NY Modernizes Rules Relating to Securities Registration and Filing

  • New York AG Letitia James announced the adoption of two final rules related to securities registration and filing with the state Investor Protection Bureau (“IPB”) to better conform registration and filing processes with the federal securities regulatory regime.
  • The revisions to Part 10 of Chapter II, Title 13 of the Official Compilation of Codes, Rules and Regulations of the State of New York (“NYCRR”) amend regulations to require certain notice filings for federal “covered securities” being sold in New York and that such filings be made through the North American Association of Securities Administrators’ electronic filing depository system. These filings are mandatory effective December 2, 2020.
  • The revisions to Part 11 of Chapter II, Title 13 of the NYCRR will require the registration of investment adviser representatives (“IARs”) in New York through the Central Registration Depository/Investment Adviser Registration Depository. Unless qualified for a waiver, IARs will be required to pass an exam and register with the state. This rule goes into effect on February 1, 2021, but IARs that are currently engaged in business covered by the new regulations will have until December 2, 2021, to comply with these regulations. The revisions to this rule also require that IARs take reasonable steps to verify the “accredited investor” and “qualified client” status of clients so designated.