Effective February 1, 2021, amendments to the New York Investment Advisory Act (the “Amendment”) require certain people associated with investment advisers to meet the new registration and examination requirements. The Amendment mostly affects the below three categories of people.
With respect to NY registered investment advisers (a “NY Registered Adviser”), the Amendment imposes the requirements on their representatives (a “NY IAR”), principals and supervisors. A NY IAR means an individual who represents a NY Registered Adviser in performing any acts that define an investment adviser under the New York Law. A “principal” means an individual or entity directly or indirectly controls a NY Registered Adviser. A “supervisor” means an individual who directly supervises one or more natural persons associated with a NY State Registered Adviser in their capacity as a NY IAR.
With respect to SEC-registered investment advisers (an “SEC Registered Adviser”), the Amendment only imposes the requirements on their representatives (a “Federal IAR”) if such Federal IARs represent an SEC Registered Adviser in New York and meet the definition of investment adviser representatives under the Investment Advisers Act of 1940.
With respect to solicitors, the Amendment imposes the requirements on their representatives, principals and supervisors if such solicitors are required to be registered in New York as an investment adviser. A “solicitor” includes an individual or entity “who as part of a regular business, engages in the business of providing investment advice to the limited extent that such person receives compensation for introducing a prospective investor or investors” to a NY Registered Adviser or an SEC Registered Adviser.
For people described above, they should register with New York by filing a Form U4 through the online Investment Adviser Registration Depository system and paying the $200 filing fee, and pass either (i) Series 65 examination, or (ii) a combination of the Securities Industry Essentials Examination, Series 7 examination and Series 66 examination.
Certain waivers are available for persons who have engaged in investment advisory activities in New York for at least two years prior to the effective date of the Amendment, have been registered in another jurisdiction or hold certain certifications.