Survey of State Investment Adviser Laws

Transcription

1 Survey of State Investment Adviser Laws A Chartbook Public Policy Institute

2 Survey of State Investment Adviser Laws A Chartbook Public Policy Institute

3 Acknowledgements The overview and accompanying charts were developed by Maureen Thompson of the Hastings Group. Anita Stowell served as Project Manager for the AARP Public Policy Institute. Thorough and valuable reviews of the report were provided by Laura Polacheck, Consumer Issues Senior Analyst, AARP State Legislation Department; George Gaberlavage, Senior Policy Advisor, AARP Public Policy Institute, and Team Leader, AARP Strategic Activity on Financial Protection; and Elizabeth Clemmer, Associate Director and Manager for Consumer Policy Issues, AARP Public Policy Institute. The financial support of the AARP Strategic Initiative on Financial Protection is gratefully acknowledged. 1999, AARP. Reprinting with permission only. The Public Policy Institute, formed in 1985, is part of the Research Group in the AARP. One of the missions of the Institute is to foster research and analysis on public policy issues of interest to older Americans. This publication represents part of that effort. Any views expressed in this publication are for information, debate, and discussion, and do not necessarily represent formal policies of the Association.

4 Introduction Federal and state laws define an investment adviser as any firm or individual who, for compensation, is engaged in the business of providing advice to others regarding securities or who issues reports or analyses regarding securities. Thus, the term investment adviser encompasses everything from a oneperson business offering advice on retirement planning to large firms with thousands of employees located in offices across the country. While investment advisers may be individuals, in practice, most advisers are firms that provide advice on the value of securities or the advisability of investing in, purchasing, or selling securities. Employees of investment adviser firms who make recommendations or render advice regarding securities (known as investment adviser representatives ) and financial planners who provide securities advice are also under the jurisdiction of investment adviser laws. This report describes the roles of the federal and state governments in regulating investment advisers and provides details on the investment adviser laws and regulations in each of the 50 states. Investment Adviser Regulation: An Overview The regulation of investment adviser firms and their representatives recently underwent a major change with the enactment into law of the Investment Advisers Supervision Coordination Act of The Coordination Act fundamentally alters the roles of the federal and state governments in the regulation of investment advisers. Prior to passage of the Coordination Act, investment advisers were jointly regulated by the U.S. Securities and Exchange Commission (SEC) and the securities agencies in each of the 50 states. The SEC s regulatory authority extends only to investment adviser firms. However, most state securities agencies regulate both firms and investment adviser representatives. Under the system of regulation that existed prior to the adoption of the Coordination Act, there were no clearly established lines of jurisdiction, and both the SEC and the 50 state securities agencies were responsible for supervising the entire population of investment adviser firms. Growth in the number of investment adviser firms and limited resources for regulatory oversight at both the federal and state levels made the system of overlapping jurisdictions increasingly impractical. For example, in 1980 there were only about 3,500 investment adviser firms doing business in the United States, managing $205 billion in assets. By 1996, the number of investment adviser firms had 1 The Investment Advisers Supervision Coordination Act was enacted as part of the National Securities Markets Improvement Act of 1996, a bill designed to streamline federal and state regulation of the securities and mutual fund industries. The new law makes a host of changes to the 1933 Securities Act, the 1934 Securities Exchange Act, the 1940 Investment Advisers Act, and the 1940 Investment Companies Act. In general, the new law draws sharper lines of distinction between the authority of state and federal securities regulators and seeks to eliminate overlapping or duplicative regulation while preserving investor protections. State Investment Adviser Laws 1

5 2 See the testimony of Securities and Exchange Commission Chairman Arthur Levitt before the U.S. Senate Committee on Banking, Housing, and Urban Affairs, Concerning S. 1815, the Securities Investment Promotion Act of 1996, 5 June 1996, Senate Hearing , p State Investment Adviser Laws grown to 22,500 firms managing about $8 trillion in assets. While the SEC inspected large investment adviser firms on a regular basis, the same was not true of smaller firms. In testimony before the U.S. Senate, SEC officials indicated that the agency was inspecting most smaller investment advisers on average only once every 44 years. 2 This lack of oversight was particularly disturbing to regulators and investor advocates because Americans are turning increasingly to investment advisers to guide them through the growing complexity of financial products and investments offered in the marketplace. The Investment Advisers Supervision Coordination Act The intent of the Investment Advisers Supervision Coordination Act, which took effect in July 1997, is to enhance regulatory supervision of investment advisers and to reduce duplicative or inconsistent regulations. The basic premise of the legislation is that better allocation of limited resources will improve the oversight of investment advisers. The Coordination Act establishes two levels of administrative oversight of investment advisers. The SEC is given authority to regulate investment advisers whose activities are primarily national in scope and who are managing assets of $25 million or more. State securities agencies are responsible for overseeing investment advisers whose activities are more local in nature and who are managing less than $25 million in assets. The rationale for this regulatory realignment is that the SEC is best equipped to oversee those firms that have national operations or serve an institutional clientele, while state regulators are best equipped to oversee smaller firms with a local, retail, or individual clientele. Under this arrangement, the SEC oversees approximately 28 percent of the investment adviser firms now doing business, and the states have jurisdiction over the remainder. It is important to note that the SEC requires registration only for investment adviser firms, and not investment adviser representatives. The Coordination Act permits state securities regulators to continue to require the registration of investment adviser representatives who deal directly with clients and have a place of business located within that state, even if those representatives are employed by a firm that falls under SEC jurisdiction. Requiring investment adviser representatives to register gives the state securities regulators greater power to identify and monitor individuals who may pose a risk to investors. The new law also requires larger investment adviser firms that are under the jurisdiction

6 of the SEC to file a notice with the securities agencies in the states in which they do business. The Coordination Act preserves the right of state regulators to bring enforcement actions for fraud and deception against any adviser, even if the adviser falls under SEC jurisdiction. Similarly, the SEC may bring enforcement actions against any investment adviser, including those registered only with a state. Finally, the Coordination Act sets uniform standards with respect to books and records, minimum net capital, and bonding requirements for firms that fall under state jurisdiction. The law also prohibits a state from requiring investment advisers with five or fewer clients in that state to register with the state securities agency. The States Respond Passage of the Coordination Act required state securities regulators to seek changes in their laws and regulations to conform to the new regulatory system. State securities agencies, individually and collectively through their national organization, the North American Securities Administrators Association (NASAA), have been working since the passage of the Coordination Act to update their investment adviser regulatory programs and to respond to the new responsibilities assigned by Congress. NASAA adopted a Memorandum of Understanding (MOU) concerning oversight of investment advisers. Signed by individual state securities regulators, the MOU, according to NASAA, reflects the states commitment to undertake their new regulatory responsibilities in an efficient and effective manner and to ensure that all investment advisers and investment adviser representatives that should be registered at the state level are registered and are examined on a routine basis. 3 In the MOU, the states pledged to share information about trends concerning investment advisers and regulation of the same; establish a new examination to test the knowledge and competency of state-registered investment adviser representatives; coordinate routine examination and enforcement initiatives; and undertake consumer awareness programs to educate Americans about protecting themselves from dishonest or incompetent investment advisers. NASAA also made available model amendments designed to bring state laws into compliance with the Coordination Act and update state laws with respect to investment adviser oversight. Most states have used these model amendments as a guide when updating their own investment adviser laws. 3 See NASAA, Memorandum of Understanding Concerning Investment Advisers and Investment Adviser Representatives, adopted 27 April This document may be found at < State Investment Adviser Laws 3

7 4 As previously noted, investment adviser is defined under both federal (Investment Adviser Act of 1940) and state law as any firm or individual, who, for compensation, is engaged in the business of providing advice to others regarding securities or who issues reports or analyses regarding securities. NASAA and the SEC in October 1987 developed joint guidelines to provide additional guidance as to who must register as an investment adviser. At that time, the SEC and the states were specifically interested in alerting financial planners that they are required to register under the Investment Adviser Law. 4 State Investment Adviser Laws State Investment Adviser Regulation Typically, state investment adviser laws define the term investment adviser generally in accordance with the federal definition; 4 require investment adviser firms to register with the states, using the same form used for federal registration (SEC-registered investment advisers are required to file a notice that they are doing business in a particular state); contain disclosure requirements similar to those in federal law, including written disclosure to clients on issues such as the qualifications of the investment adviser, conflicts of interest, services offered, and fees charged; allow state regulators to conduct inspections of advisers; give regulators the authority to deny, revoke, or suspend the registration of an investment adviser for lack of qualifications or for unethical behavior; prohibit fraudulent activity; provide regulators with investigative and enforcement powers, including the power to issue cease and desist orders, subpoena witnesses, and impose fines; and provide for criminal penalties. State securities laws are predicated on the belief that an effective regulatory system rests on a three-pronged program of prevention, detection, and prosecution. Many state securities laws go beyond federal requirements in a number of important areas, such as the following: requiring registration of investment adviser representatives, in addition to investment adviser firms; requiring investment adviser representatives to meet minimum standards of qualification; ensuring compliance with registration requirements by aggressive monitoring and oversight; allowing the states to conduct not-forcause inspections of investment advisers; prohibiting dishonest or unethical business practices; and allowing for private remedies for defrauded consumers. These provisions assume even greater importance since passage of the Coordination Act of 1996 because that law transfers significant responsibilities for consumer protection to the states. State Law Charts The following pages contain a series of charts detailing three aspects of state investment adviser laws: 1. the registration provisions of these laws;

8 2. the resources each state devotes to oversight of the investment adviser industry; and 3. the enforcement provisions of state investment adviser laws. In the five years since AARP conducted its first review of state laws, five additional states have adopted investment adviser laws. Colorado and Iowa are the most recent states to take such action, having adopted legislation during the 1998 legislative session. Many states have also amended these laws since AARP s 1993 review. Methodology Maureen Thompson of The Hastings Group compiled and developed the charts of states investment adviser laws. After consultation with staff of the North American Securities Administrators Association (NASAA), a survey instrument was developed and mailed to each state securities agency. A series of followup telephone calls were placed to state agencies that did not respond to the questionnaire initially or where additional information was required. A total of 48 states and the District of Columbia responded to the survey. (Only Minnesota and Louisiana did not respond.) Because the charts can provide only the most basic information on the substance of the provision in question, footnotes have been added to supply additional explanation of selected state laws. Nevertheless, because the information in the chart is in summary form and because state securities agencies are continually reviewing their investment adviser laws to update and improve them, it is important to refer to the appropriate state code sections to learn more about a law and its specific provisions. A listing of each state securities office address, with its address, telephone, and facsimile number, as well as its Web site address where available, can be found at the end of this report. Part I Registration In a number of important areas, state law extends beyond federal requirements for investment advisers. The more important state requirements are discussed below and detailed on a state-by-state basis in the charts. Registration of investment adviser firms. As of November 1998, 48 states and the District of Columbia had laws in place specifically regulating investment adviser firms. Only Ohio and Wyoming did not have such laws in place. The Ohio Legislature has legislation under consideration to impose investment adviser regulation, but has not yet passed the legislation. (See Charts 1 and 2.) Registration for investment adviser representatives. Forty states and jurisdictions now require investment adviser representatives to State Investment Adviser Laws 5

9 register with the state securities agency, up from 26 when AARP first surveyed the states in In January 1999, that number grew to 42, when Colorado and Iowa s recently enacted laws went into effect. The registration of investment adviser representatives enhances the ability of state agencies to monitor individuals who may pose a risk to clients and either subject them to more intensive regulatory scrutiny or deny registration if the individual has a proven history of abusing client trust. (See Chart 3.) Registration of solicitors. Some investment adviser firms now employ solicitors individuals who actually work directly with consumers in an effort to generate new business for the firm. (The term solicitor refers to the efforts of these individuals to solicit business for the firm.) Of the 40 states and jurisdictions that now require investment adviser representatives to register, 32 include solicitors in the definition of investment adviser representative. When the laws in Colorado and Iowa took effect in January 1999, that number increased to 34. (See Chart 4.) Minimum standards of qualification. Forty states and jurisdictions require investment adviser representatives to satisfy written examination requirements before they can register with the state. Colorado and Iowa also plan to require testing of investment adviser representatives. NASAA developed the examination on behalf of the state securities agencies; the National Association of Securities Dealers (NASD) administers the exam. Twenty-six states waive the examination requirement if the investment adviser representative meets the certification requirements of a recognized professional organization, such as the Association for Investment Management and Research, Certified Financial Planner Board of Standards, American Institute of Certified Public Accountants, or the Investment Counsel Association of America. Currently, the examinations required by the states focus almost exclusively on the investment adviser representative s knowledge of the law and ethical requirements. NASAA is now expanding the focus of the examination to test the investment adviser representative s entry-level knowledge of a broad range of finance-related subjects. Adoption of this new, more comprehensive examination will help establish a minimum threshold of competency for all advisers regulated by state securities agencies. (See Charts 5 and 6.) Ensuring compliance with registration requirements. An aggressive program to ensure that all investment advisers and investment adviser representatives who should register with the state securities agency are properly 6 State Investment Adviser Laws

10 registered allows states to identify those who may attempt to conduct business outside the scope of state regulation and oversight. It also ensures that all those who are included in the definition of investment adviser are subject to the same level of oversight. In an effort to detect unregistered activity, a majority of the state securities agencies report that they conduct periodic reviews to determine compliance with the law. Most often, state agencies monitor the yellow pages and newspapers to determine whether people advertising their services as investment advisers are actually registered to do business in the state. Increasingly, state securities agencies are monitoring Internet Web sites for the same purpose. (See Chart 7.) Updating state laws to conform to the new standards. In April 1997, NASAA adopted and made available to the states model investment adviser amendments. These model amendments, already adopted by 31 states, are intended to update state laws to conform to the requirements of the National Securities Markets Improvement Act of (See Chart 8.) Part II Resources The six charts in Part II identify the number of investment adviser firms and investment adviser representatives registered in each state (Charts 9 and 10) and the level of resources each state devotes to overseeing this profession (Charts 11, 12, 13, and 14). Although efforts have been made to identify only those investment adviser firms and representatives for which the state has primary responsibility, not all states are able to disaggregate their information on that basis. Chart 1 identifies the five states that include in their total firms that are registered with the SEC and file only a notice with the state. It is clear from the survey responses that a number of states plan to increase the number of staff assigned to investment adviser regulation. Fifteen states reported plans to hire additional staff, primarily to handle inspections of investment adviser firms (see Chart 12). Part III Enforcement The eight state-by-state charts in Part III detail the investment adviser enforcement programs of the state securities agencies. Not-for-cause inspections. Not-for-cause inspections are the audits of investment adviser operations that regulators routinely conduct. The initial post-registration inspection of an adviser offers regulators their first opportunity to verify information provided by the adviser on the registration application and to determine whether the adviser is operating in a proper manner. This type of State Investment Adviser Laws 7

11 inspection is a critical means of detecting and deterring fraud and abuse before it ensnares large numbers of consumers. In essence, these inspections serve as an early warning system for regulators. Although few states reported conducting routine not-for-cause inspections in AARP s 1993 survey, 36 states now report doing so (see Chart 15). An additional seven states plan to implement such a program in the near future. The number of not-for-cause inspections conducted varies from several hundred in large states to five to 10 in smaller states. For-cause inspections. For-cause examinations are conducted when the state securities agency has reason to believe that a violation of law may have occurred. Often, these examinations are the direct result of a consumer complaint or inquiry. The level of activity reported in the 1998 survey compared with that reported in 1993 suggests that states are conducting such examinations more frequently. (See Chart 16.) Dishonest and unethical practices. Prohibitions on dishonest and unethical practices empower state securities regulators and consumers to bring actions when investment advisers violate such standards. Every state has laws and/or regulations in place prohibiting such misconduct on the part of investment advisers and investment adviser representatives. For example, such rules prohibit misleading disclosures, require investment advisers to evaluate the suitability of their advice, require the disclosure of potential conflicts of interest (including compensation arrangements), and prohibit unauthorized or excessive trading. Approximately one in four states have implemented regulations preventing advisers from taking custody of client funds and securities as a method of deterring fraud and unethical practices. (See Charts 17, 18, and 19.) Criminal penalties and private remedies. Investment adviser laws in more than twothirds of the states provide for criminal penalties for violations of antifraud provisions. Laws in the majority of states also provide for a private right of action to allow consumers who suffer financial harm as a result of violations of the investment adviser law to sue for damages. A private right of action tied specifically to violations of the investment adviser provisions gives defrauded consumers the ability to seek redress in the courts, even if no fraud is associated with the purchase or sale of a security. (See Charts 20, 21, 22, and 23.) 8 State Investment Adviser Laws

12 Chart 1. Registration: Investment Adviser Firms Question: Are investment advisers required to register?* AL CT ID AK DE IL AZ DC IN AR FL IA CA GA KS CO 1 HI KY *This question relates specifically to the registration of investment advisers. 1 Legislation adopted in 1998 required the registration of investment advisers as of January 1, Legislation adopted in 1998 required the registration of investment advisers as of January 1, Currently, Ohio does not regulate investment advisers. At press time, the Ohio Legislature was considering, but had not adopted, legislation to require regulation of investment advisers. 4 Currently, Wyoming does not regulate investment advisers. 2 LA ME MD MA MI MN MS MO MT NE NV NH NJ NM NY NC ND OH no 3 OK OR PA RI SC SD TN TX UT VT VA WA WV WI WY no 4 State Investment Adviser Laws 9

13 Chart 2. Registration: Exclusions From the Definition of Investment Adviser Question: Who is excluded from the definition of investment adviser? 1 AL AK AZ AR CA CO a,b,c,d a,b,c,d,e 2 a,b,c,d 3 a,b,c,d a,b,c,d,e a,b,c,d,e 4 CT DE DC FL GA HI a,b,c,d,e 5 a,b,c,d a,b,c,d a,b,c,d 6 a,b,c,d a,b,c,d 7 ID IL IN IA KS KY a,b,c,d,e a,b,c,d,e a,b,c,d 8 a,b,c,d 9 a,b,c,d 10 a,b,c,d,e 11 LA ME MD MA MI MN NR a,b,c,d a,b,c,d,e 12 a,b,c,d 13 a,b,c,d NR MS MO MT NE NV NH a,b,c,d,e a,b,c,d a,b,c,d a,b,c,d a,b,c,d,e a,b,c,d,e NJ NM NY NC ND OH a,b,c,d,e 14 a,b,c,d a,b,c,d 15 a,b,c,d,e a,b,c,d NA 16 OK OR PA RI SC SD a,b,c,d 17 a,b,c,d,e a,b,c,d,e a,b,c,d,e a,b,c,d a,b,c,d TN TX UT VT VA WA a,b,c,d 18 b,c,d 19 a,b,c,d a,b,c,d a,b,c,d a,b,c,d,e WV WI WY b,c,d,e a,b,c,d NA State Investment Adviser Laws

14 1 The term investment adviser is generally defined as any individual or firm who receives compensation for giving advice, making recommendations, issuing reports, or furnishing analyses on securities, either directly or through publications. Although there is no statutory definition of the term financial planner, most persons engaged in financial planning give advice to their clients about securities, and thus fall under the definition of investment adviser. There are a number of exclusions to the definition, and the states were asked about their exceptions. The lettering system here corresponds to the following exclusions from the definition of investment adviser: a. banks and bank holding companies. b. attorneys, accountants, teachers, and engineers who offer investment advice solely incidental to the practice of their profession and receive no special compensation therefor. c. broker-dealers who offer investment advice solely incidental to their practice as broker-dealers and receive no special compensation therefor. d. legitimate general circulation investment publications. e. individuals who give investment advice pertaining only to government securities. As a result of legislation passed by Congress in 1996, certain investment advisers are excluded from state oversight because they are regulated by the Securities and Exchange Commission. That exclusion is assumed and is not specifically spelled out in the responses from the states. 2 Alaska s exclusion is for banks only and not for bank holding companies. 3 Arizona does not include teachers and accountants in the exclusion. In addition, the broker-dealer exclusion does not contain the solely incidental test. 4 Legislation adopted in 1998 requires the registration of investment advisers as of January 1, Connecticut s exclusion is for banks only and not for bank holding companies. 6 Investment advisers with 15 or fewer clients in the state who do not hold themselves out to the public as investment advisers are excluded from the definition. 7 Hawaii s exclusion is for banks only and not for bank holding companies. 8 The Indiana Securities Commissioner also has the authority to exclude others as he/she may designate by rule or order. 9 Legislation adopted in 1998 requires the registration of investment advisers as of January 1, In addition to the exclusions outlined above, Iowa will exempt from the registration requirements any attorney licensed to do business in the state or a certified public accountant licensed by the state, so long as the attorney or certified public accountant does not do any of the following: 1. Exercise investment discretion regarding the assets of a client or maintain custody of the assets of a client for the purpose of investing the assets, except when the person is acting as a bona fide fiduciary in a capacity such as an executor, administrator, trustee, estate or trust agent, guardian or conservator. 2. Accept or receive directly or indirectly any commission, fee, or other remuneration contingent upon the purchase or sale of any specific security by a client of such person. 3. Provide advice regarding the purchase or sale of specific securities. However, this shall not apply when the advice about specific securities is based on a financial statement analysis or tax consideration that is reasonably related to and in connection with the person s profession. 10 Kansas exclusion is for banks only and not for bank holding companies. 11 Kentucky s exclusion is for banks only and not for bank holding companies. In addition to these exclusions, the Securities Commissioner has the authority to grant additional exclusions. 12 Maryland also excludes insurance agents who act in a solely incidental capacity. 13 The Massachusetts exclusion contains the following modifications: (1) banks, savings institutions or trust companies (bank holding companies are not excluded); (2) registered broker-dealers or a broker dealer agent acting within the scope of employment with the broker-dealer; and (3) general circulation publications that do not consist of rendering advice on the basis of the specific investment situation of each client. 14 New Jersey s exclusion is for banks only and does not include bank holding companies. The broker-dealer exclusion is for any registered broker-dealer and is not qualified by whether the broker-dealer offers investment advice solely incidental to the practice as a broker-dealer and does not receive any special compensation. 15 New York also excludes from the definition any investment adviser with fewer than 40 clients in the state. 16 Currently, Ohio does not regulate investment advisers. At press time, the Ohio Legislature was considering, but had not adopted, legislation to require regulation of investment advisers. 17 Oklahoma s exclusion applies only to banks and not to bank holding companies. 18 Tennessee s exclusion applies only to banks and not to bank holding companies. With respect to attorneys, accountants and others who offer investment advice solely incidental to the practice of their profession, Tennessee does not restrict the exclusion to those who do not receive any special compensation. In addition, Tennessee excludes investment advisers with fewer than 15clients in the state of Tennessee during the preceding 12 months. 19 Texas is currently considering a rule proposal to exclude banks and bank holding companies from the definition. 20 Currently, Wyoming does not regulate investment advisers. State Investment Adviser Laws 11

15 Chart 3. Registration: Investment Adviser Representatives Question: Who is excluded from the definition of investment adviser? 1 Effective January 1, Idaho does not require registered representatives of a broker-dealer (BD) to separately register as Investment Advisers (IA) if a. the employing IA is registered in Idaho or is a federally registered firm that has filed a notice with Idaho; and b. the representative s investment advisory activities are limited to recommending the investment advisory services of the IA, and all such recommendations are made on behalf of the employing broker-dealer; and c. any compensation goes directly to the employing IA/BD even if the employing IA/BD then pays compensation to the representative; and d. the firm provides written notice to the Securities Department that the representative is relying on this exemption. 3 Effective January 1, Kentucky s registration requirements went into effect in mid-july New Jersey s registration requirements went into effect in December The securities division is in the process of drafting regulations to implement the new requirement. 6 Currently, Ohio does not regulate investment advisers. At press time, the Ohio Legislature was considering, but had not adopted, legislation to require regulation of investment advisers. 7 Currently, Wyoming does not regulate investment advisers. NA indicates that the state does not regulate investment advisers. NR indicates there was no response to this question. AL AK AZ AR CA CO 1 CT DE DC FL GA HI no ID IL IN IA KS KY LA ME MD MA MI MN NR no no NR MS MO MT NE NV NH NJ NM NY NC ND OH 5 no NA 6 OK OR PA RI SC SD TN TX UT VT VA WA no WV WI WY NA 7 12 State Investment Adviser Laws

16 Chart 4. Registration: Solicitors Defined as Investment Adviser Representatives Question: Are solicitors defined as investment adviser representatives?* AL AK AZ AR CA CO no 1 no 2 CT DE DC FL GA HI NA ID IL IN IA KS KY no 3 no LA ME MD MA MI MN NR 4 NA NR MS MO MT NE NV NH no *Solicitors are those individuals who help solicit business for the investment adviser firm. 1 Legislation will be introduced in the 1999 legislative session to include solicitors within the definition of investment adviser representative. 2 Effective January 1, Effective January 1, Although Maine does not require investment adviser representatives to register with the securities division, they are required to qualify by successfully completing an examination. The same is true of solicitors. 5 Currently, Ohio does not regulate investment advisers. At press time, the Ohio Legislature was considering, but had not adopted, legislation to require regulation of investment advisers. 6 Currently, Wyoming does not regulate investment advisers. NA indicates that the state does not require the registration of investment adviser representatives. NR indicates that there was no response to this question. NJ NM NY NC ND OH NA no NA 5 OK OR PA RI SC SD no no TN TX UT VT VA WA NA WV WI WY NA 6 State Investment Adviser Laws 13

17 Chart 5. Registration: Testing Requirements Question: Is testing required for investment adviser representatives? 1 1 Most state securities agencies recognize the following examinations as meeting the examination requirement for investment adviser representatives: Series 65 (Uniform Investment Adviser Law Exam); Series 63 (Uniform State Securities Law Exam); or the Series 66 (Uniform Combined State Law Exam), which combines elements of both the Series 65 and Series 63 examinations. 2 Effective January 1, Effective January 1, Although Maine does not require investment adviser representatives to register with the securities division, investment adviser representatives are required to qualify by passing an examination. 5 Because New Jersey has only recently started requiring investment adviser representatives to register, it does not yet require testing. The securities division will consider testing as it develops rules implementing the registration requirement. 6 Currently, Ohio does not regulate investment advisers. At press time, the Ohio Legislature was considering, but had not adopted, legislation to require regulation of investment advisers. 7 Currently, Wyoming does not regulate investment advisers. NA indicates that the state does not require the registration of investment adviser representatives. NR indicates that there was no response to this question. AL AK AZ AR CA CO 2 CT DE DC FL GA HI NA ID IL IN IA KS KY 3 LA ME MD MA MI MN NR 4 NA NR MS MO MT NE NV NH NJ NM NY NC ND OH no 5 NA NA 6 OK OR PA RI SC SD TN TX UT VT VA WA NA WV WI WY NA 7 14 State Investment Adviser Laws

18 Chart 6. Registration: Testing Requirement Waivers Question: Are waivers granted from the testing requirement? 1 AL AK AZ AR CA CO 2 no 3 NA 4 CT DE DC FL GA HI no NA ID IL IN IA KS KY no 5 NA 6 no LA ME MD MA MI MN NR NA NR MS MO MT NE NV NH no no no no NJ NM NY NC ND OH NA 7 NA no NA 8 OK OR PA RI SC SD no no no TN TX UT VT VA WA NA no 1 Many states accept certification by a recognized professional organization as a substitute for all or part of the testing requirement. Among the designations recognized by the states are the following: Chartered Financial Analyst, awarded by the Association for Investment Management and Research; Certified Financial Planner, awarded by the Certified Financial Planner Board of Standards; Chartered Financial Consultant, awarded by the American College; Certified Public Accountant/Personal Financial Specialist, awarded by the American Institute of Certified Public Accountants/Personal Financial Planning Division; and Chartered Investment Counselor, awarded by the Investment Counsel Association of America. 2 Alabama grants waivers on a case-by-case basis. 3 Legislation to be introduced in the 1999 legislative session is expected to include a provision that would allow waivers from the testing requirement. 4 Colorado s law took effect on January 1, No determinations have been made about granting waivers. 5 Written requests for a waiver are evaluated by the Indiana Securities Commissioner on a case-by-case basis. 6 Iowa s law took effect on January 1, No determinations have been made about granting waivers. 7 Because New Jersey has only recently started requiring investment adviser representatives to register, it does not yet require testing. The securities agency will consider issues of testing and waivers as it develops rules implementing the registration requirement. 8 Currently, Ohio does not regulate investment advisers. At press time, the Ohio Legislature was considering, but had not adopted, legislation to require regulation of investment advisers. 9 Currently, Wyoming does not regulate investment advisers. NA indicates that the state does not require the registration of investment adviser representatives. NR indicates that there was no response to this question. WV WI WY no NA 9 State Investment Adviser Laws 15

19 Chart 7. Registration: Compliance Surveys Question: Does the state conduct periodic surveys to determine whether all those who ought to register actually do so? 1 1 States that conduct periodic surveys to determine compliance with registration requirements generally do so through regular monitoring of yellow page advertisements, newspaper advertising, and, increasingly, Internet web sites. 2 Colorado s law took effect on January 1, The securities division plans to conduct periodic surveys to determine compliance. 3 Iowa s law took effect on January 1, The securities bureau plans to conduct periodic surveys to determine compliance. 4 Currently, Ohio does not regulate investment advisers. At press time, the Ohio Legislature was considering, but had not adopted, legislation to require regulation of investment advisers. 5 Currently, Wyoming does not regulate investment advisers. NR indicates that there was no response to this question. NA indicates that the state does not regulate investment advisers. AL AK AZ AR CA CO no no no 2 CT DE DC FL GA HI no ID IL IN IA KS KY no 3 no LA ME MD MA MI MN NR NR MS MO MT NE NV NH NJ NM NY NC ND OH no no no no NA 4 OK OR PA RI SC SD no no TN TX UT VT VA WA no no WV WI WY NA 5 16 State Investment Adviser Laws

20 Chart 8. Registration: NASAA Model Amendments Question: Has the state adopted amendments to the Uniform Securities Act substantially similar to the April 1997 NASAA model?* AL AK AZ AR CA CO no no 1 no 2 CT DE DC FL GA HI no 3 no ID IL IN IA KS KY 4 LA ME MD MA MI MN NR no 5 no NR MS MO MT NE NV NH NJ NM NY NC ND OH 1 Legislation will be introduced in the 1999 legislative session incorporating the 1997 NASAA model. 2 Colorado s law took effect on January 1, The District of Columbia currently is drafting amendments to conform to the NASAA model. 4 Iowa s law took effect on January 1, It is expected that legislation introduced in the 1999 legislative session will include incorporation of the 1997 NASAA model. 6 Currently, Ohio does not regulate investment advisers. At press time, the Ohio Legislature was considering, but had not adopted, legislation to require regulation of investment advisers. 7 Currently, Wyoming does not regulate investment advisers. NA indicates that the state does not regulate investment advisers. NR indicates that there was no response to this question. *The Uniform Securities Act (1956) establishes in most states the authority and legal guidelines for regulation of investment advisers and investment adviser representatives, as well as the sale of securities. With the passage of the Investment Advisers Supervision Coordination Act (Title III of the National Securities Markets Improvement Act of 1996), state law must be amended to conform with the newly defined division of regulatory authority. no NA 6 OK OR PA RI SC SD no TN TX UT VT VA WA no no no WV WI WY no no NA 7 State Investment Adviser Laws 17

21 Chart 9. Resources: Registered Firms Question: How many investment advisers are currently registered in your state? 1 1 Although states are prohibited from regulating the activities of certain investment advisers that are overseen by the Securities and Exchange Commission, those firms still must file a notice with state securities agencies. 2 Colorado s law took effect on January 1, Iowa s law took effect on January 1, The securities bureau plans to conduct periodic surveys. 4 Currently, Ohio does not regulate investment advisers. At press time, the Ohio Legislature was considering, but had not adopted, legislation to require regulation of investment advisers. 5 Currently, Wyoming does not regulate investment advisers. * Includes SEC-registered firms that file only a notice with the state. NA indicates that the state does not require the registration of investment advisers. NR indicates that there was no response to this question. AL AK AZ AR CA CO ,140 NA 2 CT DE DC FL GA HI , ID IL IN IA KS KY NA LA ME MD MA MI MN NR NR MS MO MT NE NV NH * NJ NM NY NC ND OH , NA 4 OK OR PA RI SC SD * TN TX UT VT VA WA * 500* 1,406* 381 WV WI WY NA 5 18 State Investment Adviser Laws

22 Chart 10. Resources: Registered Investment Adviser Representatives Question: How many investment adviser representatives are currently registered in your state? AL AK AZ AR CA CO 4, ,000 NA 1 CT DE DC FL GA HI 4, ,373 3,000 NA 2,141 ID IL IN IA KS KY 255 3,428 6,694 NA NA 3 LA ME MD MA MI MN NR NA 4 4,200 NR NA NR 1 Colorado s law took effect in January 1, Iowa s law took effect on January 1, Kentucky s registration requirements for investment adviser representatives went into effect in mid-july Data are not yet available. 4 Maine requires investment adviser representatives to qualify, but does not require them to register. 5 New Jersey is in the process of implementing rules requiring investment adviser representative registration. 6 Currently, Ohio does not regulate investment advisers. At press time, the Ohio Legislature was considering, but had not adopted, legislation to require regulation of investment advisers. 7 Currently, Wyoming does not regulate investment advisers. NA indicates that the state does not require the registration of investment adviser representatives. NR indicates that there was no response to this question. MS MO MT NE NV NH 300 2, ,588 3,155 1,148 NJ NM NY NC ND OH NA NA 7, NA 6 OK OR PA RI SC SD 1,805 2,452 1, , TN TX UT VT VA WA NA 1,113 5, ,218 4,689 WV WI WY NA 7 State Investment Adviser Laws 19

23 Chart 11. Resources: Size of Staff Devoted to Oversight Question: What is the total number of persons employed by your agency? 1 Reflects staff size of the Department of Corporations, an agency that has responsibilities beyond securities regulation. 2 Reflects staff size of the entire Department of Financial Institutions. NR indicates there was no response to this question. AL AK AZ AR CA CO CT DE DC FL GA HI ID IL IN IA KS KY LA ME MD MA MI MN NR NR MS MO MT NE NV NH NR NR NJ NM NY NC ND OH OK OR PA RI SC SD TN TX UT VT VA WA NR WV WI WY State Investment Adviser Laws

24 Chart 12. Resources: Number of Staff Engaged in Regulation Question: How many of these employees are actively involved in the regulation of investment advisers/representatives? AL AK AZ AR CA CO 5* NR 14 5* 22* NA 1 CT DE DC FL GA HI 9* 4* * 5 ID IL IN IA KS KY NA * 1 Colorado s investment adviser law took effect on January 1, Iowa s investment adviser law took effect on January 1, Currently, Ohio does not regulate investment advisers. At press time, the Ohio Legislature was considering, but had not adopted, legislation to provide for the regulation of investment advisers. 4 Currently, Wyoming does not regulate investment advisers. *Indicates that the securities agency intends to hire additional staff to handle investment adviser responsibilities. States report plans to add from one to four new staff positions in this area. NR indicates that there was no response to this question. NA indicates that the state does not require the registration of investment advisers. LA ME MD MA MI MN NR 5 6* 5* 9 NR MS MO MT NE NV NH * 9 NR NJ NM NY NC ND OH NA 3 OK OR PA RI SC SD * 4 1 TN TX UT VT VA WA 1* 6* 2* NR * WV WI WY 1 7 NA 4 State Investment Adviser Laws 21

25 Chart 13. Resources: Annual Budget Question: What is the total annual budget for your agency (in millions of dollars)? 1 California s budget is for the entire Department of Corporations. 2 Kentucky s budget is for the entire Department of Financial Institutions. INA indicates that the information is not available. NR indicates there was no response to this question. AL AK AZ AR CA CO CT DE DC FL GA HI NR ID IL IN IA KS KY LA ME MD MA MI MN NR NR 1.6 INA NR INA MS MO MT NE NV NH INA INA NR NJ NM NY NC ND OH INA INA OK OR PA RI SC SD NR.38 TN TX UT VT VA WA NR NR NR 2.2 WV WI WY State Investment Adviser Laws

26 Chart 14. Resources: Portion of Budget Devoted to Oversight Question: Approximately what percentage of your overall agency budget is devoted to investment adviser regulation/ enforcement? AL AK AZ AR CA CO INA NR 15% INA 3% NA 1 CT DE DC FL GA HI 15% 30% 40% NR 10% NR ID IL IN IA KS KY 10% INA INA NA 2 10% Less than 1% 1 Colorado s law took effect on January 1, Iowa s law took effect on January 1, The securities bureau expects to devote percent of its budget to investment adviser regulation. 3 Currently, Ohio does not regulate investment advisers. At press time, the Ohio Legislature was considering, but had not adopted, legislation to require regulation of investment advisers. 4 Currently, Wyoming does not regulate investment advisers. INA indicates that the information is not available. NR indicates there was no response to the question. NA indicates that the state does not require the registration of investment advisers. LA ME MD MA MI MN NR NR 30% INA NR NR MS MO MT NE NV NH INA 20% 15% NR INA NR NJ NM NY NC ND OH INA 5% NR INA 5% NA 3 OK OR PA RI SC SD 5% 10% 25% 8% NR INA TN TX UT VT VA WA NR NR 11% NR NR 8% WV WI WY 10% INA NA 4 State Investment Adviser Laws 23

27 Chart 15. Enforcement: Not for Cause Inspections Question: Does the state conduct routine, not for cause inspections of investment advisers? 1 Colorado s law requiring the regulation of investment advisers was adopted in 1998 and took effect on January 1, The state securities division plans to conduct routine, not-for-cause inspections of investment advisers. 2 Iowa s law requiring the regulation of investment advisers was adopted in 1998 and took effect on January 1, The state securities bureau plans to conduct routine, not-for-cause inspections of investment advisers. 3 Currently, Ohio does not regulate investment advisers. At press time, the Ohio Legislature was considering, but had not adopted, legislation to require regulation of investment advisers. The securities division reports that if the legislation is adopted, it will implement such an inspection program. 4 Currently, Wyoming does not regulate investment advisers. *The securities agencies in Maryland, Nebraska, New York, North Carolina, and Tennessee have indicated that they plan to implement such an inspection program in the future. NR indicates that there was no response to this question. NA indicates that the state does not require the registration of investment advisers. AL AK AZ AR CA CO no 1 CT DE DC FL GA HI no ID IL IN IA KS KY no 2 LA ME MD MA MI MN NR no* NR MS MO MT NE NV NH NR no* NJ NM NY NC ND OH no* no* no NA 3 OK OR PA RI SC SD NR TN TX UT VT VA WA no* WV WI WY NA 4 24 State Investment Adviser Laws

28 Chart 16. Enforcement: For Cause Inspections Question: What is the approximate number of for cause examinations conducted by your agency last year? AL AK AZ AR CA CO 5 0 INA 0 NR NA 1 CT DE DC FL GA HI INA ID IL IN IA KS KY NA LA ME MD MA MI MN NR NR NR 1 Colorado s law requiring the regulation of investment advisers was adopted in 1998 and took effect on January 1, Iowa s law requiring the regulation of investment advisers was adopted in 1998 and took effect on January 1, The Massachusetts inspection program was implemented in December 1997; no data are available. 4 Currently, Ohio does not regulate investment advisers. At press time, the Ohio Legislature was considering, but had not adopted, legislation to require regulation of investment advisers. 5 The Washington securities division conducted an additional 30 for cause examinations that involved both broker-dealers and investment advisers. 6 Currently, Wyoming does not regulate investment advisers. NA indicates that the state does not regulate investment advisers. NR indicates there was no response to this question. INA indicates that the information is not available. MS MO MT NE NV NH 8 NR 5 0 INA 0 NJ NM NY NC ND OH Less than 10 0 INA 3 0 NA 4 OK OR PA RI SC SD NR NR 4 TN TX UT VT VA WA NR WV WI WY 0 0 NA 6 State Investment Adviser Laws 25

29 1 Currently, Ohio does not regulate investment advisers. At press time, the Ohio Legislature was considering, but had not adopted, legislation to require regulation of investment advisers. 2 Currently, Wyoming does not regulate investment advisers. NR indicates there was no response to this question. NA indicates that the state does not require the registration of investment advisers. Chart 17. Enforcement: Prohibition of Deceptive and Unethical Practices Question: Does your law contain standard provisions prohibiting deceptive and unethical practices? AL AK AZ AR CA CO CT DE DC FL GA HI ID IL IN IA KS KY LA ME MD MA MI MN NR NR MS MO MT NE NV NH NJ NM NY NC ND OH NA 1 OK OR PA RI SC SD TN TX UT VT VA WA WV WI WY NA 2 26 State Investment Adviser Laws

30 Chart 18. Enforcement: Adoption of NASAA Policy on Dishonest and Unethical Practices Question: Has your state adopted the NASAA Policy on Dishonest or Unethical Business Practices for Investment Advisers? AL AK AZ AR CA CO no no no no 1 CT DE DC FL GA HI no 2 no no no ID IL IN IA KS KY no 3 no no 4 LA ME MD MA MI MN NR no no NR MS MO MT NE NV NH no 5 no 1 Colorado s law requiring the regulation of investment advisers was adopted in 1998 and took effect on January 1, The securities division plans to adopt the NASAA Policy. 2 The District of Columbia plans to adopt the NASAA Policy. 3 Idaho plans to adopt the NASAA Policy. 4 Iowa s law requiring the regulation of investment advisers was adopted in 1998 and took effect on January 1, The securities bureau plans to adopt the NASAA Policy. 5 Missouri plans to adopt the NASAA Policy. 6 New Mexico plans to adopt the NASAA Policy. 7 Currently, Ohio does not regulate investment advisers. At press time, the Ohio Legislature was considering, but had not adopted, legislation to require regulation of investment advisers. 8 South Dakota plans to adopt the NASAA Policy. 9 Currently, Wyoming does not regulate investment advisers. NR indicates that there was no response to this question. NA indicates that the state does not require the registration of investment advisers. NJ NM NY NC ND OH no no 6 no NR no NA 7 OK OR PA RI SC SD no no 8 TN TX UT VT VA WA no no WV WI WY no no NA 9 State Investment Adviser Laws 27

31 1 The new Iowa Act grants authority to the securities commissioner to issue rules prohibiting such practices by advisers. There currently are no plans to adopt such a rule. 2 Currently, Ohio does not regulate investment advisers. At press time, the Ohio Legislature was considering, but had not adopted, legislation to require regulation of investment advisers. 3 Oregon imposes additional requirements if an investment adviser has custody of client funds/securities; however, the firm is not prohibited from having custody of funds and/or securities. 4 South Carolina requires that advisers with custody of a client s funds and/or securities post a bond. 5 Vermont does not prohibit such practices but does impose certain rules and reporting requirements. 6 Washington requires that the investment adviser meet the $25,000 net capital requirement or have an equivalent surety bond. 7 Currently, Wyoming does not regulate investment advisers. NR indicates there was no response to this question. NA indicates that the state does not require the registration of investment advisers. Chart 19. Enforcement: Prohibitions on Custody of Client Funds/Securities Question: Does your state law include prohibitions on advisers having custody of client funds/securities? AL AK AZ AR CA CO no no no no no CT DE DC FL GA HI no no no ID IL IN IA KS KY no no no 1 no no LA ME MD MA MI MN NR no no no NR MS MO MT NE NV NH no no no NJ NM NY NC ND OH no no no no no NA 2 OK OR PA RI SC SD no no 3 no no 4 no TN TX UT VT VA WA no no no 5 no no 6 WV WI WY NA 7 28 State Investment Adviser Laws

32 Chart 20. Enforcement: Criminal Penalties Question: Does your state law include criminal penalties for violations of antifraud provisions specific to investment advisers? AL AK AZ AR CA CO no no no 1 CT DE DC FL GA HI no ID IL IN IA KS KY no no 1 In California, criminal cases are referred to the state attorney general or local district attorney. 2 Currently, Ohio does not regulate investment advisers. At press time, the Ohio Legislature was considering, but had not adopted, legislation to require regulation of investment advisers. 3 Currently, Wyoming does not regulate investment advisers. NR indicates that there was no response to this question. NA indicates that the state does not require the registration of investment advisers. LA ME MD MA MI MN NR NR MS MO MT NE NV NH no NJ NM NY NC ND OH NA 2 OK OR PA RI SC SD no no no no TN TX UT VT VA WA WV WI WY no NA 3 State Investment Adviser Laws 29

33 Chart 21. Enforcement: Actions Against Investment Advisers Question: What was the number of actions taken against investment advisers by your agency in the last year? 1 Colorado s law requiring the regulation of investment advisers was adopted in 1998 and took effect on January 1, Iowa s law requiring the regulation of investment advisers was adopted in 1998 and took effect on January 1, Although there are no actions reported against individuals who act solely as investment advisers, New Mexico reports that there are enforcement actions involving individuals who act both as investment advisers and stockbrokers. These cases are generally classified as actions against stockbrokers. 4 Currently, Ohio does not regulate investment advisers. At press time, the Ohio Legislature was considering, but had not adopted, legislation to require regulation of investment advisers. 5 Currently, Wyoming does not regulate investment advisers. NR indicates there was no response to this question. INA indicates that the information is not available. NA indicates that the state does not require the registration of investment advisers. AL AK AZ AR CA CO INA 1 NR 3 NR NA 1 CT DE DC FL GA HI ID IL IN IA KS KY 1 INA INA NA LA ME MD MA MI MN NR 0 20 INA INA NR MS MO MT NE NV NH NA NR NJ NM NY NC ND OH Less than NR 1 1 NA 4 OK OR PA RI SC SD NR 0 TN TX UT VT VA WA INA 4 10 NR 11 3 WV WI WY 0 1 NA 5 30 State Investment Adviser Laws

34 Chart 22. Enforcement: Private Right of Action Question: Does your state law include a private right of action for consumers defrauded under the investment adviser portion of the Act? AL AK AZ AR CA CO no NR CT DE DC FL GA HI NR 1 Currently, Ohio does not regulate investment advisers. At press time, the Ohio Legislature was considering, but had not adopted, legislation to require regulation of investment advisers. 2 Currently, Wyoming does not regulate investment advisers. NR indicates there was no response to this question. NA indicates that the state does not require the registration of investment advisers. ID IL IN IA KS KY no no no LA ME MD MA MI MN NR NR no no NR MS MO MT NE NV NH no NJ NM NY NC ND OH no NA 1 OK OR PA RI SC SD no no TN TX UT VT VA WA no no WV WI WY no no NA 2 State Investment Adviser Laws 31

35 Chart 23. Enforcement: Statute of Limitations for Private Right of Action Question: What is the statute of limitations for the private right of action? 1 1 The first number refers to the number of years from the violation in question. The second number refers to the number of years from the time the violation was discovered or should reasonably have been discovered. 2 The limitations period is 12 years for fraud and 5 years for all other violations. 3 Whichever is less. 4 Currently, Ohio does not regulate investment advisers. At press time, the Ohio Legislature was considering, but had not adopted, legislation to require regulation of investment advisers. 5 Whichever is less. 6 Whichever is less. 7 In no case may the limitation period be longer than six years after the act constituting the violation. 8 Currently, Wyoming does not regulate investment advisers. NR indicates there was no response from the state. NA indicates that the state does not require the registration of investment advisers. AL AK AZ AR CA CO X/2 NA NR X/5 2/X 2/5 CT DE DC FL GA HI 2/X NR 2 5/12 2 2/X 5/7 ID IL IN IA KS KY X/3 X/5 NA NR NA NA LA ME MD MA MI MN NR NR 3/2 3 NA NA NR MS MO MT NE NV NH NA 3/X 5 3/X 3 NR NJ NM NY NC ND OH 2 2/5 NA 2 5 NA 4 OK OR PA RI SC SD NR NA 4/1 5 NA 3/X NR TN TX UT VT VA WA 2/1 6 NA 4/2 3/2 7 2/X NA WV WI WY NA NA NA 8 32 State Investment Adviser Laws

36 Alabama Securities Commission 770 Washington Street, Suite 570 Montgomery, AL T * F Alaska Dept. of Commerce & Economic Development Division of Banking, Securities, & Corporations State Office Building, 9 th floor 333 Willoughby Avenue Juneau, AK Mailing address P.O. Box Juneau, AK T F www. commerce.state.ak.us/bsc/secur.htm Arizona Corporation Commission Securities Division 1300 West Washington, 3rd Floor Phoenix, AZ T F Arkansas Securities Department Heritage West Building, Suite E. Markham Street Little Rock, AR T * F California Department of Corporations 3700 Wilshire Boulevard, Suite 600 Los Angeles, CA T F Colorado Department of Regulatory Agencies Division of Securities 1580 Lincoln Street, Suite 420 Denver, CO T F Connecticut Department of Banking Division of Securities 260 Constitution Plaza Hartford, CT T * F State Securities Offices Directory *Toll-free 800 numbers generally can be accessed only by in-state residents. State Investment Adviser Laws 33

37 *Toll-free 800 numbers generally can be accessed only by in-state residents. Delaware Department of Justice Division of Securities Carvel State Office Building 820 N. French Street, 5 th Floor Wilmington, DE T F District of Columbia Dept. of Insurance and Securities Regulation Securities Bureau 810 First Street NE, Room 701 Washington, DC Mailing address PO Box Washington, DC T F Florida Office of the Comptroller Department of Banking & Finance The Capitol, Plaza Level 101 Gaines Street Tallahassee, FL T F Georgia Office of the Secretary of State Securities & Business Regulation Division Suite 802, West Tower Two Martin Luther King, Jr. Drive Atlanta, GA T F Hawaii Department of Commerce & Consumer Affairs 1010 Richards Street Honolulu, HI Mailing address PO Box 40 Honolulu, HI T F Idaho Department of Finance Securities Bureau 700 West State Street, 2nd floor Boise, ID Mailing address PO Box Boise, ID T F State Investment Adviser Laws

38 Illinois Office of the Secretary of State Securities Department Lincoln Tower, Suite South Second Street Springfield, IL T * F Indiana Office of Secretary of State Securities Division 302 West Washington Street, Room E-111 Indianapolis, IN T * F Iowa Insurance Division Securities Bureau 340 E. Maple Des Moines, IA T * F Kansas Office of the Securities Commissioner 618 South Kansas Avenue, 2nd floor Topeka, KS T * F Kentucky Department of Financial Institutions Division of Securities 1025 Capital Center Drive, Suite 200 Frankfort, KY T * F Louisiana Securities Commission 3445 North Causeway Blvd. Suite 509 Metairie, LA T F Maine Dept. of Professional and Financial Regulation Securities Division 121 State House Station Augusta, ME T F *Toll-free 800 numbers generally can be accessed only by in-state residents. State Investment Adviser Laws 35

39 *Toll-free 800 numbers generally can be accessed only by in-state residents. Maryland Securities Division Office of Attorney General 200 St. Paul Place, 20 th Floor Baltimore, MD T F Massachusetts Office of the Secretary of the Commonwealth Securities Division One Ashburton Place, Room 1701 Boston, MA T * F Michigan Dept. of Consumer & Industry Services Corporation, Securities & Land Development Bureau 6546 Mercantile Way Lansing, MI Mailing Address PO Box Lansing, MI T F Minnesota Department of Commerce 133 East Seventh Street St. Paul, MN T F Mississippi Office of the Secretary of State Securities Division 202 North Congress Street, Suite 601 Jackson, MS Mailing address PO Box 136 Jackson, MS T * F Missouri Office of the Secretary of State 600 West Main Street Jefferson City, MO T * F State Investment Adviser Laws

40 Montana Office of the State Auditor Securities Department 126 North Sanders, Mitchell Bldg., Room 270 Helena, MT Mailing address PO Box 4009 Helena, MT T * F Nebraska Department of Banking and Finance Bureau of Securities 1200 N Street, Suite 311 Lincoln, NE Mailing address PO Box Lincoln, NE T Nevada Office of the Secretary of State Securities Division 555 E. Washington Avenue, Suite 5200 Las Vegas, NV T * F New Hampshire Office of the Secretary of State Bureau of Securities Regulation State House, Annex - Room 317A 25 Capital Street Concord, NH Mailing address State House, Room 204 Concord, NH T * F New Jersey Department of Law & Public Safety Bureau of Securities 153 Halsey Street, 6th floor Newark, NJ Mailing address PO Box Newark, NJ T F New Mexico Regulation and Licensing Department Securities Division 725 St. Michaels Drive Santa Fe, NM T * F *Toll-free 800 numbers generally can be accessed only by in-state residents. State Investment Adviser Laws 37

41 *Toll-free 800 numbers generally can be accessed only by in-state residents. New York Department of Law Bureau of Investor Protection and Securities 120 Broadway, 23rd Floor New York, NY T F North Carolina Department of the Secretary of State Securities Division 300 N. Salisbury Street, Suite 100 Raleigh, NC T * F North Dakota Office of the Securities Commissioner State Capitol - 5th Floor 600 East Boulevard Avenue Bismarck, ND T * F Ohio Department of Commerce Division of Securities 77 South High Street, 22nd floor Columbus, OH T * F Oklahoma Department of Securities First National Center, Suite N. Robinson Oklahoma City, OK T F Oregon Department of Consumer & Business Services Division of Finance and Corporate Securities 350 Winter Street NE, Room 410 Salem, OR T F State Investment Adviser Laws

42 Pennsylvania Securities Commission Eastgate Office Building, 2nd floor 1010 N. 7th Street Harrisburg, PA T * F Rhode Island Department of Business Regulation Securities Division 233 Richmond Street, Suite 232 Providence, RI T F South Carolina Office of the Attorney General Securities Division 1000 Assembly Street Columbia, SC Mailing address PO Box Columbia, SC T F South Dakota Department of Commerce and Regulation Division of Securities 118 West Capitol Avenue Pierre, SD T F Tennessee Department of Commerce & Insurance Securities Division Davy Crockett Tower, Suite James Robertson Parkway Nashville, TN T * F Texas State Securities Board 200 East 10th Street, 5th Floor Austin, TX Mailing address: PO Box Austin, TX T F *Toll-free 800 numbers generally can be accessed only by in-state residents. State Investment Adviser Laws 39

43 *Toll-free 800 numbers generally can be accessed only by in-state residents. Utah Department of Commerce Division of Securities 160 East 300 South, 2nd floor Salt Lake City, UT Mailing address PO Box Salt Lake City, UT T SAFE* F Vermont Department of Banking Securities Division 89 Main Street, 2nd floor Montpelier, VT Mailing address 89 Main Street, Drawer 20 Montpelier, VT T F Virginia State Corporation Commission Division of Securities and Retail Franchising 1300 East Main Street, 9th floor Richmond, VA Mailing address PO Box 1197 Richmond, VA T * F Washington Department of Financial Institutions Securities Division General Administration Bldg th Street, 3rd floor West Olympia, WA Mailing address PO Box 9033 Olympia, WA T * F State Investment Adviser Laws

44 West Virginia State Auditor s Office Securities Division State Capitol Building Building 1, Room W-110 Charleston, WV T F Wisconsin Department of Financial Institutions Division of Securities 345 W. Washington Avenue, 4th floor Madison, WI Mailing address PO Box 1768 Madison, WI T * F Wyoming Office of the Secretary of State Securities Division State Capitol, Room W. 24th Street Cheyenne, WY T F *Toll-free 800 numbers generally can be accessed only by in-state residents. State Investment Adviser Laws 41

45 42 State Investment Adviser Laws AARP is the nation s leading organization for people age 50 and older. It serves their needs and interests through information and education, advocacy, and community services, which are provided by a network of local chapters and experienced volunteers throughout the country. The organization also offers members a wide range of special benefits and services, including Modern Maturity magazine and the monthly Bulletin.

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