Post-Registration Obligations

Once an investment adviser representative (IAR) is registered, ongoing compliance obligations begin. These include keeping Form U4 current, maintaining records, and cooperating with regulatory examinations.

Obligation to Update Form U4

If the information in any document filed with the Administrator becomes inaccurate or incomplete in any material respect, the IAR must file a correcting amendment promptly. "Promptly" generally means within 30 days of the triggering event.

Events Requiring Form U4 Amendment

The following events trigger a mandatory update (all must be filed within 30 days):

  • Criminal charges or convictions
  • Regulatory actions (denial, suspension, revocation)
  • Customer complaints (written, involving sales practices)
  • Civil judicial actions (injunctions)
  • Financial disclosures (bankruptcy, judgment, lien)
  • Change of address (residential or business)
  • Change of name

Two key points:

  • An IAR must disclose criminal charges, not just convictions. The obligation arises when the charge is filed, not when a verdict is reached.
  • Customer complaints must be disclosed even if the IAR believes they are without merit. The IAR's opinion of the complaint's validity is irrelevant to the disclosure obligation.

Exam Tip: Gotchas

  • The disclosure trigger for criminal matters is the charge, not the conviction. An IAR who is charged with a securities-related misdemeanor must update Form U4 within 30 days of the charge, even if the case has not gone to trial and the IAR believes they will be acquitted.

Recordkeeping

Every registered investment adviser (IA), and by extension its IARs, must:

  • Make and keep such accounts, correspondence, memoranda, papers, books, and other records as the Administrator prescribes by rule or order
  • Preserve records for the period prescribed by the Administrator
  • Submit all records to examination by the Administrator at any time

The Administrator's examination authority is broad. There is no requirement for the Administrator to provide advance notice or justify the reason for an examination. Records must be available for inspection whenever the Administrator requests them.