Post-Registration Requirements

With registration complete, Investment Adviser Representatives (IARs) face ongoing obligations. Staying registered requires continuous compliance; registration is not a one-time event.

Ongoing Compliance Obligations

Once registered, an IAR must:

• Comply with all state securities laws and regulations in every state where they are registered
• Submit to examination and inspection by the state administrator at any time
• Promptly update Form U4 to reflect any material changes, including:
  • Address changes
  • Disciplinary events
  • Customer complaints
  • Changes in employment or affiliation
  • Criminal charges or convictions
  • Financial disclosures (bankruptcies, judgments, liens)
• Maintain qualification through continuing education where required by the state

Exam Tip: Gotchas

• "Promptly" means without unreasonable delay. If an IAR receives a customer complaint or faces a disciplinary action, they cannot wait until the next annual renewal to disclose it. Material changes must be reported on Form U4 as soon as reasonably possible; typically within 30 days, depending on the state and the type of event.

Registration Duration and Renewal

• Duration: Registration remains effective until withdrawn, revoked, suspended, or cancelled
• Renewal: Typically annual; most states renew on a calendar-year basis
• Failure to renew: Results in a lapse of registration; the IAR can no longer legally act in that capacity
• Withdrawal: IAR or employer can file Form U5 to terminate registration
• An IAR whose registration lapses must re-register before conducting advisory activities
• The state administrator can revoke or suspend registration for cause (violations, fraud, etc.)

Exam Tip: Gotchas

• Registration does not expire on its own. It must be actively withdrawn, revoked, or allowed to lapse through non-renewal.
• Failing to update Form U4 promptly after a material event is itself a violation. The update obligation is ongoing, not just at renewal time.

Continuing Education

• NASAA Model Rule: The North American Securities Administrators Association (NASAA) adopted an IAR Continuing Education (CE) Model Rule requiring IARs to complete annual CE
• States that adopt the model rule require IARs to complete 12 hours of CE annually:
  • 6 hours of Products and Practices content
  • 6 hours of Ethics and Professional Responsibility content
• Not all states have adopted the CE requirement yet; it depends on the individual state
• CE does not replace the initial qualifying exam requirement

Exam Tip: Gotchas

• CE requirements vary by state. The NASAA model rule is not universally adopted, so not every state requires the 12-hour annual CE.
• CE does not waive the initial exam. Even if an IAR completes CE, they still need to pass the qualifying exam (Series 63, 65, or 66) to register.

State Administrator Authority Over IARs

The state administrator has broad authority over registered IARs:

• Examine and inspect the IAR's activities and records
• Require reports and other information
• Deny, suspend, or revoke registration for violations

Think of it this way: The state administrator regulates the IAR as an individual, regardless of which firm the IAR works for. Even if the IAR's employer is a federal covered adviser registered with the SEC, the state still has full authority over the IAR personally.

Exam Tip: Gotchas

• The state administrator can act against an IAR even if the IAR's employer is an SEC-registered adviser. Federal covered status of the firm does not shield the individual IAR from state oversight.
• Cease-and-desist orders can be issued without a hearing. The administrator can stop conduct first and hold a hearing afterward.