[§485A-403]  Investment adviser registration
requirement and exemptions.  (a)  It is unlawful for a person to transact
business in this State as an investment adviser unless the person is registered
under this chapter as an investment adviser or is exempt from registration as
an investment adviser under subsection (b).



(b)  The following persons are exempt from the
registration requirement of subsection (a):



(1)  A person without a place of business in this
State that is registered under the securities act of the state in which the
person has its principal place of business if its only clients in this State
are:



(A)  Federal covered investment advisers,
investment advisers registered under this chapter, or broker-dealers registered
under this chapter;



(B)  Institutional investors;



(C)  Bona fide preexisting clients whose
principal places of residence are not in this State if the investment adviser
is registered under the securities act of the state in which the clients
maintain principal places of residence; or



(D)  Any other client exempted by rule adopted
or order issued under this chapter;



(2)  A person without a place of business in this
State if the person has had, during the preceding twelve months, not more than
five clients that are residents of this State in addition to those specified
under paragraph (1); or



(3)  Any other person exempted by rule adopted or
order issued under this chapter.



(c)  It is unlawful for an investment
adviser, directly or indirectly, to employ or associate with an individual to
engage in an activity related to investment advice in this State if the
registration of the individual is suspended or revoked or the individual is
barred from employment or association with an investment adviser, federal
covered investment adviser, or broker-dealer by an order under this chapter,
the Securities and Exchange Commission, or a self-regulatory organization,
unless the investment adviser did not know, and in the exercise of reasonable
care could not have known, of the suspension, revocation, or bar.  Upon request
from the investment adviser and for good cause, the commissioner, by order, may
waive, in whole or in part, the application of the prohibitions of this
subsection to the investment adviser.



(d)  It is unlawful for an investment adviser
to employ or associate with an individual required to be registered under this
chapter as an investment adviser representative who transacts business in this
State on behalf of the investment adviser unless the individual is registered
under section 485A-404(a) or is exempt from registration under section
485A-404(b). [L 2006, c 229, pt of §1]