Section 240. Investment advisor representative registration on behalf of other investment advisors or federal covered advisors

A. The purpose of this section is to permit an individual who is registered under the Act as an investment advisor representative to assist clients in the selection of other investment advisors or federal covered advisors without being subject to investment advisor representative registration requirements with respect to the other investment advisors or federal covered advisors.

As used in this section, the term "other investment advisor" or "federal covered advisor" means an investment advisor or federal covered advisor other than the one on whose behalf the individual is registered as an investment advisor representative.

B. An individual is subject to investment advisor representative registration requirements of the Act with respect to any other investment advisor or federal covered advisor unless the following conditions exist when the individual initially engages, with respect to such advisor, in activity which would require registration as an investment advisor representative under the Act.

1. The individual is registered under the Act as an investment advisor representative of an investment advisor so registered or a federal covered advisor who has filed notice under the Act.

2. The other investment advisor is registered under the Act as an investment advisor or the federal covered advisor has filed notice under the Act.

C. Except as expressly provided in this section, nothing contained in this section is intended, or should be construed, to relieve any person utilizing this section from complying with the applicable provisions of the Act or of any other of these regulations.

Historical Notes

Derived from Rule 1401, Case No. SEC920008, eff. October 15, 1992; amended, Volume 13, Issue 25, eff. September 1, 1997.

Statutory Authority

§§ 12.1-13 and 13.1-523 of the Code of Virginia.