SEC, NASAA Announce IARD System Fee Waiver

WASHINGTON, D.C. (October 7, 2005) —The U.S. Securities and Exchange Commission (SEC) and the North American Securities Administrators Association (NASAA) today announced a one-year waiver of certain system fees paid by investment advisers and all investment adviser representatives for registration in the Investment Adviser Registration Depository (IARD) program. Separately, NASAA also announced that it is reducing by 30 percent system fees paid by state-regulated investment advisers on an on-going basis.

The IARD system is an Internet-based national database sponsored by NASAA and the SEC and operated by NASD in its role as a vendor. IARD provides a single nationwide database for the collection and dissemination of information about individuals and firms in the investment advisory field; and offers investment advisers and representatives a single source for filing state and federal registration and disclosures. IARD system fees are used for user and system support along with periodic enhancements to the system.

“Since its inception, the IARD system has exceeded expectations,” said Patricia D. Struck, Wisconsin Securities Administrator and President of NASAA, the membership organization of securities administrators in the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, the provinces and territories of Canada, and Mexico. “The system provides streamlined registration procedures for investment advisers and their representatives, promotes consistency, and allows investors to research the employment and disciplinary histories of more than 21,000 investment adviser firms and eventually 200,000 individual investment adviser representatives. We are pleased that IARD’s success has allowed us to grant a waiver and reduction in the system fees.”

“This Internet resource has been invaluable to investors. It allows the investing public instant access, without additional charge, to information about their money managers.  Now there is even better news: we can, for the next year at least, eliminate the annual adviser fees that go with it,” said SEC Chairman Christopher Cox.

NASAA is waiving payment of IARD system renewal fees by state-regulated investment advisers and all investment adviser representatives. Currently, state-regulated investment adviser firms pay an annual system fee of $100 and individual representatives pay an annual system fee of $45. Struck also announced that the system fees paid by state-regulated investment advisers will be reduced by 30 percent to $70 on an on-going basis. Struck said NASAA’s Board of Directors approved the waiver and system fee reduction and will continue to monitor the system’s revenues to determine whether future fee adjustments are warranted.

The SEC has approved a waiver of IARD filing fees for all SEC-registered advisers with respect to Form ADV annual updating amendments filed from November 1, 2005 through October 31, 2006. Currently, SEC-registered adviser firms pay an annual IARD fee of $100, $400, or $550, depending on their assets under management. The SEC also announced that current projections of fee revenues and system expenses cause it to believe that a reduction in annual IARD filing fees will be necessary to more closely align those fees with the costs of filings. The SEC plans shortly to solicit public comment on potential IARD fee alternatives following the waiver period, including reductions in fees or an extension of the waiver.

Both SEC and NASAA observed that revenue from IARD system fees had exceeded original projections. Struck attributed the waiver and reduction in system fees primarily to the overwhelming support of the states in mandating the use of the system for registrants. More investment advisers and investment adviser representatives have registered through the system than originally anticipated, the regulators said. Numbers of SEC-registered advisers have also grown and many advisers have moved to higher fee categories because they have more assets under management.

For More Information:

John Nester (SEC)
(202) 551-4125

Bob Webster (NASAA)
(202)737-0900

2005 Headlines, Newsroom