CSCL proposes to add a continuing education requirement for investment adviser representatives
registered under Uniformed Securities Act, MCL 451.2101 et seq. Investment adviser
representatives are vital to financial planning for many in Michigan, but unlike other financial
professionals, are not subject to a continuing education requirement. The North American
Securities Administrators Association (NASAA) has developed model rules for a continuing
education program for investment adviser representatives registered under the Michigan Uniform
Securities Act. The goal of the model rules is to ensure that investment adviser representatives
receive continuing education relevant to their duties and obligations under the act. Furthermore,
the continuing education program will be administered through NASAA, with tracking of the
continuing education being done by the Financial Industry Regulatory Authority, Inc. (FINRA).
FINRA operates the Central Registration Depository (CRD), which is the database that houses
registration information for investment adviser representatives in Michigan and other states.
Also, NASAA developed model rules that would require investment advisors to establish,
maintain, and enforce written policies and procedures tailored to a registrant’s business model.
The goal of this rule is to enhance regulatory compliance by minimizing conflicts and other risks
to the investing public, which serves to protect consumers of this industry and encourages
uniformity with federally registered investment advisers. This model rule will replace rule
451.4.21, the business continuity and succession planning requirement, but will keep substantive
requirements of 451.4.21.
8. Please cite the specific promulgation authority for the rules (i.e. department director,
commission, board, etc.).
Section 411(3) of the Uniform Securities Act, MCL 451.2411(3), requires broker-dealers and
investment advisers registered under the act to make and maintain accounts, correspondence,
memoranda, papers, books, and other records required by rule.
Section 411(8) of the Uniform Securities Act, MCL 451.2411(8), states that a rule may require
individuals registered under the act to participate in a continuing education program approved by
the securities and exchange commission and administered by a self-regulatory organization, or in
the absence of such a program, a rule or order under this act may require continuing education for
an individual registered as an investment adviser representative. No such program currently exists
for investment adviser representatives.
Section 605 of the Uniform Securities Act, MCL 451.2605, allows the securities administrator to
adopt and amend rules necessary or appropriate to carry out the act.
A. Please list all applicable statutory references (MCLs, Executive Orders, etc.).
Sections 201, 202, 202a, 203, 304, 306, 401, 403, 405, 406, 410, 411, 412, 469, 502, 504, and 605
of the Uniform Securities Act, 2008 PA 551, MCL 451.2201, 451.2202, 451.2202a, 451.2203,
451.2304, 451.2306, 451.2401, 451.2403, 451.2405, 451.2406, 451.2410, 451.2411, 451.2412,
451.2469, 451.2502, 451.2504, and 451.2605, and Executive Reorganization Order No. 2012-6,
B. Are the rules mandated by any applicable constitutional or statutory provision? If so, please
The rules are not mandated by any applicable constitutional or statutory provision.
9. Please describe the extent to which the rules conflict with or duplicate similar rules,
compliance requirements, or other standards adopted at the state, regional, or federal level.
These rules will not conflict with or duplicate similar rules, compliance requirements, or other
standards adopted at the state, regional, or federal level.