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
• Be subject to investigation and discipline by the state administrator; routine, periodic books-and-records examinations apply to the registered broker-dealer or investment adviser firm, not directly to the individual IAR
• Promptly update Form U4 to reflect any material changes, including:
  • Address changes
  • Disciplinary events
  • Reportable customer complaints, arbitrations, or civil litigation (meeting Form U4's disclosure criteria, not every complaint)
  • 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 expires each year on December 31 unless renewed; it can also end earlier through withdrawal, revocation, or cancellation
• Renewal: Annual, by the December 31 expiration
• Failure to renew: Results in a lapse of registration; the IAR can no longer legally act in that capacity
• Withdrawal: The employing firm (broker-dealer or investment adviser) files Form U5 to terminate the IAR's registration
• An IAR whose registration lapses must re-register before conducting advisory activities
• The state administrator can revoke registration for cause, or suspend it, which temporarily disables the IAR's authority to act without terminating the registration itself

Exam Tip: Gotchas

• Registration automatically expires each December 31 unless renewed. It doesn't need to be actively withdrawn to lapse; non-renewal alone ends it.
• Suspension is temporary, not a termination. Unlike withdrawal, revocation, or cancellation, a suspended IAR's registration still exists; it is just inactive until the suspension is lifted.
• 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 credits of CE annually (a NASAA credit represents at least 50 minutes of instruction):
  • 6 credits of Products and Practices content
  • 6 credits 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-credit annual CE.
• CE does not waive the initial exam. Even if an IAR completes CE, they still need to pass the qualifying exam (Series 65 alone, or Series 66 plus the required Series 7 and SIE) to register.

State Administrator Authority Over IARs

The state administrator has broad authority over registered IARs:

• Investigate the IAR's activities individually (routine, periodic books-and-records examinations apply to the registered firm, not the individual IAR)
• 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.

What Should You Check on Exam Day?

• Can you state that registration expires each year on December 31 unless renewed?
• Do you know that "promptly" for a Form U4 update means without unreasonable delay, not just at the next renewal?
• Can you name the situations that end registration early (withdrawal, revocation, cancellation), and explain why suspension is different (temporary, not a termination)?
• Do you know that the employing firm, not the IAR, files Form U5 to terminate the IAR's registration?
• Do you know the 12-credit annual CE breakdown (6 Products and Practices, 6 Ethics and Professional Responsibility), and that it is not universally required across states?
• Can you explain why the state administrator retains authority over an IAR even when the IAR's employer is a federal covered adviser?