Reminder: Annual IAR Continuing Education Requirements

December 14, 2023

It is that time of the year again

Time to ask IARs if they have completed annual Continuing Education (“CE”) requirements. Eleven states have continuing education requirements for Investment Adviser Representatives (“IARs”) with final effective dates. Even more jurisdictions have planned or passed a CE requirement for the future. Notices have already been sent to IARs with a CE requirement. As we approach year end, now is the time to make sure your IARs have completed the requirement to avoid CE inactive status and eventual ineligibility for IAR registration.

If an IAR does not complete the CE requirement by the annual deadline, the following will occur:

• Failure to complete by the annual deadline:
  • the IAR must still pay the registration renewal fee;
  • CRD will set his or her IAR CE status to “CE Inactive;” and
  • The IAR can continue to do business in this status.
• Failure to complete within one year after the annual deadline:
  • “CE Inactive” status is notice to the IAR that if CE is not completed by the end of year:
    • the IAR will be unable to renew his or her registration; and
    • An IAR that is CE Inactive will hold that status in all states where the CE rule is in effect.
• Failure to complete within two consecutive years after the annual deadline:
  • Registration in CE states will be administratively terminated; and
  • IARs must make up the required CE or re-qualify by examination and reapply for registration.

Completing the Requirement

The IAR CE requirement was put forward by the North American Securities Administrators Association (NASAA) to close the education gap for IARs who are not otherwise subject to CE requirements.  IAR CE is an individual requirement of the IAR based on states of registration, including any registration in place for only a portion of the year. The CE requirement consists of 12 credits of course work required each year to maintain registration. A “credit” is a unit that has been designated by NASAA to be at least 50 minutes of educational instruction. The 12 credits must include 6 credits of Products and Practices and 6 credits of Ethics and Professional Responsibility.

Those with a professional designation may be able to use CE courses to maintain the designation and to satisfy the state IAR CE requirement if the provider of the course has been approved for IAR CE purposes.

In-scope Jurisdictions

The following states currently have IAR CE requirements:

• Arkansas (1/1/2023 effective date)
• Kentucky (1/1/2023 effective date)
• Maryland (1/1/2022 effective date)
• Michigan (1/1/2023 effective date)
• Mississippi (1/1/2022 effective date)
• Oklahoma (1/1/2023 effective date)
• Oregon (1/1/2023 effective date)
• South Carolina (1/1/2023 effective date)
• Vermont (1/1/2022 effective date)
• Washington, D.C. (1/1/2023 effective date)
• Wisconsin (1/1/2023 effective date)

The following states have adopted IAR CE requirements, which will become effective in the near future:

• California (1/1/2024 pending effective date)
• Colorado (1/1/2024 pending effective date)
• Florida (1/1/2024 pending effective date)
• Hawaii (1/1/2024 pending effective date)
• Nevada (1/1/2024 pending effective date)
• North Dakota (1/1/2024 pending effective date)
• Tennessee (1/1/2024 pending effective date)
• U.S. Virgin Islands (1/1/2025 pending effective date)

If you are unsure of the IAR CE status for an IAR at your firm, take the following steps to determine the IAR’s status:

1. Navigate to the firm’s CRD page.
2. Under the profiles tab, you will see all registered individuals for the firm.
3. Click on the individual’s name and scroll down to the “IAR CE” row under Rep status.
4. A message of “IAR CE Required” will appear for an IAR with an existing CE requirement.

It is a good idea to complete CE requirements, even if you are an IAR withdrawing from registration for an in-scope jurisdiction.  If an IAR was registered for any portion of a year in an IAR CE state, the IAR is required to take 12 CE credits.  If the IAR failed to satisfy the CE requirement, they would have to catch up on this deficient IAR CE before filing a U4 to any other state with a CE requirement.  With more states joining the list, this means you could be declared deficient for IAR CE and any approval of registration would be pending your completion of those outstanding CE credits.

Additional Resources

For updates on in-scope jurisdictions, see NASAA’s map https://www.nasaa.org/industry-resources/investment-advisers/investment-adviser-representative-continuing-education/

For NASAA’s FAQ and guide for IARs, see https://www.nasaa.org/industry-resources/investment-advisers/resources/iar-ce-faq/