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September 13, 1990
TO: INVESTMENT ADVISERS COMMITTEE NO. 31-90
NEW MEXICO INVESTMENT ADVISER ASSOCIATE MEMBERS
RE: NEW MEXICO PROPOSES NEW REGISTRATION RULES FOR ADVISERS
__________________________________________________________
The New Mexico Securities Division released proposed rules
regarding registration of investment advisers and investment
adviser representatives. A copy of the Division's proposal is
attached.
The proposal defines "investment adviser" as including any
person who hold himself out as providing investment advise either
as a primary business or as a component of other financially
related services, whether known as an investment adviser or not.
In addition, a person holding himself out as a financial planner
or by any other similar term is presumed to be operating as an
investment adviser whether or not that person is also a broker-
dealer, sales representative, accountant, lawyer, teacher or
engineer. The proposal also specifies that "investment advice"
includes recommendations to invest in specific types of
securities, preparation or recommendation of asset investment
programs involving securities and market timing services, but
does not include insurance consulting activities by a licensed
insurance consultant.
The Division is proposing several examination requirements
for investment advisers or investment adviser representatives.
Each adviser or representative must pass the Series 65
examination. In addition, each adviser must have a designated
management person who has passed the Series 24 examination
(General Securities Principals) or is a CFA, CIC, CFP, ChFC, CPA
with a financial planning specialist designation or admitted to
the IAFP registry. Investment adviser representatives must also
satisfy one of the above requirements or pass the Series 2 or
Series 7 general securities examinations. The proposal contains
various exemptions from the examination requirements for certain
experienced applicants.
The proposal also includes a bonding requirement for
advisers with custody of client funds.
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Comments on the proposal must be received by the New Mexico
Securities Division by October 15, 1990. Therefore, please
provide me with any comments you have on the Division's proposal
by Friday, October 5, 1990.
We will keep you informed of further developments.
W. Richard Mason
Assistant General Counsel
Attachment