|NEWARK – After months of preparation, including proactive outreach to the investment community and the hiring and training of new staff, the New Jersey Bureau of Securities begins regulating additional Investment Advisers who are switching from federal to state oversight.
As part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, mid-sized investment adviser firms with assets under management between $25 million and $100 million are switching from federal to state regulation. The Bureau previously regulated Investment Adviser firms under $25 million. Today is the deadline for investment advisers to switch.
In New Jersey, the Bureau of Securities has received registration applications from 108 Investment Adviser firms that are switching from federal Securities and Exchange Commission (SEC) regulation. Of those firms, 63 are based in New Jersey. The Bureau anticipates that additional late applications from switching investment advisers may be received over the next few months.
“Protecting investors and their hard-earned dollars remains the focus of our Bureau of Securities. The Christie administration recognizes the importance of fighting financial fraud, which is why additional staff has been added to the Bureau in preparation for this transfer of regulatory oversight to the states,” Attorney General Jeffrey S. Chiesa said.
The Bureau of Securities added four employees this year, as it prepared for its expanded regulatory role. The number of Investment Adviser firms based in New Jersey now under Bureau regulatory authority has increased by 8% because of the switch from federal oversight.
“Financial fraud remains a threat to investors in the post-Bernie Madoff world. We have a robust Bureau of Securities, able to act on alleged fraud through its in-house staff of investigators,” said Eric T. Kanefsky, Acting Director of the State Division of Consumer Affairs. “We are committing to protecting investors and the savings they have built up through the years.”
The N.J. Bureau of Securities is the state’s securities regulator, administering the Uniform Securities Law and its regulations. The Bureau regulates firms and individuals and maintains a regulatory staff, field examination staff and investigators. The Bureau is a member of the North American Securities Administrators Association and works with other state securities regulators on joint investigations and areas of concern.
“The Investment Adviser switch is the most significant change in the SEC-state securities partnership in decades and the Bureau of Securities is fully prepared to take on the additional responsibilities. The SEC can focus its resources on larger firms now that state securities regulators are taking on additional regulatory oversight of mid-sized Investment Adviser firms,” said Abbe R. Tiger, Chief of the N.J. Bureau of Securities.
Bureau staff perform “desk exams” of registered investment advisers as well as conduct on-site examinations of offices maintained by financial firms.
The Bureau registers broker/dealers, investment advisers and individuals working in the state’s investment industry, as well as the securities they market or sell to investors. As part of performing due diligence, investors are encouraged to contact the Bureau to inquire whether the person with whom they are dealing, and the security being offered, are registered. Investors may also learn if the investment professional has been the subject of past disciplinary actions by regulators.
The Bureau of Securities can be contacted toll-free within New Jersey at 1-866-I-INVEST (1-866-446-8378) or from outside New Jersey at 973-504-3600. The Bureau's website is located at www.njsecurities.gov .
Follow the Division of Consumer Affairs on Facebook, and check our online calendar of upcoming Consumer Outreach events.