2006 New York Code - Definitions.

 
    §  359-eee.  Definitions.  Registration  requirements  for  investment
  advisers. 1. The following terms, whenever used or referred to  in  this
  article,  shall  have  the  following meaning unless a different meaning
  clearly appears from the context:
    (a) "Investment adviser" shall mean any person who, for  compensation,
  engages  in  the  business  of  advising  members  of the public, either
  directly or through publications or writings within or from the state of
  New York, as to the value of securities or as  to  the  advisability  of
  investing  in, purchasing, or selling or holding securities, or who, for
  compensation and as a part of a regular business issues  or  promulgates
  analyses  or  reports  concerning  securities  to  members of the public
  within or from the state of New York.  "Investment  adviser"  shall  not
  include:
    (1)  A  bank  or  trust  company unless it is considered an investment
  adviser under the federal investment advisers act of 1940;
    (2) A lawyer, accountant, engineer or  teacher  whose  performance  of
  these services is solely incidental to the practice of this profession;
    (3)  A  broker or dealer whose performance of these services is solely
  incidental to the conduct of his business as broker or  dealer  and  who
  receives no special compensation for them;
    (4) A publisher of any bona fide newspaper or news magazine;
    (5)  A  person  who  sold,  during  the preceding twelve month period,
  investment advisory services to fewer than six persons residing in  this
  state,  exclusive  of financial institutions and institutional buyers as
  may be defined by rule or regulation of the attorney general;
    (6) A federally covered investment adviser;
    (7) A person who would otherwise be required or permitted to  register
  with  the  federal  securities  and exchange commission as an investment
  adviser were it not for the exemption from  registration  under  section
  203(b)(3)  of  the federal Investment Advisers Act of 1940. For purposes
  of this exemption, the provisions of Rule 203(b)(3)-1  thereunder  shall
  apply; and
    (8)  Such  other  person  as  may  be  excluded from the definition of
  investment adviser or federally covered investment adviser  or  exempted
  from  the  provisions  of  subdivision  two  of this section by rules or
  regulations prescribed by the attorney general.
    (b) A "person"  under  this  section  shall  mean  a  natural  person,
  corporation, company, partnership, trust or association.
    (c)  "Federally covered investment adviser" shall mean a person who is
  registered under section 203 of the federal investment advisers  act  of
  1940, 15 U.S.C. § 80b et seq. Such term shall not include any person who
  is excluded from the term "investment adviser" pursuant to subparagraphs
  one through five, seven, and eight of paragraph (a) of this subdivision.
    2.  (a) It shall be unlawful for any investment adviser, as defined in
  this section, to engage as such within or from the  state  of  New  York
  unless and until such person shall have filed with the department of law
  a registration statement as provided herein.
    (b)  The  attorney  general may prescribe an alternative filing method
  that facilitates a central registration  depository  whereby  investment
  advisers  or  federally  covered  investment  advisers  can centrally or
  simultaneously register or submit a notice filing,  as  applicable,  and
  pay  fees  for  all states in which they plan to transact business which
  require registration or notice filings. The attorney general  is  hereby
  authorized  to  enter  into  an  agreement  or otherwise facilitate such
  alternative method with any national  securities  association,  national
  securities   exchange,   national   association   of   state  securities
  administrators or similar association or agents  thereof  to  effectuate
  the provisions of this subdivision.
    3.  A  registration  statement  relating  to persons who must register
  under this section, to be known as the  "investment  adviser  statement"
  shall  contain  such  information pertaining to the business history for
  the last preceding five years, criminal record,  educational  background
  of  the  applicant and his or its partners, officers, directors or other
  principals  thereof  deemed  pertinent  by  the  attorney  general.  The
  attorney general may prescribe forms for the use of such applicants and,
  as a condition of registration, may by rule or regulation prescribe that
  all  applicants  or  any class of applicants, as well as any persons who
  represent or will represent an investment adviser in doing  any  of  the
  acts  that  make  such person an investment adviser, shall undertake and
  successfully complete examination requirements. The attorney general may
  by rule or  regulation  dispense  with  the  requirement  of  the  above
  information  from persons already filed as brokers or dealers under this
  article who constitute  investment  advisers  under  this  section.  The
  attorney   general   may   by   rule   or   regulation  designate  other
  qualifications and credentials that will be accepted in lieu of  meeting
  the examination requirement.
    4.  (a)  The registration or notice filing of persons required to file
  under this section shall be for a period  of  one  year,  commencing  on
  January first, two thousand three, provided that registrations in effect
  prior  to  such  date shall be deemed effective until such date. Renewal
  statements shall be filed within sixty  days  prior  to  each  following
  January  first.   Initial filings may be made after January first of any
  year by any person whose  activities  require  registration  under  this
  section,  but such filing must be made within ten days prior to engaging
  in such activities.
    (b) A  federally  covered  investment  adviser  shall  file  with  the
  attorney  general,  prior  to  acting  as a federally covered investment
  adviser in this state, such  documents  as  have  been  filed  with  the
  securities  and  exchange commission as the attorney general, by rule or
  regulation, prescribes.
    5. The attorney general by rule or order may provide for the filing of
  prescribed updates and amendments which shall contain  such  information
  as  the  attorney  general may deem necessary to keep reasonably current
  the information on file.
    6. The attorney general may from time to time in the  public  interest
  make,  amend  and  rescind  such  rules,  regulations  and  forms as are
  necessary to carry out the provisions of this section, including  rules,
  regulations    and   forms   governing   registration   statements   and
  applications. For the purpose of such rules, regulations and forms,  the
  attorney general may classify securities, persons and matters within his
  jurisdiction  and  may  prescribe  different  forms and requirements for
  different classes.
    7. The department of law shall collect the following fees: two hundred
  dollars for initial and renewal investment advisory statements submitted
  by investment advisers and federally covered investment advisers.
    8. All investment advisers  as  defined  herein  and  all  brokers  or
  dealers in securities (except those brokers or dealers whose performance
  of  investment  advisory services is solely incidental to the conduct of
  their business  as  brokers  or  dealers  and  who  receive  no  special
  compensation for such services) shall file with the department of law of
  the  state of New York at its New York city offices on the date of issue
  or publication to the investing  public  one  copy  of  any  prospectus,
  pamphlet,  circular,  form letter or other sales literature addressed or
  intended for general distribution to clients or prospective  clients  of
  an  investment  adviser  and  one  copy  of  any  advertisement offering
  investment advisory services to such clients or prospective clients. The
  attorney general shall  be  empowered  to  destroy  all  literature  and
  documents submitted under this subdivision.
    9.  (a)  Every  person  required  to register under this section shall
  annually file such financial or other reports as the attorney general by
  rule or regulation prescribes.
    (b) Except as prohibited by federal law, the attorney general  may  by
  rule or regulation require investment advisers as defined herein:
    (1)    To   satisfy   specified   minimum   financial   responsibility
  requirements;
    (2) To file with the attorney general specified  financial  and  other
  information;
    (3)  To  make  and  maintain  specified  records  and to preserve such
  records for five years or such other period as may be specified.
    10. If the information contained in any registration  statement  filed
  with  the  attorney  general  under  this  article becomes inaccurate or
  incomplete in any material respect, the registrant shall  promptly  file
  with  the department of law updates and amendments. The attorney general
  may prescribe by regulations the circumstances under which  the  updates
  and  amendments  are  to  be  filed pursuant to this section and provide
  forms therefor.