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Jan 2010
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January 27, 2010

Deadline Approaches for Michigan Investment Adviser Representative Registration

Michigan-registered and SEC-registered investment advisers who are notice-filed in Michigan are required to register their investment adviser representatives (IARs) who have a place of business in Michigan. Federal law allows states to require registration of IARs when they have a place of business in the state. Similarly, states may require registration of solicitors who have a place of business in the state.

The IAR registration requirement is imposed under the Michigan Uniform Securities Act (2002), which took effect October 1, 2009. If you are in doubt about the need to register, carefully examine the definition of an "investment adviser representative" in the new act, which incorporates the federal definition in the Investment Advisers Act of 1940.

The Office of Financial and Insurance Regulation (OFIR) requires Michigan IARs to be registered by July 1, 2010, in order to continue conducting business in the state. Last week, OFIR announced that registration applications (Form U4) should be submitted no later than May 1, 2010 to allow OFIR 60 days for processing. OFIR has not yet announced how it intends to register solicitors.

Michigan IAR registration requires that the individual either take and pass the Series 65 Uniform Investment Adviser Law Examination or qualify for one of two exam waivers. OFIR announced that no one will be grandfathered into registration on any other basis.

The first exam waiver is for an individual who has previously passed the Series 65 exam and has been registered within the past two years in another state that requires the exam. The second exam waiver is for individuals who hold and are in good standing with one of the following professional credentialing organizations: Certified Financial Planner (CFP), awarded by the Certified Financial Planners Board of Standards; a Chartered Financial Consultant (ChFC) or Masters of Science and Financial Services (MSFS), awarded by the American College, Bryn Mawr, Pennsylvania; Chartered Financial Analyst (CFA), awarded by the Institute of Chartered Financial Analysts; Personal Financial Specialist (PFS), awarded by the American Institute of Certified Public Accountants; or Chartered Investment Counselor (CIC), awarded by the Investment Adviser Association.

IARs should not delay in beginning the process, which entails the following:

  1. Study. Optional, but recommended. Study materials are commercially available. Self-study books can be found by searching for "Series 65 exam" on Amazon.com. Using Google, you can find several vendors offering study materials and courses. For example, PassPerfect offers study guides and practice exams, which can be found at http://www.passperfect.com/. Look for Series 65 under "State Licensing Exams." Similar courses and materials are offered by Kaplan http://www.kaptest.com/. FINRA's Web site lists others http://www.nasaa.org/industry___regulatory_resources/exams/887.cfm .

  2. Form U4, registration and exam fees. For each IAR, the firm must deposit $200 into its daily Web CRD/IARD E-Pay account to cover the $65 registration fee and $135 examination fee. The firm must then submit Form U4 to OFIR using the IARD/Central Registration Depository (CRD) system. Upon submission, the 120-day window will be opened for the IAR to take the Series 65 exam.

  3. Schedule Exam. Call a testing location to make an appointment to take the exam. Appointments can be scheduled through Pearson VUE or Prometric. Contact Pearson VUE's National Registration Center toll free at 866-396-6273, or go to www.pearsonvue.com/finra for Web-based scheduling. Prometric National Call Center's toll free number is 800-578-6273, or go to www.prometric.com/finra for scheduling.

    Make sure to schedule the session as far in advance as possible to ensure an appointment on the desired date. When scheduling the exam, the testing staff will need the IAR's name, Social Security number, telephone number and the name of the session or identifying series ID (e.g., Series 65).

  4. Pass Exam. The exam consists of 130 multiple choice questions plus 10 pretest questions. You will be allowed 180 minutes to complete the exam. Upon completion, you will receive your overall test score as well as a score for each section. Form U4 is automatically updated when you pass the Series 65 exam.

After you have completed the four steps, OFIR will review the application. Regulatory disclosures may delay processing. IAR registration must be renewed every year.

We are able to help coordinate the registration process for your IARs. Please contact one of our Senior Compliance Consultants if you need assistance with IAR registration, creating and submitting Form U4 or annual renewal on the IARD. We look forward to assisting you in these matters.

NOTICE. Although we would like to hear from you, we cannot represent you until we know that doing so will not create a conflict of interest. Also, we cannot treat unsolicited information as confidential. Accordingly, please do not send us any information about any matter that may involve you until you receive a written statement from us that we represent you.

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