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The low down on investment advisor state registration

The North American Securities Administrators Association (NASAA) has launched an online resource at to help investment advisors switch from federal to state regulation. According to the Dodd-Frank Wall Street Reform and Consumer Protection Act, investment advisors with assets under management of between $25 million and $100 million must switch from federal to state authority by mid-2012. NASAA says there are about 3,200 advisors making the switch.

Under the new law, investment advisors currently registered with the Securities and Exchange Commission have already notified the agency of their eligibility to remain registered by March 30. Advisors that are no longer eligible must switch to state registration by June 28.


Among the online resources are:

• Registration requirements for each jurisdiction

• Regulatory contacts for each jurisdiction

• Guidance on which advisors will switch and which won’t

• Due dates for switching

• Access to local training seminars on the switching process

• A switch process FAQ

NASAA claims that switching to state registration should not interfere with an advisor’s daily business operations. However, advisors new to state regulation may experience more frequent and more thorough examinations than they may have had under national oversight. 

“Investment advisers and their counsel should consult the laws and rules in each state to verify the accuracy of the information,” cautions Jack E. Herstein, NASAA president and assistant director of the Nebraska Department of Banking and Finance Bureau of Securities. 

Mid-sized investment advisors may also wish to consult the FAQ published by RIA Compliance Consultants (www.ria-compliance-

Source: National Ethics Association,



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