More On Legal & Compliancefrom The Advisor's Professional Library
- Trading Practices and Errors When SEC-registered investment advisors conduct annual audits of firm policies and procedures, they should pay close attention to trading practices. Though usually not required to, state-registered advisors should look at their trading practices and revise policies that do not fully protect clients.
- The Need for Thorough and Effective Policies and Procedures Whethere an advisor is SEC or state-registered, RIAs must revise their policies and procedures to address significant compliance problems occurring during the year, changes in business arrangements, and regulatory developments.
The North American Securities Administrators Association announced Tuesday that it has developed a coordinated review program for investment advisors switching from federal to state oversight as mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Dodd-Frank requires investment advisors with assets under management of between $25 million and $100 million to switch from federal to state registration by mid-2012.
The Investment Adviser Coordinated Review Program is open to SEC-registered investment advisors switching their registration to between four and 14 states, NASAA says. Under Dodd-Frank, investment advisors registered in 15 or more states can remain with the SEC. The program will conclude on March 30, 2012.
“This initiative provides investment advisors registering in multiple states with an easier way to navigate the switch to state registration and gives states an opportunity to coordinate and resolve issues about potential problems with applicants,” said Jack Herstein (left), NASAA president and assistant director of the Nebraska Department of Banking and Finance Bureau of Securities, in a statement.
To participate in the program, eligible investment advisors must complete and submit the Coordinated Review Form found in the IA Switch Resource Center on the NASAA website in addition to filing all materials required by the states in which the advisor is applying for registration.
Herstein adds that there is no additional cost to use the program. “Advisors will be subject only to the filing fees specified by the states in which the investment advisor is applying for registration,” he said, noting that NASAA has waived IARD system fees for 2011 and 2012.
According to NASAA, “the states where the investment advisor has filed a registration application will conduct a coordinated review of the investment advisor’s registration materials.” After completion of the review, “the advisor will be informed of the deficiencies, if any, that must be resolved before the registration will be approved,” NASAA states.