Ariz. Admin. Code § 14-6-210

Current through Register Vol. 30, No. 45, November 8, 2024

Section R14-6-210 - Licensure of Investment Adviser Representatives

A. The definition of investment adviser representative in A.R.S. § 44-3101 includes an individual employed by a federal covered adviser only if the individual has a place of business in Arizona and either:

1. Is a supervised person and meets all of the following conditions:

a. Has more than 5 clients who are natural persons, other than excepted persons.

b. Has clients more than 10% of whom are natural persons, other than excepted persons.

c. On a regular basis, solicits, meets with, or otherwise communicates with clients of the investment adviser or provides other than impersonal advisory services.

2. Is not a supervised person.

B. For purposes of this Section:

1. "Excepted person" means a natural person who:

a. Immediately after entering into the investment advisory contract with the investment adviser has at least $750,000 under management with the investment adviser, or

b. The investment adviser reasonably believes, immediately prior to entering into the advisory contract, has a net worth, together with assets held jointly with a spouse, at the time the contract is entered into of more than $1,500,000.

2. "Supervised person" means any partner, officer, director, or other person occupying a similar status or performing similar functions, or employees of an investment adviser, or other person who provides investment advice on behalf of the investment adviser and is subject to the supervision and control of the investment adviser.

3. "Place of business" means:

a. An office at which the investment adviser representative regularly provides investment advisory services, solicits, meets with, or otherwise communicates with clients, or

b. Any other location that is held out to the general public as a location at which the investment adviser representative provides investment advisory services, solicits, meets with, or otherwise communicates with clients.

C. A person who employs one or more investment adviser representatives who solicit, offer, or negotiate for the sale of or sell investment advisory services on behalf of an investment adviser shall comply with A.R.S. § 44-3151 unless each investment adviser representative is also employed by the investment adviser on whose behalf the activity is conducted.

Ariz. Admin. Code § R14-6-210

New Section adopted by final rulemaking at 7 A.A.R. 739, effective January 17, 2001 (Supp. 01-1). Subsection (C) amended from "that employees 1" to "who employs one" to correct text submitted by the Corporation Commission (Supp. 01-2).