August 17, 1989
TO: INVESTMENT ADVISER MEMBERS NO. 44-89
INVESTMENT ADVISER ASSOCIATE MEMBERS NO. 44-89
RE: MARYLAND ADOPTS EMERGENCY INVESTMENT ADVISER RULES
__________________________________________________________
Emergency investment adviser rules under Maryland's newly
adopted investment adviser law (see Memorandum to Investment
Adviser Members and Investment Adviser Associate Members No. 30-
89, dated June 7, 1989) became effective on July 25, 1989. The
emergency rules, a copy of which is attached, expire on December
22, 1989.
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, sets forth certain
new antifraud provisions applicable to such persons and requires
certain disclosures. The emergency 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 advisory representatives will be required
to register with the Maryland Securities Division.
The emergency rules include provisions relating to
definitions, dishonest or unethical practices, custody, the
brochure rule, agency cross transactions, performance-based
compensation, etc. The disclosure rules under Section .05 may be
met by complying with the provisions of Section 204 of the
Investment Advisers Act of 1940 and the rules thereunder which
include the "brochure rule."
Robert L. Bunnen, Jr.
Assistant General Counsel
Attachment