N.Y. General Business Law § 359-eee: 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.