Securities Bulletin

              The close of 2001 brought the first full implementation of the
Investment Adviser Registration Depository (IARD). Mandated
by Congress, the system was developed by the U.S. Securities
and Exchange Commission (SEC) with input from industry
firms and representatives from state securities regulators.
The IARD allows investment advisers to meet their filing
obligations with both federal and state securities
administrators in one electronic transaction. Use of the system
was mandated for all SEC-registered investment advisers
(notice filers), which total more than 8,000 firms nationwide.
The primary goal of the IARD is to simplify the process under
which SEC-registered investment advisers and, in Illinois, state
investment advisers can apply for registration and submit
amendments to or withdraw from registration. Benefits of the
new system include:
❍ elimination of virtually all paper filings;
❍ minimizing errors that cause processing delays (i.e., no
signature, omission of certain required information)
because the new system requires complete filings prior to
electronic processing;
❍ elimination of multiple paper filings because all changes
associated with the entity (i.e., address changes,
amendments) will be filed electronically; and
❍ electronic payment of required state notice filing fees.
As part of the first phase of implementing the IARD in Illinois,
all investment adviser renewals — both notice filers and state-registered
investment advisers — were moved to Dec. 31,
2001, to align with the end-of-year IARD renewal process.
The next phase of implementation includes filings of
investment adviser representatives employed by federally
registered notice filers. Investment adviser representatives
should be able to make transitional filings on the IARD
beginning in late spring.
The IARD is patterned after the Central Registration Depository,
developed in the early 1980s for processing most dealer and
registered representative registration-related transactions. The
National Association of Securities Dealers-Regulation operates
the IARD system on contract with the SEC and the North
American Securities Administrators Association.
SECURITIES bulletin
I am pleased to provide you this new, quarterly
newsletter as a service of my office’s Securities
Department.
Illinois has some of toughest securities laws on
the books. Through our rigorous registration of
securities dealers and an active public
education program, the securities industry is now held to the
highest possible standards of business practice. The investing
public can be assured we are doing everything in our power
to help protect them against unscrupulous scam artists.
I hope you find this publication a helpful resource for your
business and your clients. Should you have any suggestions
for future issues, or if you have a question about your broker
or investment adviser, please call my office toll-free at 800-
628-7937 or the Spanish toll-free line at 888-231-1175.
Jesse White
Secretary of State
Spring 2002
Investor Adviser Registration
Depository up and running
IN
THIS
ISSUE
• INVESTOR ADVISER REGISTRATION DEPOSITORY •
• PRIME BANK SCAMS •
• INVESTOR EDUCATION •
• FINANCIAL LITERACY PROGRAM •
• SECURITIES ENFORCEMENT •
A NEWSLETTER OF THE ILLINOIS SECURITIES DEPARTMENT • SECRETARY OF STATE JESSE WHITE
Series 63 exam expanded
Effective April 1, 2002, the Series 63 Exam (Uniform
Securities Agent State Law Exam) will be updated and
expand from 50 to 60 questions, five of which will not
count toward the final score. The score required to pass the
exam will remain at 70 percent.
The Series 63 Exam covers principles of state securities
regulations reflected in the Uniform Securities Act, with
amendments adopted by the Northern American Securities
Administrators Association (NASAA). It provides a basis for
state securities administrators to determine an applicant’s
knowledge and understanding of state laws and regulations.
Because of the additional questions, the time allowed for
completing the exam has been increased from 60 to 75
minutes. The price of the exam also has increased from $60
to $70.
For more information, please contact: NASAA, 10 G St. N.E.,
Suite 710, Washington, D.C. 20002, 202-737-0900.