Articles Tagged with Investment Adviser Representative

On October 13, 2011 the Georgia Secretary of State published proposed rules under the Georgia Uniform Securities Act of 2008 (“the 2008 Act”). Among the proposed rules are twenty (20) rules governing investment advisers and investment adviser representatives.

Although many of the proposed rules are consistent with the applicable rules under the prior Georgia Securities Act of 1973, quite a few of the proposed rules are new, and are designed to respond to the changing business and regulatory environment, including passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Firms currently registered in Georgia should pay careful attention to the regulatory changes. In addition, formerly SEC-registered advisers that are switching to Georgia registration will find the Georgia regulatory landscape, under both the old rules and the new ones, if adopted, to be quite different than what they are accustomed to.
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The Georgia Secretary of State issued an Implementation Order that became effective yesterday (December 31, 2010) excluding many solicitors from the definition of “Investment Adviser Representatives,” thereby eliminating the registration requirement for those coming within the exclusion. Entered pursuant to the Georgia Uniform Securities Act of 2002, Secretary of State Uniform Act Implementation Order No. 2010-4 substantially preserves, but slightly modifies, the practice that prevailed under the Georgia Securities Act of 1973.

Under the Georgia Uniform Securities Act of 2008, an individual associated with an investment adviser who “receives compensation to solicit, offer, or negotiate for the sale of investment advice” must register as an “investment adviser representative.”

The Implementation Order, however, excludes from the definition of “investment adviser representative” a solicitor that does not provide investment advice and who meets a number of other requisites. The effect of the Order is to allow persons who typically provide client solicitation services under SEC Rule 206(4)-3, without advising solicited clients, to avoid registration in Georgia. Care should be taken to insure that the solicitor who seeks benefit of the exclusion follows a number of unique provisions of the Georgia order, among them that compensation can be received for no more than 10 clients in a calendar year, unless the solicitor does nothing more than provide a list of investment advisers without determining or representing the advisability of a prospective client entering into a relationship with a particular adviser. Attorneys and CPAs may also solicit persons with whom they have existing relationships.