Registration and Post-Registration

This section covers IAR registration requirements, qualification exams, de minimis exemptions, Form U4 amendments, books and records, continuing education, and supervision of IARs.

Where Do IARs Register?

IARs always register with states, never with the SEC. Even if the employing IA is federally registered (SEC-registered), the IAR registers at the state level.

• How: File Form U4 (Uniform Application for Securities Industry Registration or Transfer) through the IARD (Investment Adviser Registration Depository) system
• The investment adviser firm (not the individual IAR) submits the Form U4 on behalf of the IAR

Which State Has Registration Authority?

An IAR registers in every state where the IAR personally has a place of business, whether the employing adviser is state-registered or federal covered.

Federal law preempts states from requiring a federal covered adviser itself to register. But it carves out an exception for that adviser's IARs: a state can still license, register, or qualify them, based on the IAR's own place of business.

Exam Tip: Gotchas

• SEC registration of the adviser does not carry over to the IAR. States cannot require the federal covered adviser itself to register; that piece is preempted. But states keep full registration authority over that adviser's IARs, triggered by the IAR's own place of business, not just antifraud jurisdiction. Antifraud jurisdiction over the adviser itself is a separate, broader carve-out; the IAR registration carve-out is narrower and tied specifically to place of business.

What Exam Do IARs Need to Pass?

To register as an IAR, an individual must pass a qualifying examination:

• Exam reciprocity: an individual who has been registered as an IAR in any state within the two years before filing the application is not required to retake the qualifying examinations

Which Designations Waive the Exam?

Five designations waive the Series 65 exam requirement:

• CFA: Chartered Financial Analyst
• CFP: Certified Financial Planner
• ChFC: Chartered Financial Consultant
• PFS: Personal Financial Specialist
• CIMA: Certified Investment Management Analyst

Key rules for designation waivers:

• The designation must be currently held and in good standing to qualify for the waiver
• The waiver applies only to the Series 65 exam requirement, not to state registration itself
• The IAR must still file Form U4, pass a background check, and pay state fees

Exam Tip: Gotchas

• A qualifying designation waives only the exam, not the registration. If the designation lapses, the waiver is no longer valid, and the individual must meet another qualifying exam route.
• The list is five, not six, and CIC is not on it. NASAA replaced CIC (Chartered Investment Counselor) with CIMA in May 2024, and the CIC program was discontinued in 2025. Older prep books and some state rules that have not yet conformed still list CIC. If an answer choice offers CIC, it is not a qualifying designation under the model rule.

What Activities Require Registration?

The following activities require IAR registration:

• Making investment recommendations to clients
• Managing client accounts or portfolios
• Determining which advice should be given to specific clients
• Soliciting or selling investment advisory services
• Supervising persons who perform any of the above

Who Is Excluded from Registration?

The following individuals are NOT required to register as IARs:

• Clerical and ministerial personnel who do not perform advisory functions
• Under the federal IAR definition: supervised persons of federal covered advisers who do not regularly solicit, meet with, or communicate with clients
• Persons providing only impersonal investment advice (e.g., written publications of general circulation not tailored to individual clients)

What Is the De Minimis Exemption?

An IAR who does not have a place of business in a state may be exempt from registration in that state if the IAR has fewer than 6 clients who are residents of that state during the preceding 12-month period.

Key points:

• Institutional clients generally do not count toward the client threshold
• The exemption requires both conditions: (1) no place of business in the state AND (2) fewer than 6 resident clients
• Having even one office in the state (including a satellite or part-time office where the IAR operates) eliminates the exemption regardless of client count

Exam Tip: Gotchas

• The de minimis exemption has two requirements that must both be met. Having a place of business in a state means you must register there even if you have only 1 client.

What Happens After Registration?

When Must Form U4 Be Amended?

IARs have a continuing obligation to amend Form U4 whenever disclosed information changes.

Reportable events that require prompt Form U4 amendment:

The NASAA model rule that governs IAR Form U4 amendments sets a single 30-day standard for every reportable event. There is no shorter deadline for any category, including a disqualifying conviction or regulatory bar. (A 10-day carve-out does exist, but only under FINRA's rules for broker-dealer agents, a different population registering with a different regulator; do not apply it to IARs.)

Important disclosure rules:

• All felonies must be disclosed (no time limit)
• Certain misdemeanors must be disclosed (no time limit), and the category is broader than "securities-related": investment-related business, fraud, wrongful taking of property, bribery, perjury, forgery, counterfeiting, extortion, or a conspiracy to commit any of these (see Gotchas below)
• Disclosure is required for charges, not just convictions
• Filing misleading information or omitting material facts on Form U4 can result in denial, suspension, or revocation of registration

Exam Tip: Gotchas

• Form U4 requires disclosure of criminal charges, not just convictions. An IAR charged with a felony must disclose it, even before trial. That amendment is due within 30 days, like every other reportable event; there is no shorter deadline for IARs, not even for a disqualifying conviction or regulatory bar.
• A felony later reduced to a misdemeanor or dismissed must still be reported as originally charged.
• Don't confuse the felony/misdemeanor "no time limit" rule with the 10-year windows elsewhere on Form U4 (bankruptcies and other financial disclosures, for example). Criminal disclosure has no look-back period at all: it is reportable no matter how long ago it happened. The 10-year window is a different rule for a different category of event.
• The reportable misdemeanor category is not limited to securities offenses. It also reaches fraud, wrongful taking of property (including plain theft), bribery, perjury, forgery, counterfeiting, and extortion.

What Records Must Be Maintained?

Investment advisers must maintain books and records related to their IARs' activities.

Required records include:

• Client communications (emails, letters, advertising materials)
• Trade records and account documentation
• Advisory contracts and written agreements
• Financial planning documents provided to clients
• Evidence of supervisory reviews

Records must generally be maintained for 5 years in an easily accessible place, with the first 2 years specifically kept at the adviser's principal office.

How Do IARs Maintain Their Registration?

IARs must maintain their registration by:

• Keeping Form U4 current with prompt amendments
• Completing applicable continuing education requirements
• Paying annual registration renewal fees
• Remaining associated with a registered investment adviser

What Happens When an IAR's Employment Ends?

Two things happen, and they come from two different rulebooks.

What the Uniform Securities Act itself requires: when an IAR begins or ends employment with an investment adviser, notice must go promptly to the Administrator. For an IAR of a state-registered adviser, the firm gives that notice; for an IAR of a federal covered adviser, the IAR does. The Act sets no day count. It just says promptly.

What the filing system adds: in practice that notice is given on Form U5 (Uniform Termination Notice for Securities Industry Registration), filed by the IA firm (not the IAR) through the IARD system, generally within 30 days of the termination date. Form U5 and its 30-day deadline are creatures of the CRD/IARD forms and FINRA's rules, not of the Uniform Securities Act.

• Form U5 discloses the reason for termination (for example, voluntary resignation, discharge, or permitted to resign) and whether the termination is related to violations of investment-related laws, failure to supervise, fraud, or customer complaints
• "Permitted to resign" is its own disclosure category, distinct from a clean voluntary resignation
• If the IA firm fails to file Form U5, the IAR may notify the Administrator directly
• The IAR may add a comment to the Form U5 if the IAR disagrees with the firm's characterization of the termination
• The filing remains part of the IAR's permanent registration record, even after the IAR becomes associated with a new firm

Exam Tip: Gotchas

• The IAR never files their own Form U5. Only the employing IA firm can file it. If the firm fails to, the IAR's recourse is to notify the Administrator directly, not to file a substitute Form U5.
• A Form U5 termination filing doesn't disappear when the IAR moves to a new firm. It stays part of the IAR's registration history for regulators to review.
• Know which rulebook the question is asking about. The Act says "promptly" and names no form. The 30-day Form U5 deadline comes from the filing system, not the Act. If a question asks what the Uniform Securities Act requires on termination, the answer is prompt notice, not 30 days.

What Are the CE Requirements?

The NASAA IAR Continuing Education (CE) Model Rule establishes CE requirements for IARs. States must individually adopt the model rule for it to apply to IARs in that state.

How Many CE Credits Are Required?

• 1 credit = at least 50 minutes of educational instruction
• Reporting period = 12-month calendar year (January 1 - December 31)
• CE must be completed through an Authorized Provider

How Can Other CE Satisfy the Requirement?

What Happens If CE Isn't Completed?

• IAR who fails to complete CE by end of reporting period renews as "CE Inactive"
• CE Inactive status: the registration still renews, so the IAR may continue conducting advisory business while completing the missing CE
• IAR who remains CE Inactive at the close of the next calendar year is not eligible for registration or renewal
• No carry-forward: excess credits in one period cannot be applied to a subsequent period

What CE Is Owed After a Registration Lapse?

• An IAR who was previously registered and became unregistered must complete CE for all reporting periods between de-registration and re-registration
• Exception: the IAR can satisfy this by retaking and passing the qualifying exam (e.g., Series 65) instead of completing back CE

Exam Tip: Gotchas

• CE credits do NOT carry forward. Completing 18 credits in one year does not reduce the 12-credit requirement for the following year.
• An IAR who lets their registration lapse must either complete all missed CE or retake the qualifying exam.
• FINRA dual registrants get a partial exemption. FINRA CE counts for Products and Practice only, not Ethics and Professional Responsibility.

Who Supervises IARs?

The investment adviser firm is responsible for supervising its IARs. Supervision requirements include:

• Establishing and enforcing written supervisory procedures
• Designating a supervisor responsible for each IAR's activities
• Conducting periodic reviews of client accounts handled by IARs
• Reviewing and approving advertising and client communications
• Monitoring for conflicts of interest and suitability of recommendations

The IA firm is liable for the acts of its IARs performed within the scope of employment or authority. A firm that fails to reasonably supervise an IAR can face administrative sanctions, including censure, fine, suspension, or revocation of registration.

Exam Tip: Gotchas

• Supervision is the investment adviser firm's responsibility, not the IAR's. The exam may test whether the firm or the individual is liable for supervisory failures. The firm cannot escape liability by claiming it delegated supervision to someone who failed to perform it.

What Should You Check on Exam Day?

• IARs register only at the state level, by Form U4 through the IARD, filed by the IA firm, in every state where the IAR has a place of business, even when the employing adviser is SEC-registered.
• Know the exam paths: Series 65 standalone, or Series 66 plus Series 7 plus the SIE, and that five designations (CFA, CFP, ChFC, PFS, CIMA) waive only the exam, not registration itself. CIC is no longer a qualifying designation.
• The de minimis exemption requires both no place of business in the state and fewer than 6 resident clients in the preceding 12 months.
• Form U4 amendments are due within 30 days for every reportable event, with no shorter deadline for any category; all felonies and a broader-than-"securities-related" list of misdemeanors (investment-related business, fraud, wrongful taking of property, bribery, perjury, forgery, counterfeiting, extortion, or conspiracy) must be disclosed with no time limit, and disclosure is required for charges, not just convictions.
• On termination, the Act itself requires only prompt notice to the Administrator, given by the firm for a state-registered adviser's IAR and by the IAR for a federal covered adviser's IAR. The 30-day Form U5 filed by the firm is the filing system's rule, not the Act's; the IAR never files their own U5 but can notify the Administrator directly if the firm fails to.
• Books and records must generally be kept 5 years in an easily accessible place, with the first 2 years specifically at the adviser's principal office.
• CE is 12 credits per year: 6 ethics and professional responsibility (at least 3 ethics-specific) plus 6 products and practice, with no credit carry-forward between periods.