Page 50 - Investment Advisor October 2022

COMPLIANCE COACH

By Thomas D. Giachetti

More States Adopt Advisor CE Requirements

While many jurisdictions have adopted rules similar to the NASAA model
rule, rules vary from state to state.

n late 2020, the North Amer- also registered as an agent of a FINRA
ican Securities Administrators member broker-dealer and who com-
IAssociation (NASAA) announced plies with FINRA’s CE requirements is
the adoption of a model rule pertaining considered in compliance with IAR CE
to continuing education (CE) require- requirements, as long as certain condi-
ments for investment advisor represen- tions are met for the IAR products and
tatives, or IARs. I recently sat down with practice requirement.
my colleague Joe Antonakakis to discuss Many states have published guidelines
CE requirements. to assist with determining whether an
He explained that the model rule imple- IAR has satisfied the CE requirements.
ments a products and practices compo- jurisdiction, NASAA does have material And in most jurisdictions, CE credits
nent as well as an ethics component. As influence with state securities bureaus. completed by an IAR who was awarded
of Aug. 12, 2022, three states have adopted Given that investment advisor rep- and holds a credential that qualifies for
CE rules based on the NASAA model rule resentatives are governed on the state an examination waiver (including CFP,
that must be followed by the end of 2022: level, if/when states adopt continuing ChFC, MSFS, CFA, PFS and CIC) satisfy
Maryland, Mississippi and Vermont. education requirements per NASAA rec- the IAR CE requirements, provided a
In addition, CE rules in Arkansas, ommendations, all such individuals — few additional conditions are met.
Kentucky, Michigan, Oklahoma, regardless of whether they are associated Firms are advised to check with the CE
Washington D.C., and Wisconsin become with an SEC or state registered invest- provider to verify whether CE courses
effective on Jan. 1, 2023. Nevada and ment advisor — would most likely be for a particular professional designation
Rhode Island are finishing up rules that, required to comply with the state’s con- will also be accepted as IAR CE credits.
if established in 2022, could also become tinuing education requirements.
effective by Jan. 1. REPORTING CREDITS
RECIPROCITY In most jurisdictions, the onus for
THE REQUIREMENTS IARs may be required to register in more reporting the credits to the required
The exact CE requirements may vary than one state for various reasons. In most state authority is on the authorized pro-
from state to state. Most jurisdictions jurisdictions, an IAR who is registered as vider. Every IAR, however, is respon-
require at least 12 CE credits per year: an IAR in their home state and complies sible for ensuring that the authorized
six credits of IAR regulatory and ethics with their home state’s CE requirements provider reports the IAR’s completion of
content, and six credits of IAR products will be in compliance with another state’s the applicable CE requirements, and in
and practice content. CE requirements as long as the IAR’s connection with their firm, to maintain
The course must be offered by a pro- home state’s CE requirements are as appropriate records of CE completion.
vider who is authorized to provide CE stringent as those of the other state. We anticipate that other states will
courses in the particular jurisdiction. To determine whether the IAR’s implement IAR CE requirements in 2023
home state requirements are as strin- and beyond. While many jurisdictions
APPLICABILITY gent as another state’s CE requirements, have adopted rules that are substantially
IAR CE requirements are generally appli- an analysis of the number of CE credits similar to the NASAA model rule, exact
cable to IARs of both SEC- and state-reg- is required, as well as the content break- rules vary on a state-by-state basis.
istered investment advisors. NASAA is down of the credits.
made up of representatives from each of Thomas D. Giachetti is chairman of the
the 50 states. It has no jurisdiction over FINRA-REGISTERED BDs, PROFESSIONAL Investment Management and Securities
SEC investment advisors. Although it is CERTIFICATION HOLDERS Practice Group of Stark & Stark. He can be Adobe Stock
a voluntary organization with no specific In most jurisdictions, an IAR who is reached at [email protected].

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