July 19, 1989
TO: INVESTMENT ADVISERS COMMITTEE NO. 28-89
RE: MARYLAND PROPOSES INVESTMENT ADVISER RULES
__________________________________________________________
The Maryland Securities Divison has proposed investment
adviser rules under the new Maryland investment adviser law (see
Memorandum to Investment Adviser Members and Investment Adviser
Associate Members No. 30-89, dated June 7, 1989). A copy of the
proposed regulations is attached.
As you will recall, the Maryland investment adviser law is
bifurcated with two effective dates. Section I, which took
effect on July 1, 1989, basically defines the terms investment
adviser and investment adviser representative and sets forth
certain new antifraud provisions applicable to such persons. The
proposed rules deal only with this section of the bill. Section
II, which does not take effect until July 1, 1990, contains the
licensing provisions by which investment advisers and
representatives will be required to register with the Maryland
Securities Division.
The proposed rules are based in large part on the NASAA
model investment adviser rules under the Uniform Securities Act
of 1956. There are several modifications, however; some of these
modifications are a result of specific Maryland statutory
differences from the NASAA model rules.
The proposed rules include provisions relating to
definitions, dishonest or unethical practices, custody, the
brochure rule, agency cross transactions, performance-based
compensation, etc.
If you have any comments on the proposed Maryland
investment adviser rules, please forward them to the undersigned
by August 9, 1989. We will keep you informed of developments.
Robert L. Bunnen, Jr.
Assistant General Counsel
Attachment