March 5, 1991
TO: INVESTMENT ADVISER MEMBERS NO. 10-91
INVESTMENT ADVISER ASSOCIATE MEMBERS NO. 10-91
RE: NEBRASKA ALLOWS PAYMENT OF PERFORMANCE BASED FEES
__________________________________________________________
Attached is a copy of recently promulgated regulations
which allow for the payment of performance based compensation to
investment advisers in Nebraska.
The regulations parallel Rule 205-3 under the Investment
Advisers Act of 1940 and requires a client entering into
performance based compensation contracts to be (1) a natural
person with at least $500,000 under the management of the
investment adviser or (2) a natural person or a company with a
net worth which exceeds $1 million. The regulations contain
disclosure requirements and compensation formulae which are
similar to Rule 205-3. For purposes of determining whether
market quotations are readily available in developing a
compensation formula, the regulations incorporate Rule 2a-4(a)(1)
under the Investment Company Act of 1940.
We will keep you informed of related developments.
W. Richard Mason
Assistant Counsel
Attachment