charges, not just convictions. The obligation arises at the charge stage, before any finding of guilt.
Consent to Service of Process
Every IAR applicant must file a consent to service of process together with the registration application. This document:
- Appoints the state Administrator as the IAR's legal agent for receiving service of legal process (lawsuits, subpoenas, and other legal documents)
- Is a one-time filing that does not need to be renewed annually
- Is irrevocable and cannot be withdrawn or canceled
- Remains effective even after registration terminates. A former IAR can still be served through the Administrator.
Exam Tip: Gotchas
- The consent to service of process survives termination of registration. Even if an IAR leaves the industry entirely, legal process can still be served on the former IAR through the Administrator. This prevents people from dodging lawsuits by dropping their registration.
Effective Date of Registration
Registration does not become "effective" instantly:
- If no denial order is in effect and no proceeding is pending, registration becomes effective at noon on the 30th day after a complete application is filed
- The Administrator may by rule or order specify an earlier effective date
- The Administrator may by order defer the effective date until noon of the 30th day after the filing of any amendment
- The Administrator does NOT "approve" registrations. The correct terminology is that registration becomes "effective."
Exam Tip: Gotchas
- Registration is never "approved" by the Administrator. It becomes "effective." This is a terminology trap on the exam. The Administrator can deny registration, but absent a denial, the registration simply becomes effective by operation of law on the 30th day.
Automatic Registration of Partners, Officers, and Directors
Registration of an investment adviser automatically constitutes registration of any IAR who is a partner, officer, or director (or a person occupying a similar status or performing similar functions):
- These individuals do not need to file a separate IAR registration
- The investment adviser's (IA's) registration covers them automatically
- This automatic registration applies only to partners, officers, and directors. Other employees who perform IAR functions must file their own Form U4.
Registration Fees and Annual Renewal
- Every IAR applicant must pay a registration fee as required by the Administrator (fee amounts vary by state)
- Every IAR registration expires on December 31 of each year unless renewed
- Renewal requires filing a renewal application and paying applicable fees
- Registration remains effective while a timely renewal application is pending