In late 2020, the North American Securities Administrators Association (NASAA) announced the adoption of a model rule pertaining to continuing education (CE) requirements for investment advisor representatives, or IARs. I recently sat down with my colleague Joe Antonakakis to discuss CE requirements.
He explained that the model rule implements a products and practices component as well as an ethics component. As of Aug. 12, 2022, three states have adopted CE rules based on the NASAA model rule that must be followed by the end of 2022: Maryland, Mississippi and Vermont.
In addition, CE rules in Arkansas, Kentucky, Michigan, Oklahoma, Washington D.C., and Wisconsin become effective on Jan. 1, 2023. Nevada and Rhode Island are finishing up rules that, if established in 2022, could also become effective by Jan. 1.
The Requirements
The exact CE requirements may vary from state to state. Most jurisdictions require at least 12 CE credits per year: six credits of IAR regulatory and ethics content, and six credits of IAR products and practice content.
The course must be offered by a provider who is authorized to provide CE courses in the particular jurisdiction.
Applicability
IAR CE requirements are generally applicable to IARs of both SEC- and state-registered investment advisors. NASAA is made up of representatives from each of the 50 states. It has no jurisdiction over SEC investment advisors. Although it is a voluntary organization with no specific jurisdiction, NASAA does have material influence with state securities bureaus.
Given that investment advisor representatives are governed on the state level, if/when states adopt continuing education requirements per NASAA recommendations, all such individuals — regardless of whether they are associated with an SEC or state registered investment advisor — would most likely be required to comply with the state's continuing education requirements.
