Regulatory Update: Continuing Education

North American Securities Administrators Association (“NASAA”) has adopted and applicable states have made effective beginning this 2022 calendar year a continuing education (“CE”) requirement for Investment Adviser Representatives (“IARs”) of Registered Investment Advisers (“RIAs”). The CE requirement covers both state and federal RIAs IARs depending on state jurisdiction. For those jurisdictions that have adopted the CE requirement, IARs registered or notice-filed in the applicable states must complete, from approved vendors, a total of twelve credits annually of CE covering certain subject areas (i) Ethics and Professional Responsibility (6 credits) AND (ii) Products and Practice (6 credits) under the NASAA Model Rule (“post-registration requirements”) by no later than beginning this 2022 calendar year-end.

All IARs with Series 65 qualifications (or equivalent), or professional designations (CFP, CFA, PFS, etc.) must complete the annual CE requirements, for the applicable states, beginning the effective year and subsequent annual periods to follow. If the post-registration requirements are not satisfied, FINRA will place the IAR on “CE inactive” status via the Central Registration Depository System (“CRDS”) until compliant. If the inactive status is not remedied by the following calendar year-end (including the current calendar year requirements), the IAR will be unable to renew registration via the CRDS Form U4 annual renewal.

Currently, the following jurisdictions require RIA IARs to complete the annual CE requirements for the applicable calendar year:

1) 2022: Maryland, Mississippi, and Vermont;

2) 2023: Arkansas, Kentucky, Michigan, Oklahoma, South Carolina, Washington D.C., and Wisconsin;

3) Possibly 2023: Nevada, Rhode Island, (These states are planning final adoption sometime by 2022 year-end resulting in an effective calendar year of 2023)

The number of states adopting the NASAA Model Rule will increase. Updates will be posted as we become aware of any additions. Refer to the link below for the current NASAA FAQs for more information regarding the continuing education requirement: NASAA-IAR-CE.