Effective January 14, 2026, the Colorado Division of Securities has adopted amendments to its rules under the Colorado Securities Act, including certain rules (the “Colorado Rules”) affecting Colorado licensed investment advisers and Colorado Licensed Investment Adviser Representatives (“IARs”). These amendments will affect how individuals can qualify to serve as an IAR and the ability of such IARs to keep exam results “alive” while out of the industry. These amendments are consistent with those adopted in 2023 by the North American Securities Administrators Association(“NASAA”), which, among other things, promulgates model statutes, rules, and regulations that seek to maintain consistency among the states.
What Changed?
- In light of the Investment Adviser Association no longer offering the Chartered Investment Counselor (“CIC”) designation, Colorado has removed the CIC designation from the list of credentials that can be used in lieu of the examination requirement to qualify as an IAR. Any individual who is currently licensed in Colorado as an IAR will not be affected by the removal of the designation so long as such license remains in effect. Any individual who is not licensed in the state and intends to rely on their CIC designation should instead consider relying on their designation as a Chartered Financial Analyst (“CFA”) granted by the Association for Investment Management and Research, since all CIC holders must also be a CFA. Alternatively, individuals can consider other recognized pathways to be properly licensed as an IAR in the state of Colorado, such as by obtaining a satisfactory score on the Series 65 exam, the Series 66 plus Series 7 exams, or by holding a different eligible credential, such as a Chartered Financial Consultant (“ChFC”) certification granted by The American College.
- Colorado also adopted NASAA’s Investment Adviser Representative Exam Validity Extension Program (the “Program”). Under the Program, so long as an individual meets the specified criteria described below, any person who terminates their IAR license may nevertheless maintain the validity of their Series 65 exam or the IAR portion of the Series 66 exam despite no longer being employed or associated with an investment adviser or federal covered investment adviser for up to five (5) years following their termination.[1] In order to rely on this new rule, the IAR must:
- Have previously taken and successfully passed the examination for which they seek to rely on for the purposes of licensure;
- Have previously been licensed as an IAR for at least one (1) year immediately preceding the termination of their IAR license;
- Not be subjected to statutory disqualification under Section 3(a)(39) of the Securities Exchange Act of 1934 while licensed as an IAR or at any period after termination of the license;
- Elect to participate in the Program within two (2) years from the effective date of the termination of the IAR license;
- Be compliant with, and not have a deficiency under, the IAR continuing education program under Colorado Rule 51-4.4.1(IA) at the time the IAR license becomes ineffective; and
- Complete on an annual basis on or before December 31 of each year in which the IAR is relying on the Program:
- Six (6) Credits of IAR Continuing Education (“CE”) Ethics and Professional Responsibility Content offered by an Authorized Provider as defined in Colorado Rule 51-4.4.1(IA)(J)(2), including at least three (3) hours covering the topic of ethics, and
- Six (6) Credits of IAR CE Products and Practice Content offered by an Authorized Provider as defined in Rule 51-4.4.1(IA)(J)(2).
Anyone who elects to participate in the Program must complete the credits specified in paragraph (6) above for each calendar year after their IAR license becomes ineffective, regardless of when they elect to participate in the Program. However, individuals who comply with the Financial Industry Regulatory Authority (“FINRA”) Maintaining Qualification Program under FINRA Rule 1240(c) will be considered in compliance with paragraph (6) above as well.
Key Takeaways for Colorado Licensed Investment Advisers and Licensed IARs
- If you engage an individual with prior industry experience, consider adding to your intake process a method for determining whether they were relying on the Program for the basis of a non-expired license. In these instances, seeking documentation to confirm Program compliance by reviewing records maintained by that individual while a part of the Program as well as other third-party sources, principally as it relates to statutory disqualification and continuing education, would be advised.
- If you are an individual leaving the industry and intending to return within five (5) years, evaluate the positive and negative ramifications of enrolling in the Program. If you decide to enroll, pay close attention to the required continuing education requirements to remain in compliance with the Program and to remain eligible to once again become a fully licensed IAR without having to sit for examinations or otherwise seek exemptive relief.
For additional guidance or support, please reach out to a member of our Asset Management Group or another member of the Davis Graham Team.
[1] 3 CCR 704-1-51-4.4.2(IA).