Protecting Your Practice. Vessenes Katherine

Чтение книги онлайн.

      [A]ny person who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities, or who, for compensation and as part of a regular business, issues or promulgates analyses or reports concerning securities; but does not include:

      a. A bank or any bank holding company as defined in the Bank Holding Company Act of 1956, which is not an investment company, b. Any lawyer, accountant, engineer, or teacher whose performance of such services is solely incidental to the practice of his profession, c. Any broker or dealer whose performance of such services is solely incidental to the conduct of his business as a broker or dealer and who receives no special compensation therefore,

      • You meet the definition of Investment Adviser21, and

      • You have more than $30 million of assets under management, and

      • You are not among the following who are excluded from the Definition:22

      – banks

      – broker/dealers, lawyers, accountants, teachers, and others whose advice about securities is incidental to their business

      – certain publishers, or

      • You are not among the following and others who are exempted from registration:23

      – Your principal place of business is in one state, and you give no advice regarding securities on a listed national exchange

      – Your clients are limited to insurance companies

      – You had fewer than 15 clients in the preceding 12 months and do not hold yourself out as an investment adviser.

      d. A publisher of any bona fide newspaper, news magazine, business or financial publication of general and regular circulation, e. Any person whose advice, analyses, or reports relate to no securities other than securities which are direct obligations of or obligations guaranteed as to principal or interest by the United States, or securities issued or guaranteed by Corporations in which the United States has a direct or indirect interest which shall have been designated by the Secretary of the Treasury, pursuant to Section 3(a)(12) of the Securities Exchange Act of 1934, as exempted securities for the purposes of that Act, or f. Such other persons not within the intent of this paragraph, as the commission may designate by rules and regulations or order.

      • Provide advice, issue reports, or analyze securities • Are in the business of providing such services

      • Provide such services for compensation.

      GEORGE, A LIFE INSURANCE salesperson, holds himself out to be an estate planner. In performing his services, he reviews a client’s balance sheet and makes recommendations for specific insurance products. At a meeting with Mr. and Mrs. Client, he makes the following recommendation: “Since your ABC stock has been underperforming for the last five years, I recommend selling that stock and placing the proceeds in a whole life insurance policy.” George receives no fees for investment advice and no commission from the sale of the ABC stock. He will, however, receive commissions from the sale of the whole life insurance policy.

      Question: Has George received compensation under the rule and is he required to be an RIA?

      Answer: Yes. George gave advice regarding securities and he was compensated by an insurance commission. George has just committed a felony, could be facing five years in jail, and probably does not even know it. George could eliminate this problem completely either by registering as an investment adviser or by limiting all his recommendations to insurance and avoiding any advice about securities.