NASAA’s Proposed Amendments to its Model Rules on Investment Advisers and Investment Adviser Representatives

NASAA’s Investment Adviser Regulatory Policy and Review Project Group (“Project Group”) is soliciting comments from the public on a proposed set of investment adviser model rules written to reflect the organization and content of the 2002 Uniform Securities Act (“USA 2002”).  The Project Group is also seeking public comment on proposed revisions to the existing investment adviser model rules (“1956 Act Model Rules”) with respect to examination qualifications.  The proposed rules are in two groups.  The first group relates generally to investment advisers (“IA’s”) and investment adviser representatives (“IAR’s”), under the USA 2002.  The second group relates specifically to examination requirements for IA’s and IAR’s, under both the USA 2002 and the Uniform Securities Act of 1956, as amended (“1956 Act”).

The comment period begins on Friday, July 18, 2008, and will remain open for 21 days.  Accordingly, all comments should be submitted on or before Friday, August 8, 2008.  Comments should be directed by email or in writing to:

Kenneth Hojnacki
Wisconsin Dept. of Financial Institutions
Division of Securities
PO Box 1768
Madison, WI 53701-1768

with a copy to:

Stephen Hall
Deputy General Counsel
750 First Street, NE,  Suite 1140
Washington, DC  20002-4251

Background and Purpose of the Revised Model Rules
The Project Group has created model IA rules that comport with the USA 2002.  This new set of rules (“USA 2002 Model Rules”) will serve as a helpful template in those states where the USA 2002 has been, or will be, adopted.  At the same time, the existing model rules (the 1956 Act Model Rules), patterned after the 1956 Act, will continue to serve as an important guide in those states where the securities statute is based on the 1956 Act.  Having model rules organized around each of the uniform acts will assist the NASAA members in their rulemaking efforts, promote uniformity, and advance the cause of investor protection.

The new USA 2002 Model Rules represent primarily a reorganization of the existing rules.  They do contain some substantive changes, however, particularly in the area of qualification examinations.  All of the changes, both organizational and substantive, are highlighted in the Notice of Request for Public Comment.

With respect to examinations, the Project Group is also proposing that identical revisions be made to the 1956 Act Model Rules.  Examination requirements have undergone significant change over the years, even in states that have adopted a version of the 1956 Act.  Accordingly, to reflect that evolution, the 1956 Act Model Rules are also being updated with respect to examinations.  The Project Group anticipates that in the future, other revisions will be made to the 1956 Act Model Rules, so that they reflect all of the substantive changes now being proposed in the USA 2002 Model Rules.


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Issues & Advocacy, NASAA Proposals, Regulatory Activity, Request for Comment