Employees of investment advisers may be required to register (i) as investment adviser representatives (IARs) with the states in which they have a place of business or (ii) with the CFTC as associated persons of a CPO or CTA.

Investment advisers representatives

IARs may be required to register in states where they maintain a place of business. An IAR is defined as a partner, officer, director or employee of an investment adviser who has more than five clients who are natural persons and more than ten percent of whose clients are natural persons. Natural persons who are qualified clients are not counted towards these thresholds. As the definition of IAR only includes persons providing investment advice to natural persons, IARs who provide advice only to funds will not be required to register as IARs.

IARs register by filing Form U4 with the Central Registration Depository. IARs are generally required to have passed wither the Series 65 examination or bother the Series 7 and Series 66 examinations.

Associated persons

An associated person is an individual who solicits orders, customers or customer funds (or who supervises persons so engaged) on behalf of a CTA or CPO. An associated person is, in effect, anyone who is a salesperson or who supervises salespersons for any of these categories of individuals or firms.

CPOs and CTAs are required to file the following in relation to their associated persons:

  • A completed online Form 8-R
  • Fingerprint cards
  • A Principal Application Fee of $85.00
  • An Associated Person Application Fee of $85.00