Unit 2 Flashcards
What is an IAR?
any partner, officer, director, or other individual employed by or associated with an investment adviser
Who can be an IAR?
Only a natural person/individual can be an IAR.
The investment advisory firm is the legal person (entity) that the IAR (natural person) represents
Can an IAR act as both an IA and IAR?
Yes
Who does the IAR register with?
ONLY the states (USA)
What are the functions of an IAR?
Makes recommendations
Manages accounts or portfolios
Solicits new business
Supervises employees who perform any of the foregoing
What are the exclusions from registering as an IAR?
Employees whose activities are confined to clerical administrative duties or are solely incidental
Provides only impersonal investment advice (doesn’t meet the objectives/needs of specific individuals or accounts)
What are the exemptions from registering as an IAR?
Individuals representing a state-registered. If an IAR has no more than 5 RETAIL clients during the proceeding 12-months and does not maintain a place of business in the state
Snowbird exception
For those performing as IARs for federal covered advisers, IAR registration is required only in those states where that individual has a place of business
Registration for IARs is accomplished by:
filing a Form U4 through FINRA’s CRD (Central Registration Depositor)
How does automatic registration for IARs work?
When an investment adviser registers in a new state, officers, partners, and directors who are already acting as IARs are automatically registered. The IA includes names and info of the IAR on Form ADV so they do not have to file an individual Form U4.
IAR Termination Procedures if the IA is state-registered:
Firm must notify the Admin
if the IAR is joining a new firm, both firms must notify the Admin
IAR Termination Procedures if the IA is federally covered:
IAR must notify the Admin
Any changes, especially of disciplinary nature, requires the individual to:
update their Form U4 within 30 days
