All Investment Advisory Agents (IARs) of registered investment advisors are required to file Form U4, a regulatory declaration containing certain public disclosures of information about financial professionals. The IAR is also responsible for keeping its own Form U4 up-to-date, but Form U4 is subject to change unless there are changes that justify updating it, unlike other regulatory forms such as Form ADV, which require annual amendments. , no need to fix. In many cases, the IAR’s Form U4 will go unnoticed for years, even decades, and may become obsolete if the IAR forgets to amend the form as circumstances change. I have. In short, to meet their regulatory responsibility to maintain the accuracy of Form U4, the IAR (especially those who have not seen Form U4 for some time) will gain a better understanding of Form U4 in general and benefit from: can do. Double-check the contents of your own Form U4.
In this guest post, investment management attorney and founder of Beach Street Legal LLC, Chris Stanley, discusses important details of what a Form U4 contains, common mistakes that can trip you up with an IAR filing, preparation and Learn more about filing best practices. With state and federal regulators he forms U4.
One of the first challenges in preparing Form U4 is figuring out which sections to fill out. Form U4 is used by both his IAR and the broker-dealer’s registered representative, so some sections of the form do not apply to a person who registers only as his IAR. In addition, the IAR may encounter ambiguous wording or wording that is inconsistent with wording used in other regulatory forms when completing the sections of Form U4 for which it is responsible. For example, some of his IARs who are independent contractors to their own company may be considered “employees” for the purposes of the company’s Form ADV, but still identify themselves as “employees” when completing Form U4. must be classified as an “independent contractor”.
In addition, IAR and its employers may need to familiarize themselves with the requirements of the state in which they are registered in order to properly complete Form U4. For example, some states require registrants to be fingerprinted before approving registrations, and others have different rules for dual registration IARs, and RIAs and broker-dealers are mutually exclusive. We may allow his IAR to be registered only if we are affiliated. Do not allow double registration under any circumstances. Also, IAR generally cannot solicit new business or provide investment advisory services until registration has been approved by the applicable state, so if the registration process is halted due to an error in filling out Form U4, the IAR could take weeks or weeks to complete the business. may not be able to perform. more.
Ultimately, even though many IARs rely on their compliance departments to process Form U4, the IAR still checks and verifies Form U4 for accuracy and ensures that necessary updates are made (form You are responsible for ensuring that the form is reflected (e.g. by correcting on your own or by notifying the Company’s appropriate compliance officer). Additionally, it’s worth remembering that much of the information on Form U4 is publicly available on the SEC’s website, except for certain personal information such as home address and date of birth. As such, it is for IAR to ensure that Form U4 is up to date and how it presents itself to current and potential customers in public, including content such as websites, advertisements and social media posts. But IAR’s (also published) Regulatory Disclosure!