The Deadline For Filing For State Registration Is Next Week!

Thursday, June 21, 2012 06:07
The Deadline For Filing For State Registration Is Next Week!

Tags: Dodd-Frank | regulation | sec

The deadline is fast approaching for midsize RIAs who must register with their states to do so. By June 28, approximately 2400 such firms will switch their registrations from the SEC to state regulation. Failure to meet the deadline can have big consequences: the firms’ registration may be revoked.

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About 1500 firms have received letters from the SEC warning of pending deregistration if they do not register with their home states. Filing for state registration by the June 28 date will avert the danger but many RIAs seem to be resting on their laurels until their states send their registration approval.
It’s true that states may be overwhelmed and that it may take a while for them to get through all of the paperwork. But filing by the deadline is imperative, either way. Don’t miss the June 28 filing date! That's next week. One week from today.

Comments (3)

I filed with the State of Florida in March. They didn't respond until May. I cleared up the deficiencies they noted the following day, but they still haven't acted as of today. What happens when a State fails to act on an advisors application in time? Does the advisor stay registered with the SEC pending the State's response?
wneubauer , June 23, 2012
Chris Winn
You are not alone!! The state regulators across the nation has process countless applications this spring for SEC to State transitions and new applicants. This is an unprecedented volume. Don't take a lack of communication as "no one is working there". They are just working on other applications that were likely submitted before yours.

STEP ONE: DO NOT WITHDRAW SEC UNTIL YOU ARE APPROVED, EVEN IF AFTER 6/28/12. You will be automatically terminated at the firm and individual level and will need to cease business.

STEP TWO: Call the Regulator and ask for advice. It is likely that you have limited success in reaching the person working on your registration this week. These folks are working hard on your applications, but there is a tremendous effort here. If you get through, you will likely speak with an administrator. Explain the situation and ask for an email address. Demanding to speak to an examiner will just slow the process even more. If the examiners are answering all your calls, they are not reviewing your applications.

STEP THREE: Follow-up your phone call with an email to the respective securities division and/or specific individual. This will at least document that you take this situation serious and did not wait until this week to file.

STEP FOUR: Document everything. If the SEC forces a withdrawal for some reason, having the proper support will aid you in dealing with the matter. If it is not documented, it didn't happen.

STEP FIVE: Focus on your home state first. If you have multiple states you are waiting on, the primary is really most important.

We expect that there will be many firms that are not properly registered on 6/29/12. We do not expect that firms will be shut down by the SEC if they took reasonable steps to register promptly and are in line for review.

We expect a busy week. Stay calm!

Chris Winn , June 25, 2012
I just got a call from South Carolina saying they were not going to get to mine before the deadline and not to drop SEC registration. They are very proactive (which I believe is the point of a regulator) and said the SEC would notify me first and provide a timeline.

In all of the argument for FINRA or SEC, I believe we are missing the piece in regards to the States.
brentb843 , June 27, 2012

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