RIA Compliance and Practice Management Blog

An Update on the new Investment Adviser CE Requirement

Posted by RIA in a Box

Jun 14, 2021 12:34:04 PM

Investment Adviser CE Requirements

As a reminder, The North American Securities Administrators Association (“NASAA”) adopted a new investment adviser continuing education ("CE") model rule in November 2020. Beginning in 2022 in the states which adopt the new model rule, an individual investment adviser representative ("IAR") will need to complete 12 continuing education credits per year in order to maintain their IAR registration. Since the new model investment adviser CE rule was adopted, NASAA has released additional guidance for IARs including details on course requirements and consequences for failing to comply.

As IARs prepare to follow the new continuing education requirements, they are awaiting details from NASAA as to which organizations will offer eligible courses. On May 11, 2021, NASAA released a handbook on the investment adviser representatives continuing education (“IAR CE”) program requirements to guide potential content providers on expected criteria.

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The purpose of NASAA’s new continuing education rule is to make certain that IARs are knowledgeable of current regulatory requirements and best practices.

IARs must comply with the continuing education requirements adopted by the state or securities regulator(s) in which the IAR is registered. RIA firms can prepare by implementing procedures to ensure the IARs at their firms are informed of the requirements per each IAR's jurisdiction and that their courses are completed in a timely manner. Failure to complete the 12 CE credits will result in the IAR being listed as “CE Inactive” and unable to register or renew IAR registration.

As a reminder, IARs will need to attain the 12 continuing education credits by completing the following:

1) IAR Ethics and Professional Responsibility Requirement: An IAR must complete six (6) credits of IAR Regulatory and Ethics Content offered by an Authorized Provider, with at least three (3) hours covering the topic of ethics.

2) IAR Products and Practice Requirement: An IAR representative must complete six (6) credits of IAR Products and Practice Content offered by an Authorized Provider.

We summarized the entire list of requirements set in the model rule in a previous blog post, available here.

While NASAA has stated that IARs can select courses that they find relevant to their interests and business models, IARs will be held accountable for obtaining continuing education content distributed by an authorized IAR content provider. The authorized IAR CE providers, determined by NASAA, will be responsible for reporting the completed credits.

Stay tuned for more progress updates on the continuing education rule and requirements for IARs. 

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RIA in a Box LLC is not a law firm, investment advisory firm, or CPA firm. RIA in a Box LLC does not provide legal advice or opinions to any party or client. You should always consult your relevant regulatory authorities or legal counsel if applicable.

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