Short Takes: State Regulator Group Beefs Up Adviser Test

The umbrella group for state securities regulators said recently that it will require new investment advisers to take a stricter exam.

Starting Jan. 1, new advisers must take a 130-question competency exam that covers economics, investment products and strategies, and ethics. The test will replace the 75-question series 65 exam that focuses on state- specific securities laws and ethics.

"Because of the threshold, the charlatan has a much more difficult time just hanging out a shingle," Philip A. Feigin, executive director of the North American Securities Administrators Association Inc., said in an interview here Monday.

Some states may grandfather-in investment advisers who are already registered, he said.

The association has also developed an exam to be used in states where investment advisers are required to be dually licensed as stockbrokers. That exam, the series 66, will only be given to those who have passed the series 7 exam, which covers mutual funds and other investments and is administered by the National Association of Securities Dealers Inc.

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