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Securities

Registration Frequently Asked Questions

Investment Adviser and Investment Adviser Representative Registrations

This information is provided as general guidance to the public. It should not be considered legal advice or a definitive interpretation of the law.

What is the total fee to register an investment adviser that is a sole proprietorship?

$350 ($300 for the IA/Firm and $50 for the IAR/Representative), plus any FINRA-assessed costs.

Is there a de-minimis exclusion from the definition of investment adviser?

Yes. A firm does not need to register or notify the Securities Division if it has:

  • No office or other physical presence in Massachusetts and
  • No more than 5 clients during any 12-month period.

My firm is an SEC-registered investment adviser (a notice-filer in Massachusetts). Do I need to register all of my representatives who provide investment advice to clients in Massachusetts?

You only need to register representatives who have a “place of business” in Massachusetts, and who meet the federal definition of investment adviser representative.

Are there any registration (and examination) requirements for officers, directors, or partners of an advisory firm?

Those who do not meet the definition of an investment adviser representative, and do not wish to be automatically registered, must file a Form U4 and an affidavit (PDF) stating that they are not acting as an investment adviser representative of the firm in Massachusetts. They must file the affidavit filed directly with the Securities Division, and file Form U4 either directly with the Division or electronically via the CRD.

What are the certification or examination requirements in Massachusetts?

Each investment adviser representative submitting an application for registration must demonstrate compliance with either (a) or (b) below:

  • Currently hold one of the following professional designations:
    • Certified Financial Planner (CFP);
    • Chartered Financial Analyst (CFA);
    • Chartered Financial Consultant (ChFC);
    • Chartered Investment Counselor (CIC);
    • Personal Financial Specialist (PFS); OR
  • Obtained a passing score on (i) the Uniform Investment Adviser Law Examination (“Series 65”), or (ii) on both the Uniform Combined State Law Examination (“Series 66”) and the General Securities Representative Examination (“Series 7”).

    Note: The Series 65 and the Series 66 must be those examinations available since January 1, 2000. A passing score on either examination prior to January 1, 2000 does not qualify as meeting the above requirements.

Will a Master’s Degree in Business Administration satisfy the examination/certification requirements for registration as an investment adviser representative?

No. An MBA alone is not enough to qualify for registration, but you can still qualify with passing scores on the Series 66 and Series 7 examinations. There are certain alternatives to the Series 7, however, including a degree in a subject involving significant financial and investment analysis from an accredited higher education institution.

I plan to solicit clients for a state-registered investment adviser. Does this raise any registration issues?

Yes. Solicitation for compensation on behalf of a state-registered investment adviser will require you to register as a representative of that adviser. You may request an examination waiver if you will only solicit for a single investment adviser, offer no investment advice, and perform no other advisory services. You will still need to register as an investment adviser representative.

Senior Financial Designations

When did the Massachusetts “Senior Designations” regulations take effect?

The regulations on the use of senior designations became effective June 1, 2007.

Has the Securities Division recognized any accreditation organizations that may accredit senior designations?

Yes. The Secretary may recognize accreditation organizations by rule or order.

Does the Securities Division maintain a list of credentials or designations that have been accredited?

No. The sponsor of the credential or designation would hold this information. Any accreditation organizations recognized by the Secretary also maintain their own lists of accredited credentialing programs.

For purposes of Subsections 12.204(2)(i) and 12.205(9)(c)(15), what constitutes an “application” to the National Commission for Certifying Agencies (“NCCA”)?

The NCCA informed us that they only accept complete accreditation applications. This differs from the American National Standards Institute, which accepts partial applications (with the remaining materials submitted later). However, an applicant may submit a letter of intent to the NCCA indicating an eventual complete application shortly afterward.
  • NCCA accepts applications three times a year, in January, April, and September. The Division has agreed that an “application” to NCCA under Sections 12.204(2)(i) and 12.205(9)(c)(15) may be a letter of intent indicating that the full application will be submitted at the next NCCA application deadline, as long as the application is actually submitted within 90 days after the letter of intent.
  • A letter of intent with an indefinite timeline does not qualify as a valid application.
  • A letter of intent with a firm submission date only qualifies if the applicant submits all required materials by that date.

How does the regulation apply to degrees or certificates evidencing completion of an academic program at an accredited institutions of higher education?

Subsections 12.204(2)(i) and 12.205(9)(c)(15) do not apply to a degree or certificate evidencing completion of an academic program at an accredited institution of higher education, unless the facts and circumstances associated with the provision or use of such degree or certificate indicate that it improperly suggests or implies certification or training beyond that which the degree holder or certificate holder possesses or that it otherwise misleads investors.
  • For the purposes of subsections 12.204(2)(i) and 12.205(9)(c)(15), “accredited institution of higher education” means any institution of higher education that appears on the United States Department of Education’s “Accrediting Agencies Recognized for Title IV Purposes” list.
    • This lists establishes eligibility to participate in Title IV federal student financial assistance programs.
  • Please note that accreditation organizations that accredit institutions of higher education, referenced in the reference to “accredited institution of higher education” under these exemptions 12.204(2)(i)(4) and 12.205(9)(c)(15)(d), are different from the accreditation organizations referred to in subsections 12.204(2)(i)(1) and 12.205(9)(c)(15)(a), such as the American National Standards Institute and the National Commission Certifying Agencies, which accredit credentials and professional designations.
  • The regulation’s “facts and circumstances” requirement included in these subsections 12.204(2)(i)(4) and 12.205(9)(c)(15)(d) is similar to the requirements of FINRA Rule 2210, which require that brokerage firms and their representatives must ensure that statements to customers are not misleading within the context in which they are made.