(a) A person who receives a consideration from another person primarily for advising the other person as to the value of securities or their purchase or sale, whether through the issuance of analyses or reports or otherwise, may not
(1) employ a device, scheme, or artifice to defraud the other person; or
(2) engage in an act, practice, or course of business that operates or would operate as a fraud or deceit upon the other person.
(b) A state investment adviser may not enter into, extend, or renew an investment advisory contract unless the contract provides in writing that
(1) the state investment adviser may not be compensated on the basis of a share of capital gains upon or capital appreciation of the funds or a portion of the funds of the client; and
(2) the state investment adviser, if a partnership, shall notify the other party to the contract of a change in the membership of the partnership within a reasonable time after the change.
(c) The provisions of (b)(1) of this section do not prohibit an investment advisory contract that provides for compensation based upon the total value of a fund averaged over a definite period, or as of definite dates or taken as of a definite date. The administrator, on request, may waive the provisions of (b)(1) of this section for investment advisory contracts that conform to the limitations of 15 U.S.C. 80b-5 (Investment Advisers Act of 1940).
(d) [Repealed, Sec. 71 ch 76 SLA 1999].
(e) A state investment adviser may not take or have custody of the securities or funds of a client if
(1) the administrator, by regulation, prohibits custody; or
(2) in the absence of regulation, the state investment adviser fails to notify the administrator that the adviser has or may have custody.
(a) A person who receives a consideration from another person primarily for advising the other person as to the value of securities or their purchase or sale, whether through the issuance of analyses or reports or otherwise, may not
(1) employ a device, scheme, or artifice to defraud the other person; or
(2) engage in an act, practice, or course of business that operates or would operate as a fraud or deceit upon the other person.
(b) A state investment adviser may not enter into, extend, or renew an investment advisory contract unless the contract provides in writing that
(1) the state investment adviser may not be compensated on the basis of a share of capital gains upon or capital appreciation of the funds or a portion of the funds of the client; and
(2) the state investment adviser, if a partnership, shall notify the other party to the contract of a change in the membership of the partnership within a reasonable time after the change.
(c) The provisions of (b)(1) of this section do not prohibit an investment advisory contract that provides for compensation based upon the total value of a fund averaged over a definite period, or as of definite dates or taken as of a definite date. The administrator, on request, may waive the provisions of (b)(1) of this section for investment advisory contracts that conform to the limitations of 15 U.S.C. 80b-5 (Investment Advisers Act of 1940).
(d) [Repealed, Sec. 71 ch 76 SLA 1999].
(e) A state investment adviser may not take or have custody of the securities or funds of a client if
(1) the administrator, by regulation, prohibits custody; or
(2) in the absence of regulation, the state investment adviser fails to notify the administrator that the adviser has or may have custody.
(a) A person who receives a consideration from another person primarily for advising the other person as to the value of securities or their purchase or sale, whether through the issuance of analyses or reports or otherwise, may not
(1) employ a device, scheme, or artifice to defraud the other person; or
(2) engage in an act, practice, or course of business that operates or would operate as a fraud or deceit upon the other person.
(b) A state investment adviser may not enter into, extend, or renew an investment advisory contract unless the contract provides in writing that
(1) the state investment adviser may not be compensated on the basis of a share of capital gains upon or capital appreciation of the funds or a portion of the funds of the client; and
(2) the state investment adviser, if a partnership, shall notify the other party to the contract of a change in the membership of the partnership within a reasonable time after the change.
(c) The provisions of (b)(1) of this section do not prohibit an investment advisory contract that provides for compensation based upon the total value of a fund averaged over a definite period, or as of definite dates or taken as of a definite date. The administrator, on request, may waive the provisions of (b)(1) of this section for investment advisory contracts that conform to the limitations of 15 U.S.C. 80b-5 (Investment Advisers Act of 1940).
(d) [Repealed, Sec. 71 ch 76 SLA 1999].
(e) A state investment adviser may not take or have custody of the securities or funds of a client if
(1) the administrator, by regulation, prohibits custody; or
(2) in the absence of regulation, the state investment adviser fails to notify the administrator that the adviser has or may have custody.
