Post-Registration Obligations

Registration is a starting point, not a finish line. The USA and the NASAA Model Rule on IAR registration both impose ongoing duties that continue for as long as the IAR stays registered.

Who Must Keep Form U4 Current?

Under the NASAA Registration Requirements for Investment Adviser Representatives Model Rule, the IAR is under a continuing obligation to update the information Form U4 requires as changes occur. Unlike the agent's version of this duty (where the USA sets no day count and FINRA supplies one), the IAR's 30-day standard comes directly from the adopted NASAA Model Rule:

• Both the IAR and the investment adviser must file amendments to the IAR's Form U4 promptly with IARD
• An amendment is considered promptly filed if filed within 30 days of the event requiring it
• An initial or renewal application is not considered filed for registration purposes until the Administrator has received the required fee and all required submissions

Exam Tip: Gotchas

The 30-day "prompt" standard for IARs comes straight from the NASAA Model Rule, not from a FINRA gloss. Contrast this with agents, where the USA itself only says "promptly" and FINRA's own rules supply the 30-day (or 10-day, for statutory disqualifications) number. For IARs, NASAA wrote the 30-day standard directly into the registration model rule.

What Triggers a Correcting Amendment?

Separately from the Form U4 update duty, the USA requires that if information in any document filed with the Administrator becomes inaccurate or incomplete in any material respect, the registrant must file a correcting amendment promptly. Events that commonly trigger this include:

• Criminal charges or convictions (charges alone trigger it; a conviction is not required)
• New regulatory actions (denial, suspension, revocation)
• Written customer complaints involving sales-practice allegations, even ones the IAR believes are meritless
• Civil judicial actions (injunctions)
• Financial disclosures (bankruptcy, judgment, lien)
• Change of address or change of name

For a registrant, the correcting amendment is due promptly. For a federal covered adviser, the amendment is instead due whenever it is required to be filed with the SEC, not on a separate state clock.

What Recordkeeping and Examination Duties Apply?

Every registered investment adviser must make and keep the accounts, correspondence, memoranda, papers, books, and other records the Administrator prescribes by rule or order, for the period the Administrator sets. This recordkeeping duty is the IA firm's statutory obligation.

In practice, the records an IAR generates in the course of advisory work are part of what the IA must maintain, and all such records are subject to examination by the Administrator at any time.

Exam Tip: Gotchas

The recordkeeping duty under the USA runs to the investment adviser, not to the IAR individually. An exam question that asks who is statutorily obligated to keep the firm's books and records should point to the IA, even though the IAR's day-to-day work produces many of those records.

What Should You Check on Exam Day?

• The IAR's Form U4 update duty is continuing, and both the IAR and the IA share responsibility for filing amendments
• "Promptly" for an IAR's Form U4 amendment means within 30 days, a standard NASAA wrote directly into the Model Rule
• A registration application is not "filed" until the fee and all required submissions arrive
• A correcting amendment is owed whenever any filed document becomes materially inaccurate, including a mere criminal charge, not just a conviction
• The statutory recordkeeping and examination-cooperation duties attach to the investment adviser, not the individual IAR