August 1, 1991
TO: INVESTMENT ADVISERS COMMITTEE NO. 34-91
RE: ILLINOIS HOUSE PASSES LEGISLATION TO AMEND ADVISER LAW
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The Illinois legislature recently passed legislation to
amend the definition of investment adviser to include "any
financial planner or other person who, as an integral component
of other financially related services, provides [investment
advice] to others for compensation and as part of a business or
who holds himself or herself out as providing [such] services to
others for compensation." However, the bill excludes lawyers,
accountants and others who (a) do not exercise discretion with
respect to client assets or maintain custody of client assets,
(b) do not receive commissions contingent on the purchase or sale
of securities and (c) do not advise on the purchase or sale of
specific securities, unless the advice is "based on financial
statement analyses or tax considerations that are reasonably
related to and in connection with the person's profession."
The bill also eliminates solicitors from the definition of
investment adviser representative. Investment adviser
representatives will be required to pay a fee to fund the newly
created "Securities Audit and Enforcement Fund," unless they are
also registered as broker dealer salepersons and have paid a
similar fee to such fund.
A copy of H.B. 2405 is attached. The bill was sent to the
governor for signature on July 18, 1991. We will keep you
informed of developments.
W. Richard Mason
Assistant Counsel - Pension
Attachment