Quick Answer
An IAR registers on Form U4, which the sponsoring investment adviser submits through IARD on the IAR's behalf, with a consent to service of process and a registration fee. Absent a denial order or pending proceeding, registration becomes effective at noon on the 30th day after a complete application is filed. Every IAR registration expires December 31 unless renewed.
An IAR registers using the same core mechanics as a broker-dealer agent (covered in the Agents chapter), with a few IAR-specific details on fees and renewal.
What Does the Application Require?
- Registration is filed on Form U4. Under the Uniform Securities Act (USA), the IAR is the applicant; in practice the investment adviser firm submits the U4 on the IAR's behalf through IARD. Often confused: CRD (Central Registration Depository) is the separate system a broker-dealer agent's own Form U4 goes through; an IAR's Form U4 goes through IARD, not CRD.
- The initial application must also include proof of compliance with the IAR examination requirement and the required fee, per the NASAA Registration Requirements for Investment Adviser Representatives Model Rule.
- The applicant files a consent to service of process, appointing the Administrator as agent to receive lawful process in a non-criminal suit, action, or proceeding that arises under the USA or its rules and orders after the consent is filed. It is a one-time, irrevocable filing that survives termination of registration.
- An application is not considered filed until the Administrator receives the required fee and all required submissions.
- The Administrator may by rule or order require an initial applicant to publish an announcement of the application in one or more specified in-state newspapers.
Form U4 itself calls for several categories of disclosure:
| 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 | Felony charges or convictions; misdemeanor charges or convictions involving securities, investments, fraud, theft, wrongful taking of property, or bribery |
| Regulatory actions | Denial, suspension, revocation, or bar by a securities regulator, SRO, or commodities regulator |
| Civil judicial actions | Injunctions related to investment-related activities |
| Customer complaints | Consumer complaints, settlements, arbitrations, and litigation that meet Form U4's specific allegation, status, amount, timing, and prior-reporting conditions |
| Financial disclosures | Unsatisfied judgments or liens, bankruptcies, bond denials or revocations, compromises with creditors |
| Termination disclosures | Voluntary resignation, discharge, or permitted resignation after allegations of investment-related violations, fraud or wrongful taking, or investment-related failure to supervise |
For reportable events, complete the applicable Disclosure Reporting Page (DRP) with the details the form requests.
Exam Tip: Gotchas
- The consent to service of process survives termination of registration. A former IAR can still be served through the Administrator.
When Does Registration Become Effective?
Absent a denial order or pending proceeding, 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, or by order defer effectiveness until noon on the 30th day after the filing of any amendment.
Effectiveness does not establish that the Administrator endorses the IAR's qualifications or that filed documents are true, complete, and not misleading.
Exam Tip: Gotchas
- Effective registration is not state endorsement. Do not represent to a prospective client that registration proves the Administrator has approved the IAR's qualifications.
Who Pays What, and When Does Registration Expire?
- Every applicant for initial or renewal IAR registration must pay a registration fee set by the Administrator; fee amounts vary by state.
- Every IAR registration expires December 31 of each year unless renewed. Renewal requires filing a renewal application through IARD and paying the applicable fee.
Does an IA's Own Registration Cover Anyone Else?
Registration of an investment adviser automatically constitutes registration of any IAR who is a partner, officer, or director of the firm (or a person occupying a similar status or performing similar functions). These individuals need no separate Form U4; other employees who perform IAR functions do.
Exam Tip: Gotchas
- Automatic registration is narrow. It covers only partners, officers, and directors of the IA, and persons occupying a similar status or performing similar functions. A financial planner or solicitor who holds no such position still needs a separate Form U4 registration, even though the firm itself is registered.
What Should You Check on Exam Day?
- Form U4, consent to service of process, and fees are the three components of the application
- An application is not "filed" for purposes of the effective-date clock until the fee and all submissions arrive
- Absent a denial order or pending proceeding, effectiveness is at noon on the 30th day after filing, subject to earlier-date or amendment-deferral orders; it is not state endorsement
- December 31 is the annual expiration date for every IAR registration
- Automatic registration through the IA's own filing reaches only partners, officers, directors, and persons in a similar status or function, not every IAR-performing employee