Proposed R 451.4.21 and R 451.4.29 are not required by state law or federal mandate. Section 411(8) of the Act,
MCL 451.2411(8), gives permissive authority to the bureau to establish a continuing education requirement for
investment adviser representatives registered under the Act. Section 411(3) of the Act, MCL 451.2411(3), provides
permissive authority to the Bureau to establish other record-keeping requirements on investment advisers.
B. If these rules exceed a federal standard, please identify the federal standard or citation, describe why it is
necessary that the proposed rules exceed the federal standard or law, and specify the costs and benefits arising out
of the deviation.
There is no federal standard for continuing education of investment adviser representatives because they are not
registered at the federal level. None of the proposed subrules in R 451.4.21 exceed a federal standard.
2. Compare the proposed rules to standards in similarly situated states, based on geographic location, topography,
natural resources, commonalities, or economic similarities.
Concerning proposed R 451.4.29, NASAA recently surveyed its member states asking if their member jurisdictions
planned to adopt NASAA's Investment Adviser Representative Continuing Education Model Rule. Of the 43
jurisdictions that responded to the survey, only 4 jurisdictions responded they were not planning to adopt NASAA’s
model rule at this time. The survey showed there are 11 states currently working toward a 2021 adoption with other
states to follow in 2022. Among the Midwest states, Wisconsin is currently pursuing the adoption of NASAA’s
Continuing Education model rule.
At this time, CSCL is unsure whether other similarly situated states plan to adopt NASAA’s policies and procedure
rule (R 451.4.29). This rule enhances uniformity with the federal regulatory structure for investment advisers and if
adopted by other states it will be uniform to their rules.
A. If the rules exceed standards in those states, please explain why and specify the costs and benefits arising out of
Proposed R 451.4.21 and R 451.4.29 incorporate the language of model rulesets which are designed for consistency
throughout the United States. R 451.4.21 and R 451.4.29 would not exceed the requirements from the states that have
adopted these model rulesets.
3. Identify any laws, rules, and other legal requirements that may duplicate, overlap, or conflict with the proposed
These rules will not duplicate, overlap, or conflict with any laws, rules, and other legal requirements. Proposed R
451.4.21 was designed to make investment adviser policies and procedures requirements consistent with SEC rules,
federal law, and the regulations of other state jurisdictions that regulate investment advisers. Proposed R 451.4.29 is
designed to be consistent with other state jurisdictions that adopt the NASAA model rule on investment adviser
representative continuing education.
A. Explain how the rules have been coordinated, to the extent practicable, with other federal, state, and local laws
applicable to the same activity or subject matter. This section should include a discussion of the efforts undertaken
by the agency to avoid or minimize duplication.
NASAA is an organization comprised of state and provincial securities regulators in the US, Canada, and Mexico.
NASAA regularly publishes model rules designed by the organization’s membership to ensure consistency and
uniformity among their membership’s jurisdictions. Before finalizing the model rules for continuing education of
investment adviser representatives and the policy and procedures final rule, NASAA requested feedback from its
members, industry stakeholders, and the federal government. CSCL reviewed the model rules, the comments
published on the NASAA website, and the federal law before filing a request for rulemaking for this rule set to avoid
and minimize potential duplication.
4. If MCL 24.232(8) applies and the proposed rules are more stringent than the applicable federally mandated
standard, provide a statement of specific facts that establish the clear and convincing need to adopt the more
Section 32(8) of the Administrative Procedures Act, MCL 24.232(8), does not apply.
5. If MCL 24.232(9) applies and the proposed rules are more stringent than the applicable federal standard,
provide either the Michigan statute that specifically authorizes the more stringent rules OR a statement of the
specific facts that establish the clear and convincing need to adopt the more stringent rules.
Section 32(9) of the Administrative Procedures Act, MCL 24.232(9), does not apply.