§ 359-EEE — Definitions

§ 359-eee. Definitions. Registration requirements for investment\nadvisers. 1. The following terms, whenever used or referred to in this\narticle, shall have the following meaning unless a different meaning\nclearly appears from the context:\n (a) "Investment adviser" shall mean any person who, for compensation,\nengages in the business of advising members of the public, either\ndirectly or through publications or writings within or from the state of\nNew York, as to the value of securities or as to the advisability of\ninvesting in, purchasing, or selling or holding securities, or who, for\ncompensation and as a part of a regular business issues or promulgates\nanalyses or reports concerning securities to members of the public\nwithin or from the state of New York. "Investment adviser" shall not\ninclude:\n (1) A bank or trust company unless it is considered an investment\nadviser under the federal investment advisers act of 1940;\n (2) A lawyer, accountant, engineer or teacher whose performance of\nthese services is solely incidental to the practice of this profession;\n (3) A broker or dealer whose performance of these services is solely\nincidental to the conduct of his business as broker or dealer and who\nreceives no special compensation for them;\n (4) A publisher of any bona fide newspaper or news magazine;\n (5) A person who sold, during the preceding twelve month period,\ninvestment advisory services to fewer than six persons residing in this\nstate, exclusive of financial institutions and institutional buyers as\nmay be defined by rule or regulation of the attorney general;\n (6) A federally covered investment adviser;\n (7) A person who would otherwise be required or permitted to register\nwith the federal securities and exchange commission as an investment\nadviser were it not for the exemption from registration under section\n203(b)(3) of the federal Investment Advisers Act of 1940. For purposes\nof this exemption, the provisions of Rule 203(b)(3)-1 thereunder shall\napply; and\n (8) Such other person as may be excluded from the definition of\ninvestment adviser or federally covered investment adviser or exempted\nfrom the provisions of subdivision two of this section by rules or\nregulations prescribed by the attorney general.\n (b) A "person" under this section shall mean a natural person,\ncorporation, company, partnership, trust or association.\n (c) "Federally covered investment adviser" shall mean a person who is\nregistered under section 203 of the federal investment advisers act of\n1940, 15 U.S.C. § 80b et seq. Such term shall not include any person who\nis excluded from the term "investment adviser" pursuant to subparagraphs\none through five, seven, and eight of paragraph (a) of this subdivision.\n 2. (a) It shall be unlawful for any investment adviser, as defined in\nthis section, to engage as such within or from the state of New York\nunless and until such person shall have filed with the department of law\na registration statement as provided herein.\n (b) The attorney general may prescribe an alternative filing method\nthat facilitates a central registration depository whereby investment\nadvisers or federally covered investment advisers can centrally or\nsimultaneously register or submit a notice filing, as applicable, and\npay fees for all states in which they plan to transact business which\nrequire registration or notice filings. The attorney general is hereby\nauthorized to enter into an agreement or otherwise facilitate such\nalternative method with any national securities association, national\nsecurities exchange, national association of state securities\nadministrators or similar association or agents thereof to effectuate\nthe provisions of this subdivision.\n 3. A registration statement relating to persons who must register\nunder this section, to be known as the "investment adviser statement"\nshall contain such information pertaining to the business history for\nthe last preceding five years, criminal record, educational background\nof the applicant and his or its partners, officers, directors or other\nprincipals thereof deemed pertinent by the attorney general. The\nattorney general may prescribe forms for the use of such applicants and,\nas a condition of registration, may by rule or regulation prescribe that\nall applicants or any class of applicants, as well as any persons who\nrepresent or will represent an investment adviser in doing any of the\nacts that make such person an investment adviser, shall undertake and\nsuccessfully complete examination requirements. The attorney general may\nby rule or regulation dispense with the requirement of the above\ninformation from persons already filed as brokers or dealers under this\narticle who constitute investment advisers under this section. The\nattorney general may by rule or regulation designate other\nqualifications and credentials that will be accepted in lieu of meeting\nthe examination requirement.\n 4. (a) The registration or notice filing of persons required to file\nunder this section shall be for a period of one year, commencing on\nJanuary first, two thousand three, provided that registrations in effect\nprior to such date shall be deemed effective until such date. Renewal\nstatements shall be filed within sixty days prior to each following\nJanuary first. Initial filings may be made after January first of any\nyear by any person whose activities require registration under this\nsection, but such filing must be made within ten days prior to engaging\nin such activities.\n (b) A federally covered investment adviser shall file with the\nattorney general, prior to acting as a federally covered investment\nadviser in this state, such documents as have been filed with the\nsecurities and exchange commission as the attorney general, by rule or\nregulation, prescribes.\n 5. The attorney general by rule or order may provide for the filing of\nprescribed updates and amendments which shall contain such information\nas the attorney general may deem necessary to keep reasonably current\nthe information on file.\n 6. The attorney general may from time to time in the public interest\nmake, amend and rescind such rules, regulations and forms as are\nnecessary to carry out the provisions of this section, including rules,\nregulations and forms governing registration statements and\napplications. For the purpose of such rules, regulations and forms, the\nattorney general may classify securities, persons and matters within his\njurisdiction and may prescribe different forms and requirements for\ndifferent classes.\n 7. The department of law shall collect the following fees: two hundred\ndollars for initial and renewal investment advisory statements submitted\nby investment advisers and federally covered investment advisers.\n 8. All investment advisers as defined herein and all brokers or\ndealers in securities (except those brokers or dealers whose performance\nof investment advisory services is solely incidental to the conduct of\ntheir business as brokers or dealers and who receive no special\ncompensation for such services) shall file with the department of law of\nthe state of New York at its New York city offices on the date of issue\nor publication to the investing public one copy of any prospectus,\npamphlet, circular, form letter or other sales literature addressed or\nintended for general distribution to clients or prospective clients of\nan investment adviser and one copy of any advertisement offering\ninvestment advisory services to such clients or prospective clients. The\nattorney general shall be empowered to destroy all literature and\ndocuments submitted under this subdivision.\n 9. (a) Every person required to register under this section shall\nannually file such financial or other reports as the attorney general by\nrule or regulation prescribes.\n (b) Except as prohibited by federal law, the attorney general may by\nrule or regulation require investment advisers as defined herein:\n (1) To satisfy specified minimum financial responsibility\nrequirements;\n (2) To file with the attorney general specified financial and other\ninformation;\n (3) To make and maintain specified records and to preserve such\nrecords for five years or such other period as may be specified.\n 10. If the information contained in any registration statement filed\nwith the attorney general under this article becomes inaccurate or\nincomplete in any material respect, the registrant shall promptly file\nwith the department of law updates and amendments. The attorney general\nmay prescribe by regulations the circumstances under which the updates\nand amendments are to be filed pursuant to this section and provide\nforms therefor.\n