Assessment of Public Comment on Proposed Changes to 13 NYCRR 11

Sep 25, 2026

Assessment of Public Comment on Proposed Changes to 13 NYCRR 11 summarizes written comments submitted to the Department of Law in response to a proposal to amend 13 NYCRR 11. The document records each comment and the Department’s response, addressing federal preemption risks, including how “federally covered investment advisers” are excluded from New York registration and how “investment adviser representatives” and “supervisors” are defined for registration purposes. It also discusses proposed wording for the definition of “solicitor” and the registration duty triggers.

LanguageEnglish

CategoryExam

FormatPDF

Pages6

Reading Time15 min

AccessFree to download

Comment 1

Response 1

Comment 2

Response 2

Comment 3

Response 3

Comment 4

Assessment of Public Comment on Proposed Changes to 13 NYCRR 11 The below represents the substance of comments sent to the Department of Law (The “Department”) in response to its proposal to amend 13 NYCRR 11 as summarized in the April 15, 2020 edition of the New York State Register (the “Part 11 Proposal”) . The final rule adopting the Part 11 Proposal is referred to herein as the “Adopted Rule.” Below each comment the Department has responded. 1. Comment: A few commenters requested that the Department clarify that the registration requirements for investment advisers under Section 11.4 of the Part 11 Proposal do not apply to Federally Covered Investment Adviser (“FCIAs”) or to those who otherwise are excluded or exempted under Section 11.13. The commenters also request clarification that an Investment Adviser Representative (“IAR”) must register under Section 11.4 only where (1) the IAR represents an Investment Adviser who is required to register with the State of New York, and (2) the IAR represents a Federally Covered Investment Adviser (“FCIA”) and has a place of business in the State of New York. The commenters noted that the Part 11 Proposal, as written, could be construed to apply in scenarios that would be preempted under Section 203A of the federal Investment Advisers Act of 1940 (15 U.S.C. 80b-3a) and 17 CFR § 275.203A-3 (“Rule 203A-3”) thereunder. Response: The Department has clarified the Adopted Rule to address any risk of federal preemption in the application of New York’s registration requirements. First, Section 11.13(a) is amended to clearly delineate that FCIAs are excluded from the definition of“investment adviser” consistent with the definition set forth in NY GBL § 359-eee and therefore are not subject to registration in New York. Section 11.13(b) will continue to provide separately for those who may be included in the definition of“investment adviser,” but who are exempt from registration . Second, in Section 11.12, the proposed definition of“investment adviser representative” is modified to align explicitly with the requirements of Rule 203A-3 when applied to IARs for FCIAs. 2. Comment: A few commenters assert that the proposed definition of“investment adviser representative” in Section 11.12 of the Part 11 Proposal is overly broad because it includes “any natural person supervising an investment adviser representative,” which unintentionally could subject every individual in a supervisory chain to registration in New York. Two commenters proposed a narrower definition to include only direct supervisors of those individuals who engage in the specific services that would constitute IAR services, rather than any supervisor. Similarly, another commenter urges that the Department amend Sections 11.4 and 11.6 of the Part 11 Proposal to prevent New York’s registration requirements from being misapplied to“supervisors” and “principals” at FCIAs who are not themselves IARs due to potential preemption under federal law. Response: The Department has clarified the Adopted Rule to address any risk of federal preemption in the application of New York’s registration requirements. The definition of “investment adviser representative” has been modified to strike the language “[a]ny natural person supervising any investment adviser representative is deemed to be an investment adviser representative and is subject to the same examination and registration requirements….” To narrow registration to direct supervisors ofIARs, the Department has amended Section 11.12 to define specifically the term “supervisor” as a “natural person who directly supervises one or more natural persons associated with an investment adviser in their capacity as investment adviser representatives.” The term also incorporates the updated definition of“investment adviser” that is consistent with GBL § 359-eee to avoid preemption by federal law. 3. Comment: One commenter urged the Department to modify the proposed definition of“so

FAQs

What is the purpose of this document?

It summarizes the substance of public comments submitted to the Department of Law regarding proposed amendments to 13 NYCRR 11 and records the Department’s responses to each comment.

How does the Department address federal preemption concerns regarding registration requirements?

It clarifies that federally covered investment advisers (FCIAs) are excluded from the definition of “investment adviser” in New York, and it modifies the definition of “investment adviser representative” to align with Rule 203A-3 where applied to IARs for FCIAs.

How has the definition of “investment adviser representative” been narrowed for supervisory registration?

The Department modified the definition by removing language that deemed any supervising natural person to be an IAR representative, and it defines “supervisor” as a person who directly supervises one or more natural persons associated with an investment adviser in their capacity as IARs.

Sep 25, 2026

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