December 9, 1991
TO: INVESTMENT ADVISERS COMMITTEE NO. 59-91
CALIFORNIA ASSOCIATE INVESTMENT ADVISER MEMBERS
RE: CALIFORNIA PROPOSES INVESTMENT ADVISER REGULATIONS
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The California Commissioner of Corporations has proposed
several regulations relating to investment advisers. The purpose
of these regulations is to conform California investment adviser
regulations to SEC regulations and NASAA model regulations.
Specifically, the Commissioner has proposed: (1) a rule
modeled after Rule 206(3)-2 under the Investment Advisers Act
governing agency cross transactions; (2) a rule similar to Rule
206(4)-4 under the Advisers Act regarding financial and
disciplinary disclosures by investment advisers; and, (3) a rule
providing that certain activities do not promote "fair, equitable
or ethical principles" (such as activities regarding recommending
to a client any purchase, sale or exchange of any security
without reasonable grounds to believe that the recommendation is
suitable) similar to NASAA Uniform Rule 102(a)(4).
The comment period on the proposed regulations expires on
January 24, 1992. Please provide me with your comments on the
proposal by January 10, 1992.
Amy B.R. Lancellotta
Associate General Counsel
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