Compliance Solutions for Investment Advisers

NASAA Coordinated Review Program

The North American Securities Administration Association (“NASAA”) recently announced a Coordinated Review Program (the “Program”) to assist investment advisers with the switch from federal to state registration.  Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, most investment advisers that are currently registered with the U.S. Securities and Exchange Commission (“SEC”) and have less than $100 million in assets under management must switch their registration from the SEC to the applicable state securities authorities.

In order to assist investment advisers with this process, NASAA is offering a coordinated investment adviser registration review program designed to coordinate the review of registration materials of advisers registering in multiple states.  According to the notice sent by NASAA, the Program was “designed to facilitate and streamline the review process for both the advisers and the states.”  The program is available to investment advisers that have to register in four or more states.  (Investment advisers that would be required to register in fifteen or more states are eligible to remain registered with the SEC.)

The Program is managed by a NASAA program manager responsible for coordinating the states’ reviews of the investment adviser’s application for registration. The program manager acts as a facilitator and will not be reviewing investment adviser registration materials or discussing registration issues with applicants.  If your investment adviser qualifies for this Program, you should submit all forms (e.g., your Form ADV, your financial statements, sample client contracts), which can vary from state to state, and the fees required by the states that you are required to register in.   You can then enroll in the Program by completing the enrollment form, which is available here.

After receiving the Investment Adviser Coordinated Review Form, the NASAA program manager notifies the appropriate states of the investment adviser’s election to participate in the program.  The program manager will then coordinate the review of the investment adviser’s registration materials with the states in which the investment adviser has filed a registration application.  Neither NASAA nor the program manager has the authority to approve an application. NASAA and the program manager are acting solely as facilitators to streamline the resolution of deficiencies in the core areas of the application. The states will review the registration materials and will discuss internally any deficiencies. The regulators in each state where the investment adviser has applied for registration will notify the investment adviser of any deficiencies in the registration materials.  If there are no deficiencies or upon resolution of any deficiencies, each state in which an application for registration is submitted will approve the application and will notify the investment advisor of its approval using the IARD system.

 

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