Series 63: Federal Vs. State Registration

Federal vs. State Registration

While investment advisers are always subject to both the laws of their state and federal securities laws, the jurisdiction (state vs. federal) with which they must register ultimately depends on the size and nature of their advisory practice. In short, the bigger an adviser’s practice and the broader its geographical reach, the more likely it is to require federal registration. Advisers who register at the federal level are called Federal Covered Advisers. The law that separated the registration process into federal and state registration is called the National Securities Markets Improvement Act ( NSMIA).

The most common factor for determining where someone needs to register is how much client money an adviser has under management. In most cases, if an adviser has got less than $100 million in client assets under their care, they must register on a state level. If they’ve got over $100 million in assets, then federal registration is required.1

Additional factors that may result in required federal registration include:

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