Which of the following comes under an exemption from registration status of the Investment Advisers Act of 1940?

References in Text

The Small Business Investment Act of 1958, referred to in subsec. (b)(7), is Pub. L. 85–699, Aug. 21, 1958, 72 Stat. 689, which is classified principally to chapter 14B (§ 661 et seq.) of this title. For complete classification of this Act to the Code, see Short Title note set out under section 661 of this title and Tables.

The Commodity Exchange Act, referred to in subsec. (e)(2)(B), (4)–(6), is act Sept. 21, 1922, ch. 369, 42 Stat. 998, which is classified generally to chapter 1 (§ 1 et seq.) of Title 7, Agriculture. For complete classification of this Act to the Code, see section 1 of Title 7 and Tables.

The Securities Act of 1933, referred to in subsecs. (e)(5), (6) and (i)(1)(A)(i), is act May 27, 1933, ch. 38, title I, 48 Stat. 74, which is classified generally to subchapter I (§ 77a et seq.) of chapter 2A of this title. For complete classification of this Act to the Code, see section 77a of this title and Tables.

The Securities Exchange Act of 1934, referred to in subsecs. (e)(5), (6) and (i)(1)(A)(i), is act June 6, 1934, ch. 404, 48 Stat. 881, which is classified principally to chapter 2B (§ 78a et seq.) of this title. For complete classification of this Act to the Code, see section 78a of this title and Tables.

Amendments

2019—Subsec. (b)(6)(B). Pub. L. 115–417, § 2(1)(A), realigned margin and substituted semicolon for period at end.

Subsec. (b)(8). Pub. L. 115–417, § 2(1)(B), (C), added par. (8).

Subsec. (l)(3). Pub. L. 115–417, § 2(2), added par. (3).

Subsec. (m)(4). Pub. L. 115–417, § 2(3), added par. (4).

2015—Subsec. (l). Pub. L. 114–94, § 74001, designated existing provisions as par. (1), inserted heading, and added par. (2).

Subsec. (m)(3). Pub. L. 114–94, § 74002, added par. (3).

2010—Subsec. (b)(1). Pub. L. 111–203, § 403(1), inserted “, other than an investment adviser who acts as an investment adviser to any private fund,” after “any investment adviser”.

Subsec. (b)(3). Pub. L. 111–203, § 403(2), added par. (3) and struck out former par. (3) which read as follows: “any investment adviser who during the course of the preceding twelve months has had fewer than fifteen clients and who neither holds himself out generally to the public as an investment adviser nor acts as an investment adviser to any investment company registered under subchapter I of this chapter, or a company which has elected to be a business development company pursuant to section 80a–53 of this title and has not withdrawn its election. For purposes of determining the number of clients of an investment adviser under this paragraph, no shareholder, partner, or beneficial owner of a business development company, as defined in this subchapter, shall be deemed to be a client of such investment adviser unless such person is a client of such investment adviser separate and apart from his status as a shareholder, partner, or beneficial owner;”.

Subsec. (b)(5). Pub. L. 111–203, § 403(3), struck out “or” at end.

Subsec. (b)(6). Pub. L. 111–203, § 403(4), designated existing provisions as subpar. (A), redesignated former subpars. (A) and (B) as cls. (i) and (ii), respectively, and added subpar. (B).

Subsec. (b)(7). Pub. L. 111–203, § 403(5), added par. (7).

Subsec. (c)(1)(A). Pub. L. 111–203, § 985(e)(1)(A), substituted “principal office, principal place of business, and” for “principal business office and”.

Subsec. (f). Pub. L. 111–203, § 925(b), substituted “12 months or bar any such person from being associated with an investment adviser, broker, dealer, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization,” for “twelve months or bar any such person from being associated with an investment adviser,”.

Subsec. (i)(1). Pub. L. 111–203, § 929P(a)(4), designated existing provisions as subpar. (A) and inserted heading, inserted “that such penalty is in the public interest and” before “that such person—” in introductory provisions, redesignated former subpars. (A) to (D) as cls. (i) to (iv), respectively, and realigned margins, struck out concluding provisions which read “and that such penalty is in the public interest.”, and added subpar. (B).

Subsec. (k)(4)(B). Pub. L. 111–203, § 985(e)(1)(B), substituted “principal office or place of business” for “principal place of business” in concluding provisions.

Subsec. (l). Pub. L. 111–203, § 407, added subsec. (l).

Subsecs. (m), (n). Pub. L. 111–203, § 408, added subsecs. (m) and (n).

2006—Subsec. (e)(2)(B), (4). Pub. L. 109–291 inserted “credit rating agency,” after “transfer agent,”.

2002—Subsec. (e)(7). Pub. L. 107–204, § 604(b)(1), added par. (7) and struck out former par. (7) which read as follows: “is subject to an order of the Commission entered pursuant to subsection (f) of this section barring or suspending the right of such person to be associated with an investment adviser which order is in effect with respect to such person.”

Subsec. (e)(9). Pub. L. 107–204, § 604(b)(2), (3), added par. (9).

Subsec. (f). Pub. L. 107–204, § 604(c)(2), substituted “(8), or (9)” for “or (8)” and inserted “or (3)” after “paragraph (2)”.

2000—Subsec. (b)(6). Pub. L. 106–554 added par. (6).

1998—Subsec. (e)(8)(B). Pub. L. 105–353 inserted “or” after semicolon at end.

1996—Subsec. (a). Pub. L. 104–290, § 303(d), which directed substitution of “subsection (b) and section 80b–3a of this title” for “subsection (b) of this section”, was executed by making the substitution for “subsection (b)” to reflect the probable intent of Congress.

Subsec. (b)(5). Pub. L. 104–290, § 508(d), added par. (5).

Subsec. (c)(2). Pub. L. 104–290, § 303(b)(1), inserted “and that the applicant is not prohibited from registering as an investment adviser under section 80b–3a of this title” after “satisfied” in closing provisions.

Subsec. (e)(3) to (5). Pub. L. 104–290, § 305(a), added par. (3) and redesignated former pars. (3) and (4) as (4) and (5), respectively. Former par. (5) redesignated (6).

Subsec. (e)(6). Pub. L. 104–290, § 305(b)(1), substituted “this paragraph” for “this paragraph (5)”.

Pub. L. 104–290, § 305(a)(1), redesignated par. (5) as (6). Former par. (6) redesignated (7).

Subsec. (e)(7), (8). Pub. L. 104–290, § 305(a)(1), redesignated pars. (6) and (7) as (7) and (8), respectively.

Subsec. (f). Pub. L. 104–290, § 305(b)(2), substituted “paragraph (1), (5), (6), or (8) of subsection (e)” for “paragraph (1), (4), (5), or (7) of subsection (e) of this section” and “paragraph (4)” for “paragraph (3)” and substituted “subsection (e)” for “said subsection (e)” in two places.

Subsec. (h). Pub. L. 104–290, § 303(b)(2), substituted “existence,” for “existence or” and inserted “or is prohibited from registering as an investment adviser under section 80b–3a of this title,” after “investment adviser,”.

Subsec. (i)(1)(D). Pub. L. 104–290, § 305(b)(3), substituted “subsection (e)(6)” for “subsection (e)(5)”.

1995—Subsec. (b)(4). Pub. L. 104–62 added par. (4).

1990—Subsec. (e)(2). Pub. L. 101–550, § 205(b)(1), inserted “or of a substantially equivalent crime by a foreign court of competent jurisdiction” after “misdemeanor”.

Subsec. (e)(2)(A). Pub. L. 101–550, § 205(b)(2), inserted “any substantially equivalent activity however denominated by the laws of the relevant foreign government,” after “burglary,”.

Subsec. (e)(2)(B). Pub. L. 101–550, § 205(b)(3), inserted “foreign person performing a function substantially equivalent to any of the above,” after “transfer agent,” and “or any substantially equivalent statute or regulation” after “Commodity Exchange Act”.

Subsec. (e)(2)(C). Pub. L. 101–550, § 205(b)(4), inserted “or substantially equivalent activity however denominated by the laws of the relevant foreign government” after “securities”.

Subsec. (e)(2)(D). Pub. L. 101–550, § 205(b)(5), inserted “, or a violation of substantially equivalent foreign statute” after “title 18”.

Subsec. (e)(3). Pub. L. 101–550, § 205(b)(3), (6), inserted “foreign person performing a function substantially equivalent to any of the above,” after “transfer agent,”, “or any substantially equivalent statute or regulation” after “Commodity Exchange Act” wherever appearing, “, including any foreign court of competent jurisdiction”, and “foreign entity substantially equivalent to any of the above,” after “insurance company,”.

Subsec. (e)(5). Pub. L. 101–550, § 205(b)(7), inserted “the Commodity Exchange Act” after “this subchapter,”.

Subsec. (e)(7). Pub. L. 101–550, § 205(b)(8), added par. (7).

Subsec. (f). Pub. L. 101–550, § 205(c), substituted “paragraph (1), (4), (5), or (7)” for “paragraph (1), (4), or (5)”.

Subsecs. (i) to (k). Pub. L. 101–429 added subsecs. (i) to (k).

1987—Subsec. (e)(2)(B). Pub. L. 100–181, § 702(1), inserted “transfer agent,” after “fiduciary,”.

Subsec. (e)(3). Pub. L. 100–181, § 702(2), inserted “transfer agent,” after “government securities dealer,”.

Subsec. (f). Pub. L. 100–181, § 702(3), inserted “, seeking to become associated, or, at the time of the alleged misconduct, associated” before “or seeking to become associated”.

Subsec. (g). Pub. L. 100–181, § 702(4), substituted “subsection (c) or subsection (e)” for “subsection (d)”.

1986—Subsec. (e)(2)(B). Pub. L. 99–571, § 102(m)(1), substituted “government securities broker, government securities dealer, fiduciary, or entity or person required to be registered under the Commodity Exchange Act” for “or fiduciary”.

Subsec. (e)(3). Pub. L. 99–571, § 102(m)(2), inserted par. (3) and struck out former par. (3) which read as follows: “is permanently or temporarily enjoined by order, judgment, or decree of any court of competent jurisdiction from acting as an investment adviser, underwriter, broker, dealer, or municipal securities dealer, or as an affiliated person or employee of any investment company, bank, or insurance company, or from engaging in or continuing any conduct or practice in connection with any such activity, or in connection with the purchase or sale of any security.”

Subsec. (e)(4). Pub. L. 99–571, § 102(m)(3), inserted reference to Commodity Exchange Act.

1980—Subsec. (b)(3). Pub. L. 96–477 required investment advisers to business development companies to register under this section and provided that for purposes of determining the number of clients of an investment adviser under par. (3), no shareholders, partners, or beneficial owners of business development companies were to be deemed to be clients of an investment adviser unless such person qualified as a client apart from his status in connection with the business development company.

1975—Subsec. (c). Pub. L. 94–29, § 29(1), inserted provision authorizing the Commission to require a balance sheet certified by an independent public accountant and other financial statements which, as the Commission specifies, may be certified, and substituted provisions directing the Commission either to grant the registration within forty-five days or institute proceedings to determine whether registration should be denied, directing the Commission to grant registration if it finds that the requirements of this section are satisfied, and requiring the Commission to deny registration if it does not make such a finding or finds that if the applicant were registered its registration would be subject to suspension or revocation for provisions directing that registration be effective thirty days after receipt of the application by the Commission except as otherwise provided and making allowances for amendment of the application.

Subsec. (e). Pub. L. 94–29, § 29(2), added the placing of limitations on the activities of investment advisers to the enumeration of sanctions available to the Commission as set out in the provisions preceding par. (1), inserted references in par. (2)(A) to the taking of a false oath, the making of a false report, bribery, perjury, burglary, and conspiracy to commit such offenses, expanded par. (2)(B) to include municipal securities dealers, banks, insurance companies, and fiduciaries, inserted references in par. (2)(C) to larceny, theft, robbery, extortion, forgery, counterfeiting, and fraudulent concealment, inserted references in par. (2)(D) to section 152 and chapters 25 and 47 of title 18, and inserted reference to the rules of the Municipal Securities Rulemaking Board in pars. (4) and (5).

Subsec. (f). Pub. L. 94–29, § 29(3), added the placing of limitations on the activities of persons associated or seeking to become associated with an investment adviser to the enumeration of sanctions available to the Commission.

Subsecs. (g), (h). Pub. L. 94–29, § 29(4), redesignated subsecs. (h) and (i) as (g) and (h), respectively. Former subsec. (g), covering the postponement of the effective day of registration by the commencement of a proceeding to deny registration, was struck out.

1970—Subsec. (b). Pub. L. 91–547, § 24(a), struck out “investment companies and” before “insurance companies” in par. (2) and struck out “does not hold” after “clients and who” and inserted “neither hold” and “nor acts as an investment adviser to any investment company registered under subchapter I of this chapter” in par. (3).

Subsec. (c)(1)(F). Pub. L. 91–547, § 24(b), substituted “any person associated with such investment adviser” for “any partner, officer, director thereof, or any person performing similar functions, or any person directly or indirectly controlling or controlled by such investment adviser” and reference to subsec. “(e)” for “(d)”.

Subsecs. (d), (e). Pub. L. 91–547, § 24(c), (d), added subsec. (d), redesignated former subsec. (d) as (e), and in amending its provisions, inserted reference to “censure” in two places and substituted “such investment adviser or any person associated with such investment adviser” for “(1) such investment adviser, whether prior or subsequent to becoming such, or (2) any partner, officer, or director thereof, or any person performing similar functions, or (3) any person directly or indirectly controlling or controlled by such investment adviser, whether prior or subsequent to becoming such,” in introductory text preceding par. (1), formerly cl. (A), redesignated as pars. (1) to (5) former cls. (A) to (E), redesignated as items (A) to (D) of par. (2) former items (i) to (iv), striking out “, as heretofore or hereafter amended” after “Title 18”, substituted in par. (3) “an affiliated person” for “as an affiliated person”, in par. (4) included reference to subchapter I of this chapter and struck out “as any of such statutes heretofore have been or hereafter may be amended” after “this subchapter”, in par. (5) included reference to subchapter I of this chapter, struck out “as any of such statutes heretofore have been or hereafter may be amended” after “this subchapter”, inserted provision respecting disciplining an investment adviser for failure reasonably to supervise, with a view to preventing violations of statutes, rules, and regulations, another person who commits such a violation if such other person is subject to his supervision, including subpars. (A) and (B) respecting failure to supervise a person, and inserted par. (6). Former subsec. (e) redesignated (g).

Subsec. (f). Pub. L. 91–547, § 24(e), added subsec. (f). Former subsec. (f) redesignated (h).

Subsec. (g). Pub. L. 91–547, § 24(c), redesignated former subsec. (e) as (g). Former subsec. (g) redesignated (i).

Subsecs. (h), (i). Pub. L. 91–547, § 24(e), redesignated former subsecs. (f) and (g) as (h) and (i), respectively.

1960—Subsec. (c)(1)(F). Pub. L. 86–750, § 2, substituted “or any person performing similar functions, or any person directly or indirectly controlling or controlled by such investment adviser, is subject to any disqualification which would be a basis for denial, suspension, or revocation of registration of such investment adviser under the provisions of subsection (d)” for “person performing similar function or controlling person thereof (i) within ten years of the filing of such application has been convicted of any felony or misdemeanor of the character described in paragraph (1) of subsection (d) of this section, or (ii) is permanently or temporarily enjoined by an order, judgment or decree of the character described in paragraph (2) of said subsection (d) and in each case the facts relating to such conviction or injunction”.

Subsec. (c)(2). Pub. L. 86–750, § 3(a), substituted “a statement as to whether the principal business of such investment adviser consists or is to consist of acting as investment adviser and a statement as to whether a substantial part of the business of such investment adviser consists or is to consist of rendering investment supervisory services” for “a statement as to whether such investment adviser is engaged or is to engage primarily in the business of rendering investment supervisory services”.

Subsec. (d). Pub. L. 86–750, § 3(b), among other changes, limited the period of suspension to twelve months, included people controlled by the adviser, provided that the ten year period within which convictions are counted be measured from the filing of the application or after specified felonies or misdemeanors, increased the number of offenses by including willful, false or misleading statements as to any material fact, or omissions thereof, in any application for registration or report filed with the Commission, embezzlement, fraudulent conversion, and misappropriation of funds or securities, violations of sections 1341, 1342 or 1343 of title 18, willful violations of, or aiding, abetting, counseling, commanding, inducing or procuring the violation of the Securities Act of 1933, or of the Securities Exchange Act of 1934, or of this title, and any amendment or rule or regulation thereunder.

Subsec. (e). Pub. L. 86–750, § 4, substituted provisions postponing the effective date of registration for ninety days at commencement of a proceeding to deny registration, or until final determination whether such registration should be denied, whichever was first, and authorizing the Commission after notice and opportunity for hearing, to postpone said effective date beyond the ninety-day period or final determination, provided that upon request of any interested party, made more than ninety days after such postponement, the Commission shall consider the postponement’s continuation, for provisions prohibiting postponement of the effective date of registration upon a proceeding to deny registration, unless the Commission found it in the public interest to do so, and which limited said postponement to three months.

Subsec. (g). Pub. L. 86–750, § 5, substituted “existence” for “business”.

Effective Date of 2010 Amendment

Amendment by sections 925(b), 929P(a)(4), and 985(e)(1) of Pub. L. 111–203 effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Pub. L. 111–203, set out as an Effective Date note under section 5301 of Title 12, Banks and Banking.

Amendment by sections 403, 407, and 408 of Pub. L. 111–203 effective 1 year after July 21, 2010, except that any investment adviser may, at the discretion of the investment adviser, register with the Commission under the Investment Advisers Act of 1940 during that 1-year period, subject to the rules of the Commission, and except as otherwise provided, see section 419 of Pub. L. 111–203, set out as a note under section 80b–2 of this title.

Effective Date of 1995 Amendment

Amendment by Pub. L. 104–62 applicable as defense to any claim in administrative and judicial actions pending on or commenced after Dec. 8, 1995, that any person, security, interest, or participation of type described in Pub. L. 104–62 is subject to the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act of 1940, the Investment Advisers Act of 1940, or any State statute or regulation preempted as provided in section 80a–3a of this title, except as specifically provided in such statutes, see section 7 of Pub. L. 104–62, set out as a note under section 77c of this title.

Transfer of Functions

For transfer of functions of Securities and Exchange Commission, with certain exceptions, to Chairman of such Commission, see Reorg. Plan No. 10 of 1950, §§ 1, 2, eff. May 24, 1950, 15 F.R. 3175, 64 Stat. 1265, set out under section 78d of this title.

Which of the following is exempt from the requirement to register as an investment adviser in a state?

Which of the following are required for registration as an investment adviser under the Investment Advisers Act of 1940?

Are banks exempt from the Investment Advisers Act of 1940?

Which of the following would not require an individual to be registered as an investment advisor under the Investment Advisers Act of 1940?