March 28, 1990
TO: INVESTMENT ADVISERS COMMITTEE NO. 11-90
RE: NASAA AMENDED PROPOSED REVISIONS TO MODEL INVESTMENT
ADVISER RULES
________________________________________________________
As we previously informed you, the Financial
Planner/Investment Adviser Committee of the North American
Securities Administrators Association, Inc. (NASAA) has
proposed revisions to the model amendments and the uniform
rules. (See Memorandum to Investment Advisers Committee No.
37-89, dated September 1, 1989.) Since then, NASAA has made
minor changes to the proposed revisions. Attached is a copy of
the current proposals, which will be presented to the
membership for a vote at the NASAA spring conference on April
28, 1990.
The proposals would: (1) make the dishonest or unethical
practices rule applicable to investment adviser
representatives; (2) expand the disciplinary disclosure
requirements to investment adviser representatives; (3) add a
comment to the definition of investment adviser representative
to accommodate administrative flexibility in the treatment of
solicitors as investment adviser representatives; and (4) add a
recordkeeping rule to the model amendments, similar to SEC Rule
204-2(a)(11) and (16), to require advisers to keep and maintain
advertisements and backup data concerning performance data.
One of the significant changes made to the proposed
revisions pertains to the disclosure requirements of investment
adviser representatives. The proposal requires investment
adviser representatives to disclose a legal or disciplinary
event that is "material to an evaluation of the investment
adviser representative's integrity," rather than a legal or
disciplinary event that is "material to the client's evaluation
of whether to seek investment advice from the adviser." In
addition, the requirement that an investment adviser
representative have "direct client contact" to trigger the
disclosure requirement was deleted.
If you have any comments on these proposals, please contact
me by April 20, 1990.
Amy B. Rosenblum
Assistant General Counsel
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