April 25, 2012

States Continue to Warn RIAs About SEC to State Timeline

As the June 28 SEC to State deadline approaches, more states are weighing in on the importance of starting the transition process early and they have become more vocal about the ramifications of not doing so.

Missouri's Commissioner of Securities noted recently that RIAs should have begun the process immediately after filing their annual amendment on March 30 in order to ensure ample time to complete Missouri's Pre-Registration Examination process by June 28.

They go on to say:  "mid-sized investment advisers applying for registration in Missouri late in or at the end of the relevant period risk being forced to withdraw from SEC registration before being approved for registration in Missouri." We have seen similar warnings from other states as well. 

About 1,900 investment advisory firms indicated on their annual ADV filing that they will no longer be eligible for SEC registration in June.  

SEC and state regulators feel that they have provided an adequate timeline to complete these transitions and we have no reason to believe that deadline extensions will occur.  For advisors that begin the process late, we believe that there is a high likelihood that SEC-registered advisors will be required to withdraw prior to state registration approvals.  This gap in registration essentially prohibits the advisor from conducting advisory business.

If you have not done so already, we encourage all advisors to begin the process now.  If you missed our webinar on the SEC to State transition, we have posted the slides here to help you with your planning.  


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