States move to register investment adviser representatives online starting March 18

WASHINGTON (March 11, 2002) – Beginning March 18, investment adviser representatives will be able to register with regulators online, saving both time and money by eliminating paper filings.

Online filings will become part of the Investment Adviser Registration Depository (IARD) program, developed jointly by the North American Securities Administrators Association (NASAA)¹ and the Securities and Exchange Commission. The IARD system was built and is operated and maintained by the National Association of Securities Dealers, Inc.

The 1996 National Securities Markets Improvement Act established regulatory jurisdiction for the investment adviser industry. Under the Act, the SEC registers investment adviser firms with over $25 million in assets under management; the states register investment adviser firms with under $25 million in assets under management. States also register investment adviser representatives.

When the IARD system was initially released in January 2001, it allowed both federal and state registered investment adviser firms to make necessary filings online with the SEC and the states. To date, 12,000 investment adviser firms have filed their registration documents on the IARD system

Beginning March 18, firms that have filed on the IARD system will be able to transition their representatives’ registrations and register new representatives through the IARD system. Regulators and the investment adviser industry will benefit from the IARD system because of the significant cost and time savings from the elimination of paper filings. Investors will benefit from having easier access to information on investment adviser firms and their representatives.

Investment adviser firms can learn how to transition their representatives onto the IARD system by reading the IARD users manual at www.iard.com. Most states will allow firms to register their representatives on the IARD system². Firms should also consult the updated state mandating chart (see link below) to assure that they are in compliance with state laws. Over half of the states currently require firms to file via the IARD system, and by the end of 2002 an estimated 41 states will require that firms file through the IARD system. Most states that require investment adviser firms to file via the IARD system also will require those firms’ representatives registered in that state to file via the IARD system before September.

###

¹ NASAA, the oldest international organization devoted to investor protection, was organized in 1919. It is a voluntary association with a membership consisting of the 66 state, provincial and territorial securities administrators in the 50 states, the District of Columbia, Canada, Mexico and Puerto Rico. In the U.S., NASAA is the national voice of the 50 state securities agencies responsible for investor protection and the efficient functioning of the capital markets at the grassroots level.

²Ohio plans to begin using IARD for representative registration in 2003 and South Carolina is waiting on a legislative amendment before it uses IARD to register representatives. Also, with the launch of the IAR online licensing system, New Jersey and Maine have new regulations in place that will require investment adviser representatives to register.

2002 Headlines, Newsroom