17-12a404.   Investment adviser representativeregistration requirement and exemptions.(a) Registration requirement. It is unlawfulfor an individual to transact business in this state as aninvestment adviser representative unless the individual isregistered under this act as an investment adviser representativeor is exempt from registration as an investment adviserrepresentative under subsection (b).

      (b)   Exemptions from registration. The following individualsare exempt from the registration requirement of subsection (a):

      (1)   An individual who is exclusively employed by or associatedwith an investment adviser that is exempt from registration underK.S.A. 17-12a403(b), and amendments thereto, or a federal coveredinvestment adviser that is excluded from the notice filingrequirements ofK.S.A. 17-12a405, and amendments thereto; and

      (2)   any other individual exempted by rule adopted or orderissued under this act.

      (c)   Registration effective only while employed or associated.The registration of an investment adviser representative is noteffective while the investment adviser representative is notemployed by or associated with an investment adviser registeredunder this act or a federal covered investment adviser that has madeor is required to make a notice filing underK.S.A. 17-12a405, andamendments thereto.

      (d)   Limit on affiliations. An individual may transact businessas an investment adviser representative for more than one investmentadviser or federal covered investment adviser unless a rule adoptedor order issued under this act prohibits or limits an individualfrom acting as an investment adviser representative for more thanone investment adviser or federal covered investment adviser.

      (e)   Limits on employment or association. It is unlawful for anindividual acting as an investment adviser representative, directlyor indirectly, to conduct business in this state on behalf of aninvestment adviser or a federal covered investment adviser if theregistration of the individual as an investment adviser representative issuspended or revoked or the individual is barredfrom employment or association with an investment adviser or afederal covered investment adviser by an order under this act, thesecurities and exchange commission, or a self-regulatoryorganization. Upon request from a federal covered investmentadviser and for good cause, the administrator, by order issued, maywaive, in whole or in part, the application of the requirements ofthis subsection to the federal covered investment adviser.

      (f)   Referral fees. An investment adviser registered under thisact, a federal covered investment adviser that has filed a noticeunderK.S.A. 17-12a405, and amendments thereto, or a broker-dealerregistered under this act is not required to employ or associatewith an individual as an investment adviser representative if theonly compensation paid to the individual for a referral ofinvestment advisory clients is paid to an investment adviserregistered under this act, a federal covered investment adviser whohas filed a notice underK.S.A. 17-12a405, and amendments thereto,or abroker-dealer registered under this act with which the individualis employed or associated as an investment adviser representative.

      History:   L. 2004, ch. 154, § 21; July 1, 2005.