The Investment Adviser Registration Depository (IARD) system was launched Dec. 4, 2000. This April 30 marked the conclusion of the implementation period for existing investment adviser firms registered with the Securities and Exchange Commission to transition onto IARD.
The majority of advisers complied with the SEC mandate and successfully filed their Form ADVs by their scheduled deadlines, however not all advisers have transitioned onto the depository.
In June, a letter was sent to approximately 350 investment advisers which had failed to take any action regarding the IARD transition. The letter specified that firms not responding by July 31 would be subject to cancellation. The SECs division of investment management intends to start proceedings against firms that did not comply with the July 31 deadline.
This was followed by a letter in July to the 319 firms which had acquired IARD entitlements but had not yet made a transition filing. The deadline to avoid cancellation is August 31. Some of the 350 firms mentioned above are also included in this group.
The Investment Adviser Public Disclosure Program for investment adviser firms registered through the IARD system is presently scheduled to be launched at the end of August. On the public disclosure segment, the most recent electronic full Form ADV filing made will be disclosed via the Internet; however, home addresses and social security numbers will not be available for viewing. Our SEC source has noted that there will be little or no advance notification with the possible exception of a press release on the day preceding roll out.
All states that regulate investment advisers have agreed to accept filings through IARD. Currently most states have made firm participation in IARD voluntary. However, many states are in the process of enacting legislation and/or rulemaking to mandate use of the IARD system.
To learn which states have already mandated or plan on mandating electronic filing on IARD, visit the North American Securities Administrators Associations website at www.nasaa.org.
Another important item is firm participation in the IARD Renewals Program for the fourth quarter of 2001. Additional detailed information regarding renewals will be communicated directly to investment adviser firms later in 2001 and will be available on the IARD website at www.iard.com.
As for 2002, advisers should plan on budgeting fees for the start up registration of investment adviser representatives on IARD. The anticipated fees per representative are as follows: $45 for an Initial Set-up Fee, $45 for the Annual Renewal Fee, and $45 for a Transfer Fee when a representative changes firms.
Some states have reduced their state registration and renewal fees to lessen the financial burden on firms. In addition, the State registrants will not be assessed the IARD Annual Fee for the 2002 Renewals Season.
This story was adapted from a story appearing on the National Regulatory Services Web site.