HELP & TRAINING

IARD System Frequently Asked Questions - Form Filing for IA Representatives

General IA Representative FAQs

Specific subcategories:

Disclosure
Dually Registered Representatives and/or IA Representatives with Affiliated Firms
Fingerprint Cards
Qualifications (including Exams & Professional Designations)
Relicensing

 

General

1. What is the purpose of the Private Residence check box?

The private residence check box enables an individual to indicate to regulators on the Form U4 that his or her Office of Employment address is also a private residence. Regulators may then determine whether to disclose the address to the public, given privacy concerns.

2. Can an IA-only firm make use of the “Allow Rep Edits” feature of Form U4?

Yes. Please review the Form U4 Quick Reference Guide for more information on this feature.

3. What filing type should I choose if my firm is hiring an individual as an RR, and the individual is only registered as an RA with another firm and plans to maintain the RA registration with that firm?

Your firm should submit a Dual Registration U4 Filing. If the firm is jointly registered, the firm should choose Amendment to add an AG registration.

4. Do the Form U5 rules apply to IA representatives (RAs)?

Yes. All Form U5 rules apply, EXCEPT the Form U5 late fee does NOT apply to IA-only representatives (RAs).

5. Are AGs exempted from filing RA registrations?

Firms should contact the states directly for information on state exemptions for RA registrations. Visit the NASAA website for more information.

6. What is a Concurrence Filing?

A Concurrence Filing is a type of filing that allows a firm to submit a Form U4 Amendment concurring with, and thereby adopting, Form U4 changes submitted by another firm that employs the same individual. A Concurrence Filing may be filed when the following information is submitted by a firm employing a dually-registered individual:

  • Identifying information/Name Change
  • Other Names, Residential History
  • Employment History
  • Other Business
  • Disclosure Questions or DRPs.

The filing is a read-only filing; however, the Signature Section of the Concurrence Filing must be completed by the adopting firm in order for the concurrence to be effective.

7. Does the Investment Adviser Public Disclosure (IAPD) program include information about individual investment adviser representatives?

Yes. IAPD provides information regarding an individual’s professional background and conduct including current registrations, employment history, and disclosures. View the IAPD website for additional information.

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Disclosure

1. What is the Material Difference Flag and whom does it affect?

The Material Difference Flag applies to dually registered individuals (RR/RR, RR/RA or RA/RA), this flag is set whenever a difference exists in any of the Disclosure Reporting Page (DRP) fields for the same disclosure event (i.e., all DRP fields except for the last field, which is the Summary Detail/Representative Commentary Field). The flag acts as a notification to regulators that a difference in disclosure exists.

Pending registration requests will not be approved until the difference is resolved. If the Material Difference Flag is not resolved by the respective filing firms within 30 days, the appropriate regulator(s) will be notified.

2. How is the Material Difference Flag viewed and how are firms notified?

The Material Difference Flag can be viewed under View Individual: Individual’s Composite Record, and in the specific Disclosure Occurrence(s) that triggered the flag. FINRA staff will send an inquiry or deficiency letter (as appropriate) to the Outstanding Disclosure Letters Queue for all firms with which the individual is currently registered.

3. How is a Material Difference resolved?

Firms are obligated to review the Disclosure Reporting Pages (DRPs) in question, identify the differences in the DRP details, and contact the individual and/or the other firm(s) to determine the basis for the Material Difference and how the difference can be resolved. Once the firm is notified, if the non-filing firm agrees with the information contained in the filing, the non-filing firm can submit a Concurrence Filing through Form Filing or the “Other Firm U4 Filing” Queue.

FINRA will notify the appropriate regulator if the Material Difference has not been resolved in 30 calendar days from the date the flag was set. The filing firm can submit an Amendment Filing to resolve the Material Difference, or both firms can agree on a revised version.

4. An individual is leaving Firm A to work for Firm B. Firm B relicenses that individual and, in doing so, updates a DRP. Firm A has not yet submitted a Form U-5 for that individual. What is Firm A's responsibility? Does Firm A need to concur or amend the information prior to submitting a Form U-5?

Firm A must submit either a Concurrence Filing or an Amendment Filing before it terminates the individual, and while the firm association remains open. If Firm A does not concur or amend before it terminates the individual, the termination does not resolve the discrepancy. If Firm A does not concur or amend within 30 days, regulators will be consulted to resolve the discrepancy.

5. To whom should an IA-only firm direct disclosure questions?

The firm should contact the appropriate state directly. The states perform disclosure review for investment adviser representatives.

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Dually Registered Representatives and/or IA Representatives with Affiliated Firms

1. What types of Dual Deficiencies exist?

There are three deficiencies: RR/RR, RR/RA, RA/RA. A state may have different requirements for each registration combination. Contact the state regulator directly.

2. What is a Concurrence Filing?

A Concurrence Filing is a type of filing that allows a firm to submit a Form U-4 Amendment concurring with, and thereby adopting, Form U-4 changes submitted by another firm that employs the same individual. A Concurrence Filing may be filed when the following information is submitted by a firm employing a dually-registered individual:

  • Identifying information/Name Change
  • Other Names, Residential History
  • Employment History
  • Other Business
  • Disclosure Questions or DRPs.

The filing is a read-only filing; however, the Signature Section of the Concurrence Filing must be completed by the adopting firm in order for the concurrence to be effective.

3. On the Form U-4, under Registration Requests with Affiliated Firms, the following two check boxes are NOT active:

  1. Check here to request the same SRO and jurisdiction registrations for this affiliated firm that are requested for the filing firm.
  2. Check here to request different SRO and jurisdiction registrations for the filing firm.

What should the firm do to make the appropriate SRO registration and jurisdiction selections?

The firm should enter the affiliated firm information and create the affiliate, and then select the affiliated firm hyperlink. The firm will have three choices:

  1. Copy Filing Firm Regs
  2. SRO Registrations
  3. Jurisdictions

The firm may then select the appropriate button(s) and request the desired registrations for the affiliated firms.

4. Firm A and Firm B are listed as affiliates on their respective Forms BD. An individual is currently registered with Firm A as an AG (Broker/Dealer Agent). How does the individual register with Firm B as well? What kind of fees will Firm A and/or Firm B incur?

Firm A will file a Form U-4 Amendment on the individual and in Section 6, add Firm B as an affiliated firm and choose the appropriate SRO and/or jurisdiction registrations that the individual will hold with Firm B. When the amendment is submitted, Firm B will be charged fees for the SROs and jurisdictions selected. Firm A will not be charged any fees.

5. To dually register an individual as an AG (Broker/Dealer Agent) and RA (Investment Adviser Representative) when the employing firms are affiliates, both Form BD and Form ADV must designate the other firm as an affiliate. The SEC does not require, or request, investment advisers registered with them to list BD affiliates on Form ADV. How does an IA list a BD firm as an affiliate on Form ADV?

Investment advisers registered with the SEC are not required to list BD affiliates on Form ADV. The SEC will allow investment advisers that want to list the names and CRD numbers of BD affiliates on Form ADV to do so on Schedule D, Section 7.A. An adviser listing the name and CRD number of an affiliated BD-Only firm on Schedule D, Section 7.A, must include "(BD-Only)" after the BD’s name in the "Legal Name of Affiliated Adviser" field.

6. Firm A is a BD firm and Firm B is an IA firm. Firm A and Firm B are listed as affiliates on their respective BD and ADV forms. (See Question 5 above for important information on listing BD affiliates on Form ADV.) An individual is currently registered with Firm A as an AG. Firm B has transitioned the same individual. When Firm B submits the U-4 Amendment on the individual, can/should it list Firm A as an affiliate in Question 6, Registration with Affiliated Firms?

No. The system already recognizes the individual as being registered with both Firm A and Firm B. Question 6 should be answered 'No.' Question 6 should only be answered 'Yes' if seeking NEW registration with a firm affiliated with the filing firm.

7. Firm A and Firm B are listed as affiliates on their respective Forms BD. An individual is currently registered with Firm A as an AG (Broker/Dealer Agent). How does the individual register with Firm B as well? What kind of fees will Firm A and/or Firm B incur?

Firm A will file a Form U-4 Amendment on the individual and in Section 6, add Firm B as an affiliated firm and choose the appropriate SRO and/or jurisdiction registrations that the individual will hold with Firm B. When the amendment is submitted, Firm B will be charged fees for the SROs and jurisdictions selected. Firm A will not be charged any fees.

8. Firm A and Firm B are affiliated, and both firms are "joint" BD/IA firms. An individual is registered as an AG and as an RA with both Firm A and Firm B. Should both firms transition that individual?

Yes. Both Firm A and Firm B should transition the individual.

9. An individual is registered as an AG with a BD firm and as an RA with an IA firm. He holds a Professional Designation that the IA firm indicated when filing the Form U-4 for the individual. When the BD firm attempts to file a Form U-4 Amendment to update his record, he receives a completeness check indicating that the firm cannot select a professional designation without also selecting an RA position. What can the BD firm do to avoid this completeness check message and submit a Form U-4 Amendment?

The BD firm needs to uncheck the Professional Designation when submitting the Form U-4 Amendment. When the IA firm needs to update the individual's registration for any reason, it can re-check the appropriate Professional Designation at that time. The firms will have to continue to check and un-check the Professional Designation box as necessary to pass the Completeness Check.

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Fingerprint Cards

1. Do IA-only firms submit fingerprint cards to FINRA for processing?

No. IA-only firms submit fingerprint cards directly to the states. Not every state requires fingerprint cards for an RA registration and firms should contact the relevant state to verify state.

2. If an IA-only firm submits a fingerprint card to FINRA in error, what happens?

Fingerprint submissions received by FINRA from an IA-only firm will not be returned to the firm. The firm will need to re-print the individual and submit the fingerprint card directly to the state with the fingerprint requirement.

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Qualifications (including Exams & Professional Designations)

1. What are the qualifications for an IA representative (RA) registration?

To be deemed qualified for the RA registration category, the system requires that an individual meet one of the following criteria:

  1. Have a passing grade for the S65 within the past two years; or
  2. Have a passing grade for the S66 within the past two years and a passing grade for the S7 within the CRD continuous registration period or two years prior to the beginning of the continuous registration period; or
  3. Have a passing grade for the S66 within the past two years and a GS/TR/TS within the CRD continuous registration period; or
  4. Currently hold one of the system-recognized professional designations; or
  5. Have held an approved RA registration with any jurisdiction within the past two years.

With regard to qualifying via registration in another jurisdiction, that registration would have to be posted on the CRD system. If the applicant qualifies because he or she held an approved RA registration with any jurisdiction within the past two years, a notice of the application will appear in the state’s Manual Approval Queue. The state can then determine whether the qualification meets the state reciprocation requirements. If not, the state will notify the applicant that the individual will have to pass the qualifying exam for that state.

2. How far back does the exam history information go when a Form U10/TESS exam is linked in CRD?

The exam history reflects all exam data on the Proctor System. For any Form U4 Filing request, the system will check to see if the Series 63, 65, and 66 exams were taken via a Form U10 and bring the information into CRD.

3. Does a Professional Designation waive the Series 7 for an individual seeking to be GS registered?

No. A Professional Designation does not exempt an individual from the Series 7.

4. What Professional Designating Authorities participate in the system for the registration purposes of IA representatives?

  • CFP - Certified Financial Planner
    Awarded by the Certified Financial Planner Board of Standards, Inc.
  • ChFC - Chartered Financial Consultant
    Awarded by the American College, Bryn Mawr, PA
  • PFS - Personal Financial Specialist
    Awarded by the American Institute of Certified Public Accountants
  • CFA - Chartered Financial Analyst
    Awarded by the Association for Investment Management Research
  • CIC - Chartered Investment Counselor
    Awarded by the Investment Adviser Association

5. Are Professional Designations accepted in every state as an alternate qualification requirement?

Although the system currently accepts Professional Designations for every state that registers investment adviser representatives, firms should contact each state to confirm whether it accepts a given designation in lieu of the qualifying examination.

6. I attempted to submit a Form U4 filing with a Professional Designation(s) and the filing is not going through. I am receiving a Completeness Check error message. What should I do?

Contact the Professional Designating Authority directly to verify the Designation(s) and have the Professional Designating Authority send the updated information to FINRA via an electronic file. Once CRD processes the information, the firm may re-submit the pending Form U4 filing with the Designation and will no longer receive the error message.

7. For individuals that have submitted a Professional Designation on Form U4, what information will display in Web CRD?

"Current Professional Designations" section of View Individual lists the Professional Designations indicated on the most recent Form U4 filed on behalf of an individual. Upon submission of a Form U4, the system confirms that the individual is included on the most recent listing of designees from the relevant Designating Authority. The designation will continue to appear in Web CRD until a Form U4 Amendment is filed without that designation indicated. Conversely, if a subsequent Form U4 Filing omits that designation even though the individual holds it, the designation will no longer appear.

Please note: Firms and investment adviser representatives are under a continuing obligation to update their Form U4; accordingly an investment adviser representative should amend Form U4 if he/she reported holding a Professional Designation and that designation has been revoked, suspended or has lapsed.

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Relicensing

1. How does a firm determine which Relicensing filing type to select?

Relicense All: Relicense All is for an individual who wishes to register with a new firm within thirty (30) days from the date of termination with the previous firm(s), and intends to be registered solely with the new firm. All other firms with which the applicant was registered must submit a Full Form U5 to terminate his or her employment.

Relicense CRD: Relicense CRD is for an individual who wishes to register as a Broker/Dealer Agent (AG) with a new broker/dealer firm and terminate his or her AG positions with any other firm(s) (i.e., the other firms will submit Form U5 filings for the individual for the CRD registration) but retain any current investment adviser registrations.

Relicense IA: Relicense IA is for an individual who wishes to register as an Investment Adviser Representative (RA) with a new investment adviser firm, but retain any current broker-dealer registrations. The individual's AG registration will not be affected.

2. Since there are three types of Relicense Filings, is there a risk that a firm will select a Relicense Filing type that is not valid for the registration type(s) requested? For example, if the individual is RA-only registered, can the firm select the Relicensing type for CRD-only?

  • If the individual is "AG only", a firm should select "CRD" as the Relicensing type.
  • If the individual is "RA only", a firm should select "IA" as the Relicensing type.
  • If the individual is dual (AG & RA), a firm can select any Relicensing type.

Although your firm may always choose "All" as a Relicensing type, your firm should exercise caution when selecting this Relicensing type because it will imply that the individual is no longer working for the previous firm(s) in any registered capacity (RR and/or RA).

3. An individual is registered as an AG with Firm A. The individual also has a Sole Proprietor IA firm, Firm B, where the individual is registered as an RA. The individual wants to leave Firm A and work as an AG for Firm C, while maintaining RA registration with Firm B. What relicensing type should Firm C choose?

Firm C should choose RELICENSE CRD. With Relicense CRD, the system will expect a Full Form U5 from Firm A. The individual's RA status with Firm B will not be affected by the relicense. The firm should not choose Relicense All, because the system would then require Full Forms U5 to be filed by both firms.

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