NASAA Series 63Regulation of Investment Advisers and IARsMedium
An investment adviser representative (IAR) for a state-registered firm has recently moved from State A to State B. The IAR has no clients in State B and anticipates acquiring clients there within 60 days. The IAR's firm has a place of business in State B. What is the IAR's obligation regarding registration in State B?
- AThe IAR must register in State B within 10 days of establishing a place of business or soliciting clients.
- BThe IAR must file a notice with the Administrator of State B, but full registration is not required.
- CThe IAR must immediately register in State B upon establishing residency.
- DThe IAR is exempt from registration in State B as long as they have no clients there.
Show answer & explanationAnswer & explanation
Correct answer: A. The IAR must register in State B within 10 days of establishing a place of business or soliciting clients.
Under the Uniform Securities Act, an IAR must register in any state where they have a place of business or where they solicit clients. If an IAR moves to a new state and plans to establish a place of business or solicit clients, a 10-day grace period is often granted for registration.
Why the other options are wrong
- B. IARs must register, not just file a notice, if they have a place of business or solicit clients.
- C. Immediate registration is not typically required; a grace period usually applies.
- D. Having a place of business in a state, even without clients, triggers registration requirements for an IAR.
IAR Registration Grace Period
An Investment Adviser Representative (IAR) often has a short grace period (e.g., 10 days) to register in a new state if they establish a place of business or begin soliciting clients there.
- Applies when an IAR moves or changes their primary state of business.
- Triggered by establishing a place of business or actively soliciting clients.
- Purpose is to allow for administrative processing while maintaining continuity.
Memory trick: An IAR moving into a new state needs to register, but gets a small grace period to settle in before the 'clock' stops ticking.