S T A T E   O F   N E W   Y O R K
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                                  6933

                       2015-2016 Regular Sessions

                          I N  A S S E M B L Y

                             April 10, 2015
                               ___________

Introduced  by  M.  of  A.  DINOWITZ, GOTTFRIED, ORTIZ, STECK, PICHARDO,
  MOSLEY,  BROOK-KRASNY,  BLAKE,  SEAWRIGHT,  BICHOTTE,  SILVER,   COOK,
  COLTON, GALEF -- Multi-Sponsored by -- M. of A. BRENNAN, GLICK, SIMON,
  TITONE -- read once and referred to the Committee on Judiciary

AN  ACT  to  amend the general obligations law, in relation to mandating
  greater levels of disclosure by non-fiduciaries that  provide  invest-
  ment advice

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. The general obligations law is  amended  by  adding  a  new
article 6 to read as follows:
                                ARTICLE 6
                       INVESTMENT TRANSPARENCY ACT
SECTION 6-101. APPLICATION.
        6-102. REQUIRED DISCLOSURE.
        6-103. ENFORCEMENT.
  S 6-101. APPLICATION. THE PROVISIONS OF THIS ARTICLE ARE APPLICABLE TO
INVESTMENT  ADVISORS CURRENTLY NOT SUBJECT TO A FIDUCIARY STANDARD UNDER
EXISTING STATE AND FEDERAL LAWS OR  REGULATIONS  OR  BY  ANY  APPLICABLE
STANDARDS  OF  PROFESSIONAL CONDUCT. "NON-FIDUCIARY INVESTMENT ADVISORS"
SHALL INCLUDE, BUT NOT BE LIMITED TO INDIVIDUALS AND  INSTITUTIONS  THAT
IDENTIFY  THEMSELVES  TO  CONSUMERS AS "BROKERS," "DEALERS," "INVESTMENT
ADVISORS,"  "FINANCIAL  ADVISORS,"  "FINANCIAL   PLANNERS,"   "FINANCIAL
CONSULTANTS,"  "RETIREMENT  PLANNERS," "RETIREMENT BROKERS," "RETIREMENT
CONSULTANTS," OR BY ANY OTHER TERM THAT  IS  SUGGESTIVE  OF  INVESTMENT,
FINANCIAL PLANNING, OR RETIREMENT PLANNING KNOWLEDGE OR EXPERTISE.
  S  6-102.  REQUIRED  DISCLOSURE.  1. NON-FIDUCIARY INVESTMENT ADVISORS
SHALL MAKE A PLAIN LANGUAGE DISCLOSURE TO CLIENTS ORALLY AND IN  WRITING
AT THE OUTSET OF THE RELATIONSHIP THAT ENSURES THAT INDIVIDUAL INVESTORS
ARE  AWARE  OF POTENTIAL CONFLICTS OF INTEREST. SUCH REQUIRED DISCLOSURE
SHALL STATE THE FOLLOWING: "I AM NOT A FIDUCIARY. THEREFORE,  I  AM  NOT

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10235-03-5
              

A. 6933                             2

REQUIRED  TO  ACT  IN  YOUR  BEST INTERESTS, AND AM ALLOWED TO RECOMMEND
INVESTMENTS THAT MAY EARN HIGHER FEES FOR ME OR MY FIRM, EVEN  IF  THOSE
INVESTMENTS  MAY  NOT  HAVE  THE  BEST  COMBINATION  OF FEES, RISKS, AND
EXPECTED  RETURNS  FOR  YOU." THE NON-FIDUCIARY INVESTMENT ADVISOR SHALL
PROVIDE A COPY OF THE DISCLOSURE FORM TO THEIR CLIENT.
  2. A SIGNED ACKNOWLEDGEMENT BY THE CLIENT  THAT  THIS  PLAIN  LANGUAGE
DISCLOSURE  WAS PROVIDED MUST BE MAINTAINED BY THE NON-FIDUCIARY INVEST-
MENT ADVISOR ALONGSIDE ANY WRITTEN CLIENT AGREEMENT.
  3. ANY INVESTMENT BROCHURES, ADVERTISING MATERIALS, OR  OTHER  RELATED
PRINTED  INFORMATION PROVIDED TO CLIENTS, OR ANY SUBSEQUENT ORAL INVEST-
MENT ADVICE TO THEM, MUST ALSO INCLUDE SUCH DISCLOSURE SET  FORTH  IN  A
CLEAR AND CONSPICUOUS MANNER. THE NON-FIDUCIARY INVESTMENT ADVISOR SHALL
PROVIDE A COPY OF THE DISCLOSURE FORM TO THEIR CLIENT.
  4.  INVESTMENT  ADVISORS  THAT ARE SUBJECT TO THE FIDUCIARY DUTY UNDER
LAW OR APPLICABLE STANDARDS OF  PROFESSIONAL  CONDUCT  WITH  RESPECT  TO
CERTAIN  TYPES  OF  INVESTMENT  ADVICE  BUT NOT OTHERS, MUST DISCLOSE IN
PLAIN LANGUAGE THE EXTENT TO WHICH THE FIDUCIARY DUTY DOES AND DOES  NOT
APPLY.
  S  6-103.  ENFORCEMENT. WHENEVER THE ATTORNEY GENERAL FINDS THAT THERE
HAS BEEN A VIOLATION OF THIS ARTICLE, HE OR SHE MAY PROCEED AS  PROVIDED
IN SUBDIVISION TWELVE OF SECTION SIXTY-THREE OF THE EXECUTIVE LAW. CIVIL
PENALTIES  UP TO FIVE THOUSAND DOLLARS MAY BE IMPOSED FOR EACH VIOLATION
OF THIS ARTICLE.
  S 2. This act shall take effect January 1, 2016.