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New Rule Update

NASAA Adopts New Continuing Education Rule for IARs
Wednesday, December 16, 2020

On November 30, 2020, the North American Securities Administrators Association (NASAA) announced its membership has voted to adopt a model rule to set parameters by which NASAA members could implement continuing education programs for investment adviser representatives (IARs) in their jurisdictions.

The model rule will require IARs to complete 12 hours of continuing education annually, revolving around two components: products and practices, and ethics and personal responsibility.

According to Lisa A. Hopkins, NASAA President and West Virginia Senior Deputy Securities Commissioner, the new rule will improve the ability of IARs to provide their clients the best and most knowledgeable services. “This successful collaboration will help promote heightened regulatory compliance while also helping investment adviser representatives better serve their clients by remaining knowledgeable of current regulatory requirements and best practices,” Hopkins said.

Completing FINRA requirements can help to ensure you’re in compliance with the new NASAA rule.

Investment advisor representatives who are registered with a FINRA member broker-dealer and who comply with FINRA’s continuing education requirements are considered to be in compliance with the subrule (1)(B) IAR Products and Practice Requirement for each applicable Reporting Period.

    • To ensure these criteria are fully met, advisers should ensure FINRA continuing education content meets all of the following baseline criteria:
    • The content of the continuing education program must fall within the categories delineated by the model rule – products and practices, or ethics and personal responsibility.
    • The CE content must be derived from industry rules, regulations, and accepted standards and practices in the investment advisory industry.
    • The CE content includes a requirement to demonstrate proficiency in the subjects being covered by the training.
    • Credits must be appropriately reported during the proper reporting periods.
    • The requirements in the IAR’s home state must be at least as stringent as the NASAA Model Rule and the advisor must be in compliance with their home state’s requirements.

A complete copy of the model rule can be found here. If you need additional support with training programs, our consulting team provides resources to educate and prepare your team for serving clients and staying in compliance.

About Red Oak Compliance Solutions

Red Oak Compliance Solutions is the global advertising review software of choice in the financial services industry, serving clients with more than $19 trillion in assets under management. Red Oak’s advertising compliance review software offers quick implementation timelines, as well as agile technology that responds to client needs and is 100% Books and Records compliant. Our clients report 35% faster approvals and 70% fewer touches, with many experiencing even better results. Are you ready to minimize risk, reduce costs, and improve efficiency?  Contact the Red Oak team to learn how.

About Red Oak Compliance Solutions

Red Oak Compliance Solutions is the global advertising review software of choice in the financial services industry. It is a comprehensive suite of SEC 17A-4 compliant features that are 100% books and records compliant and provides clients with 35% faster approvals and 70% fewer touches or better. We also offer Smart Review(SM), which solves for the storage and maintenance of disclosures, helping firms reduce risk, decrease review times, and increase the speed of distribution of marketing materials. Smart Registration(SM) automates the licensing and registration management process to help reduce regulatory risk and time spent on manual processes. Overall, Red Oak allows firms to minimize risk, reduce costs, and increase compliance review process effectiveness and efficiencies.