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New Rules for New York

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Come January, it will be easier for investment advisors in New York to participate in the Investment Advisor Registration Depository (IARD). New York passed a law the week of Nov. 4 that requires the registration or notice filing of investment advisors with at least six New York clients (exclusive of financial institutions and institutional buyers). The prior law allowed an advisor to have up to 40 New York clients without New York registration.

Karen Barr, general counsel for the Investment Counsel Association of America (ICAA) in Washington, D.C., says the new regulation will help “facilitate easy use of the IARD” for advisors in New York. The prior New York law allowing advisors to have 40 clients without registration “was not uniform with other state laws, and it was very difficult for [advisors] to properly participate in the IARD because they had different requirements–a separate [amendment] fee that had to be paid manually, a different renewal date, as well as a separate and different de minimus triggering requirement,” Barr says.

When the new rule becomes effective in January, advisors in New York won’t have to submit a separate $25 fee to amend Form ADV, the electronic form the Securities and Exchange Commission requires advisors to use when registering as an investment advisor or when amending a registration. Prior to the new rule, “there was no way an advisor could do everything online in New York the way [advisors] could in other states,” Barr says.

Ian Quan-Soon, a planner with IQ Financial Services, Inc. in New York, welcomes the new rule, and says it helps “make the advisory role more professional, and allows clients access to information they previously wouldn’t have had.” And, he says, it will be easier for advisors to access the Form ADV online. New York’s state registration is “very cumbersome,” he says, because advisors have to manually fill out nearly 80 pages of paperwork. “It’s been so cumbersome they realize an online filing would be much easier. Next year [advisors will] be able to do an electronic filing.”

Investment advisors exempt from federal registration because they have fewer than 15 clients and do not consider themselves to be primarily investment advisors will continue to be exempt from registering in New York.


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