The purpose and effect is to incorporate the North American Securities Administrators Association’s (“NASAA”) model rule concerning its Examination Validity Extension Program (“EVEP”) for associated persons of investment ....

 

DEPARTMENT OF FINANCIAL SERVICES

Securities

RULE NO.:RULE TITLE:

69W-600.0016:Application for Registration as an Investment Adviser (State Registered)

69W-600.0024:Application for Registration as an Associated Person (Investment Adviser and Federal Covered Advisor)

PURPOSE AND EFFECT: The purpose and effect is to incorporate the North American Securities Administrators Association’s (“NASAA”) model rule concerning its Examination Validity Extension Program (“EVEP”) for associated persons of investment advisers and federal covered advisers.

SUMMARY: The Rules are amended to incorporate the National Association of Securities Administrators Association’s (“NASAA”) model rule concerning the Examination Validity Extension Program (“EVEP”) for associated persons of investment advisers and federal covered advisers. Participation in the EVEP is voluntary. Participants must meet certain eligibility criteria, pay NASAA an annual participation fee, and satisfy applicable continuing education requirements. Individuals who terminate their registrations with investment advisers or federal covered advisers and elect to participate in the EVEP may have a maximum of five years, instead of two years, in which to reregister with a firm without having to requalify by exam.

SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS AND LEGISLATIVE RATIFICATION:

The Agency has determined that this will not have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has not been prepared by the Agency.

The Agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs or if no SERC is required, the information expressly relied upon and described herein: The Agency expressly relies on an analysis of potential economic impact conducted by persons with subject matter knowledge of these rules.

Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.

RULEMAKING AUTHORITY: 517.03, 517.12, FS.

LAW IMPLEMENTED: 517.12, FS.

IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE SCHEDULED AND ANNOUNCED IN THE FAR.

THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Ryann White, Office of General Counsel [phone], [e-mail]

 

THE FULL TEXT OF THE PROPOSED RULE IS:

69W-600.0016 Application for Registration as an Investment Adviser (State Registered).

(1) through (5) No change.

(6) Examinations/Qualifications Requirements.

(a) through (d) No change.

(e) Examination Validity Extension Program: Notwithstanding paragraph (b), a principal who terminates their registration as an associated person of an investment adviser may maintain the validity of their Series 65 or the investment adviser representative portion of the Series 66, as applicable, without being employed by or associated with an investment adviser or federal covered adviser for a maximum of five years following the termination of the effectiveness of the associated person’s registration if the individual meets all of the following:

1. The individual previously took and passed the examination for which they seek to maintain validity under this paragraph;

2. The individual was registered as an associated person of an investment adviser or federal covered adviser for at least one year immediately preceding the termination of the associated person’s registration with an investment adviser or federal covered adviser;

3. The individual was not subject to a statutory disqualification as defined in Section 3(a)(39) of the Exchange Act (15 U.S.C. §78c(a)(39)), which is incorporated by reference in Rule 69W-600.002, F.A.C., while registered as an associated person of an investment adviser or federal covered adviser or at any period after termination of such registration;

4. The individual elects to participate in the Exam Validity Extension Program (“EVEP”)  under this paragraph within two years from the effective date of the termination of the associated person’s registration with an investment adviser or federal covered adviser;

5. The individual does not have a deficiency under s. 517.1214, F.S., at the time the associated person’s registration becomes ineffective;

6.a. The individual maintains annual compliance with s. 517.1214, F.S.

b. An individual who complies with the FINRA Maintaining Qualification Program

under FINRA Rule 1240(c) shall be considered in compliance with Section 517.1214(2)(b), F.S. 

(f) The examination requirement for an associated person of an investment adviser designated as principal shall not apply to a principal who currently holds one of the following professional designations:

1. through 5. No change.

(7) through (12) No change.

Rulemaking Authority 517.03(1), 517.12 FS. Law Implemented 517.12 FS. History–New 12-29-15, Amended 11-26-19, 1-18-21, 2-14-23,        .

 

69W-600.0024 Application for Registration as Associated Person (Investment Adviser and Federal Covered Adviser).

(1) through (5) No change.

(6) Examinations/Qualifications.

(a) through (d) No change. 

(e) Examination Validity Extension Program: Notwithstanding paragraph (b), an associated person who terminates their registration as an associated person of an investment adviser may maintain the validity of their Series 65 or the investment adviser representative portion of the Series 66, as applicable, without being employed by or associated with an investment adviser or federal covered adviser for a maximum of five years following the termination of the effectiveness of the associated person’s registration if the individual meets all of the following:

1. The individual previously took and passed the examination for which they seek to maintain validity under this paragraph;

2. The individual was registered as an associated person of an investment adviser or federal covered adviser for at least one year immediately preceding the termination of the associated person’s registration with an investment adviser or federal covered adviser;

3. The individual was not subject to a statutory disqualification as defined in Section 3(a)(39) of the Exchange Act (15 U.S.C. §78c(a)(39)), which is incorporated by reference in Rule 69W-600.002, F.A.C., while registered as an associated person of an investment adviser or federal covered adviser or at any period after termination of such registration;

4. The individual elects to participate in the Exam Validity Extension Program (“EVEP”)  under this paragraph within two years from the effective date of the termination of the associated person’s registration with an investment adviser or federal covered adviser;

5. The individual does not have a deficiency under s. 517.1214, F.S., at the time the associated person’s registration becomes ineffective;

6.a. The individual maintains annual compliance with s. 517.1214, F.S.

b. An individual who complies with the FINRA Maintaining Qualification Program

under FINRA Rule 1240(c) shall be considered in compliance with Section 517.1214(2)(b), F.S. 

(f) The examination requirement for associated persons of an investment adviser or federal covered adviser shall not apply to an applicant who currently holds one of the following professional designations:

1. through 5. No change.

(7) through (10) No change.

Rulemaking Authority 517.03(1), 517.12 FS. Law Implemented 517.12 FS. History–New 12-29-15, Amended 9-25-18, 11-26-19, 1-18-21, 2-14-23,           .

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Alisa G. Goldberg, Director, Division of Securities

NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Financial Services Commission

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: December 19, 2023

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: August 11, 2023