February 15, 1991
TO: INVESTMENT ADVISERS COMMITTEE NO. 6-91
RE: INSTITUTE RECOMMENDS ADVISER EXAMINATION RELIEF
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On February 14, 1991, the Institute requested all state
securities administrators to review their investment adviser
examination regulations and revise those which require investment
advisers to meet broker-dealer qualification standards. The
Institute also recommended that until the problems associated
with the Series 65 examination are corrected, any state which
requires the Series 65 should grant liberal waivers from the
examination for individuals who have demonstrated competence in
the securities industry. In addition, a suggested permanent
class exemption from examination requirements for employees of
established investment adviser firms with stringent internal
supervisory and training programs and whose clients are limited
to "sophisticated investors" is included in the Institute’s
recommendation.
In a separate letter to the NASAA Board of Directors and
Uniform Examinations Committee, the Institute urged release of
the Series 65 question databank to an industry review panel. The
letter highlights the continuing problems with the Series 65,
including its overbroad scope and confusing question format. In
order to encourage NASAA to release the Series 65 questions, the
Institute noted that it is the NASD’s practice to release
questions on its examinations to an industry review panel in
order to delete poor questions.
A copy of the letter to all state securities
administrators, which includes a copy of the letter to the NASAA
Board of Directors and Uniform Examinations Committee, is
attached. We will keep you informed of developments.
W. Richard Mason
Assistant General Counsel
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