March 22, 1989
TO: INVESTMENT ADVISERS COMMITTEE NO. 16-89
RE: TENNESSEE PROPOSES INVESTMENT ADVISER REGULATIONS
__________________________________________________________
The Division of Securities of the Tennessee Department of
Commerce and Insurance has proposed the attached regulations
concerning investment adviser registration and post-registration
requirements.
The proposed regulations include, among other things,
provisions that would require an adviser to submit a balance
sheet and an income statement, maintain net capital of $25,000 or
more, compute its net capital on a quarterly basis, submit any
complaint or allegation against it to the Division of Securities
for any investment-related violation, and be subject to certain
dishonest and unethical practices, which are based, in large
part, on the proposed broker-dealer dishonest and unethical
practices.
The proposed regulations also would exempt from the
investment adviser registration requirements (i) any person
domiciled in Tennessee whose only investment advisory clients are
insurance companies or (ii) any person domiciled in Tennessee who
has had fewer than 15 clients during the preceeding 12 months and
who does not hold himself out to the public as an investment
adviser nor act as an investment adviser to any investment
company registered under the Investment Company Act.
A hearing has been scheduled for Friday, March 31, 1989 at
10:00 a.m. Therefore, your comments, if any, should be submitted
to the undersigned by Wednesday, March 29, 1989.
We will keep you informed of developments in Tennessee.
Robert L. Bunnen, Jr.
Assistant General Counsel
Attachment