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Section 359-EEE Definitions

General Business (GBS)

Registration requirements for investment advisers. 1. The following terms, whenever used or referred to in this article, shall have the following meaning unless a different meaning clearly appears from the context:

  (a) "Investment adviser" shall mean any person who, for compensation, engages in the business of advising members of the public, either directly or through publications or writings within or from the state of New York, as to the value of securities or as to the advisability of investing in, purchasing, or selling or holding securities, or who, for compensation and as a part of a regular business issues or promulgates analyses or reports concerning securities to members of the public within or from the state of New York. "Investment adviser" shall not include:

  (1) A bank or trust company unless it is considered an investment adviser under the federal investment advisers act of 1940;

  (2) A lawyer, accountant, engineer or teacher whose performance of these services is solely incidental to the practice of this profession;

  (3) A broker or dealer whose performance of these services is solely incidental to the conduct of his business as broker or dealer and who receives no special compensation for them;

  (4) A publisher of any bona fide newspaper or news magazine;

  (5) A person who sold, during the preceding twelve month period, investment advisory services to fewer than six persons residing in this state, exclusive of financial institutions and institutional buyers as may be defined by rule or regulation of the attorney general;

  (6) A federally covered investment adviser;

  (7) A person who would otherwise be required or permitted to register with the federal securities and exchange commission as an investment adviser were it not for the exemption from registration under section 203(b)(3) of the federal Investment Advisers Act of 1940. For purposes of this exemption, the provisions of Rule 203(b)(3)-1 thereunder shall apply; and

  (8) Such other person as may be excluded from the definition of investment adviser or federally covered investment adviser or exempted from the provisions of subdivision two of this section by rules or regulations prescribed by the attorney general.

  (b) A "person" under this section shall mean a natural person, corporation, company, partnership, trust or association.

  (c) "Federally covered investment adviser" shall mean a person who is registered under section 203 of the federal investment advisers act of 1940, 15 U.S.C. § 80b et seq. Such term shall not include any person who is excluded from the term "investment adviser" pursuant to subparagraphs one through five, seven, and eight of paragraph (a) of this subdivision.

  2. (a) It shall be unlawful for any investment adviser, as defined in this section, to engage as such within or from the state of New York unless and until such person shall have filed with the department of law a registration statement as provided herein.

  (b) The attorney general may prescribe an alternative filing method that facilitates a central registration depository whereby investment advisers or federally covered investment advisers can centrally or simultaneously register or submit a notice filing, as applicable, and pay fees for all states in which they plan to transact business which require registration or notice filings. The attorney general is hereby authorized to enter into an agreement or otherwise facilitate such alternative method with any national securities association, national securities exchange, national association of state securities administrators or similar association or agents thereof to effectuate the provisions of this subdivision.

  3. A registration statement relating to persons who must register under this section, to be known as the "investment adviser statement" shall contain such information pertaining to the business history for the last preceding five years, criminal record, educational background of the applicant and his or its partners, officers, directors or other principals thereof deemed pertinent by the attorney general. The attorney general may prescribe forms for the use of such applicants and, as a condition of registration, may by rule or regulation prescribe that all applicants or any class of applicants, as well as any persons who represent or will represent an investment adviser in doing any of the acts that make such person an investment adviser, shall undertake and successfully complete examination requirements. The attorney general may by rule or regulation dispense with the requirement of the above information from persons already filed as brokers or dealers under this article who constitute investment advisers under this section. The attorney general may by rule or regulation designate other qualifications and credentials that will be accepted in lieu of meeting the examination requirement.

  4. (a) The registration or notice filing of persons required to file under this section shall be for a period of one year, commencing on January first, two thousand three, provided that registrations in effect prior to such date shall be deemed effective until such date. Renewal statements shall be filed within sixty days prior to each following January first. Initial filings may be made after January first of any year by any person whose activities require registration under this section, but such filing must be made within ten days prior to engaging in such activities.

  (b) A federally covered investment adviser shall file with the attorney general, prior to acting as a federally covered investment adviser in this state, such documents as have been filed with the securities and exchange commission as the attorney general, by rule or regulation, prescribes.

  5. The attorney general by rule or order may provide for the filing of prescribed updates and amendments which shall contain such information as the attorney general may deem necessary to keep reasonably current the information on file.

  6. The attorney general may from time to time in the public interest make, amend and rescind such rules, regulations and forms as are necessary to carry out the provisions of this section, including rules, regulations and forms governing registration statements and applications. For the purpose of such rules, regulations and forms, the attorney general may classify securities, persons and matters within his jurisdiction and may prescribe different forms and requirements for different classes.

  7. The department of law shall collect the following fees: two hundred dollars for initial and renewal investment advisory statements submitted by investment advisers and federally covered investment advisers.

  8. All investment advisers as defined herein and all brokers or dealers in securities (except those brokers or dealers whose performance of investment advisory services is solely incidental to the conduct of their business as brokers or dealers and who receive no special compensation for such services) shall file with the department of law of the state of New York at its New York city offices on the date of issue or publication to the investing public one copy of any prospectus, pamphlet, circular, form letter or other sales literature addressed or intended for general distribution to clients or prospective clients of an investment adviser and one copy of any advertisement offering investment advisory services to such clients or prospective clients. The attorney general shall be empowered to destroy all literature and documents submitted under this subdivision.

  9. (a) Every person required to register under this section shall annually file such financial or other reports as the attorney general by rule or regulation prescribes.

  (b) Except as prohibited by federal law, the attorney general may by rule or regulation require investment advisers as defined herein:

  (1) To satisfy specified minimum financial responsibility requirements;

  (2) To file with the attorney general specified financial and other information;

  (3) To make and maintain specified records and to preserve such records for five years or such other period as may be specified.

  10. If the information contained in any registration statement filed with the attorney general under this article becomes inaccurate or incomplete in any material respect, the registrant shall promptly file with the department of law updates and amendments. The attorney general may prescribe by regulations the circumstances under which the updates and amendments are to be filed pursuant to this section and provide forms therefor.