Survey of State Investment Adviser Laws: A Chartbook · 2018-08-23 · State Investment Adviser...

Survey of State InvestmentAdviser LawsA ChartbookPublic Policy Institute

© 1999, AARP. Reprinting with permission only.

The overview and accompanying charts weredeveloped by Maureen Thompson of theHastings Group. Anita Stowell served asProject Manager for the AARP Public PolicyInstitute. Thorough and valuable reviews ofthe report were provided by LauraPolacheck, Consumer Issues Senior Analyst,AARP State Legislation Department; GeorgeGaberlavage, Senior Policy Advisor, AARPPublic Policy Institute, and Team Leader,AARP Strategic Activity on FinancialProtection; and Elizabeth Clemmer,Associate Director and Manager forConsumer Policy Issues, AARP Public PolicyInstitute. The financial support of the AARPStrategic Initiative on Financial Protection isgratefully acknowledged.

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 is-sues of interest to older Americans. This publication represents part of that effort. Anyviews expressed in this publication are for information, debate, and discussion, and donot necessarily represent formal policies of the Association.

Acknowledgements

State Investment Adviser Laws 1

IntroductionFederal and state laws define an investmentadviser as any firm or individual who, forcompensation, is engaged in the business ofproviding advice to others regarding securi-ties or who issues reports or analyses regard-ing securities. Thus, the term “investmentadviser” encompasses everything from a one-person business offering advice on retire-ment planning to large firms with thousandsof employees located in offices across thecountry. While investment advisers may beindividuals, in practice, most advisers arefirms that provide advice on the value of securities or the advisability of investing in,purchasing, or selling securities. Employeesof investment adviser firms who make recommendations or render advice regardingsecurities (known as “investment adviser representatives”) and financial planners whoprovide securities advice are also under thejurisdiction of investment adviser laws.

This report describes the roles of the federaland state governments in regulating invest-ment advisers and provides details on the investment adviser laws and regulations ineach of the 50 states.

Investment Adviser Regulation:An OverviewThe regulation of investment adviser firmsand their representatives recently underwent

a major change with the enactment into lawof the Investment Advisers Supervision Co-ordination Act of 1996.1 The CoordinationAct fundamentally alters the roles of the fed-eral and state governments in the regulationof investment advisers.

Prior to passage of the Coordination Act, investment advisers were jointly regulated bythe U.S. Securities and Exchange Commis-sion (SEC) and the securities agencies ineach of the 50 states. The SEC’s regulatoryauthority extends only to investment adviserfirms. However, most state securities agen-cies regulate both firms and investment ad-viser representatives.

Under the system of regulation that existedprior to the adoption of the CoordinationAct, there were no clearly established lines ofjurisdiction, and both the SEC and the 50state securities agencies were responsible forsupervising the entire population of invest-ment adviser firms. Growth in the numberof investment adviser firms and limited resources for regulatory oversight at both thefederal and state levels made the system ofoverlapping jurisdictions increasingly impractical. For example, in 1980 there wereonly about 3,500 investment adviser firmsdoing business in the United States, manag-ing $205 billion in assets. By 1996, thenumber of investment adviser firms had

1 The Investment Advisers Supervision Coordination Act was enactedas part of the National Securities Markets Improvement Act of1996, a bill designed to streamline federal and state regulation ofthe securities and mutual fund industries. The new law makes ahost of changes to the 1933 Securities Act, the 1934 SecuritiesExchange Act, the 1940 Investment Advisers Act, and the 1940Investment Companies Act. In general, the new law draws sharperlines of distinction between the authority of state and federalsecurities regulators and seeks to eliminate overlapping orduplicative regulation while preserving investor protections.

grown to 22,500 firms managing about $8trillion in assets.

While the SEC inspected large investmentadviser firms on a regular basis, the same wasnot true of smaller firms. In testimony be-fore the U.S. Senate, SEC officials indicatedthat the agency was inspecting most smallerinvestment advisers on average only onceevery 44 years.2 This lack of oversight wasparticularly disturbing to regulators and investor advocates because Americans areturning increasingly to investment advisersto guide them through the growing com-plexity of financial products and investmentsoffered in the marketplace.

The Investment Advisers Supervision Coordination ActThe intent of the Investment Advisers Su-pervision Coordination Act, which took effect in July 1997, is to enhance regulatorysupervision of investment advisers and to re-duce duplicative or inconsistent regulations.The basic premise of the legislation is thatbetter allocation of limited resources will improve the oversight of investment advisers.

The Coordination Act establishes two levelsof administrative oversight of investment advisers. The SEC is given authority to regu-late investment advisers whose activities areprimarily national in scope and who aremanaging assets of $25 million or more.

State securities agencies are responsible foroverseeing investment advisers whose activi-ties are more local in nature and who aremanaging less than $25 million in assets.

The rationale for this regulatory realignmentis that the SEC is best equipped to overseethose firms that have national operations orserve an institutional clientele, while stateregulators are best equipped to overseesmaller firms with a local, retail, or individ-ual clientele. Under this arrangement, theSEC oversees approximately 28 percent ofthe investment adviser firms now doingbusiness, and the states have jurisdictionover the remainder.

It is important to note that the SEC requiresregistration only for investment adviser firms,and not investment adviser representatives.The Coordination Act permits state securitiesregulators to continue to require the registra-tion of investment adviser representatives whodeal directly with clients and have a place ofbusiness located within that state, even ifthose representatives are employed by a firmthat falls under SEC jurisdiction. Requiringinvestment adviser representatives to registergives the state securities regulators greaterpower to identify and monitor individualswho may pose a risk to investors.

The new law also requires larger investmentadviser firms that are under the jurisdiction

2 State Investment Adviser Laws

2 See the testimony of Securities and Exchange CommissionChairman Arthur Levitt before the U.S. Senate Committee onBanking, Housing, and Urban Affairs, “Concerning S. 1815, theSecurities Investment Promotion Act of 1996,” 5 June 1996,Senate Hearing 104-681, p. 36.

of the SEC to file a notice with the securitiesagencies in the states in which they do busi-ness. The Coordination Act preserves theright of state regulators to bring enforcementactions for fraud and deception against anyadviser, even if the adviser falls under SECjurisdiction. Similarly, the SEC may bringenforcement actions against any investmentadviser, including those registered only witha state.

Finally, the Coordination Act sets uniformstandards with respect to books and records,minimum net capital, and bonding require-ments for firms that fall under state jurisdic-tion. The law also prohibits a state fromrequiring investment advisers with five orfewer clients in that state to register with thestate securities agency.

The States RespondPassage of the Coordination Act requiredstate securities regulators to seek changes intheir laws and regulations to conform to thenew regulatory system. State securities agen-cies, individually and collectively throughtheir national organization, the North Amer-ican Securities Administrators Association(NASAA), have been working since the pas-sage of the Coordination Act to update theirinvestment adviser regulatory programs andto respond to the new responsibilities assigned by Congress.

NASAA adopted a “Memorandum of Under-standing” (MOU) concerning oversight of investment advisers. Signed by individualstate securities regulators, the MOU, accord-ing to NASAA, “reflects the states’ commit-ment to undertake their new regulatoryresponsibilities in an efficient and effectivemanner” and to “ensure that all investmentadvisers and investment adviser representa-tives that should be registered at the state levelare registered and are examined on a routinebasis.”3 In the MOU, the states pledged to• share information about trends concern-

ing investment advisers and regulation ofthe same;

• establish a new examination to test theknowledge and competency of state-regis-tered investment adviser representatives;

• coordinate routine examination and enforcement initiatives; and

• undertake consumer awareness programsto educate Americans about protectingthemselves from dishonest or incompe-tent investment advisers.

NASAA also made available model amend-ments designed to bring state laws intocompliance with the Coordination Act andupdate state laws with respect to investmentadviser oversight. Most states have usedthese model amendments as a guide whenupdating their own investment adviser laws.


3 See NASAA, “Memorandum of Understanding ConcerningInvestment Advisers and Investment Adviser Representatives,”adopted 27 April 1997. This document may be found at<www.nasaa.org/iaoversight/iamou.html/>.

State Investment Adviser RegulationTypically, state investment adviser laws• define the term “investment adviser”

generally in accordance with the federaldefinition;4

• require investment adviser firms to regis-ter with the states, using the same formused for federal registration (SEC-regis-tered investment advisers are required tofile a notice that they are doing businessin a particular state);

• contain disclosure requirements similarto those in federal law, including writtendisclosure to clients on issues such as thequalifications of the investment adviser,conflicts of interest, services offered, andfees charged;

• allow state regulators to conduct inspec-tions of advisers;

• give regulators the authority to deny, revoke, or suspend the registration of aninvestment adviser for lack of qualifica-tions or for unethical behavior;

• prohibit fraudulent activity;• provide regulators with investigative and

enforcement powers, including the powerto issue cease and desist orders, subpoenawitnesses, and impose fines; and

• provide for criminal penalties.

State securities laws are predicated on the

belief that an effective regulatory systemrests on a three-pronged program of preven-tion, detection, and prosecution. Many statesecurities laws go beyond federal require-ments in a number of important areas, suchas the following:• requiring registration of investment adviser

representatives, in addition to investmentadviser firms;

• requiring investment adviser representa-tives to meet minimum standards ofqualification;

• ensuring compliance with registrationrequirements by aggressive monitoringand oversight;

• allowing the states to conduct not-for-cause inspections of investment advisers;

• prohibiting dishonest or unethical businesspractices; and

• allowing for private remedies for defraudedconsumers.

These provisions assume even greater impor-tance since passage of the Coordination Actof 1996 because that law transfers significantresponsibilities for consumer protection tothe states.

State Law ChartsThe following pages contain a series ofcharts detailing three aspects of state invest-ment adviser laws: 1. the registration provisions of these laws;


4 As previously noted, “investment adviser” is defined under bothfederal (Investment Adviser Act of 1940) and state law as any firmor individual, who, for compensation, is engaged in the business ofproviding advice to others regarding securities or who issuesreports or analyses regarding securities. NASAA and the SEC inOctober 1987 developed joint guidelines to provide additionalguidance as to who must register as an investment adviser. At thattime, the SEC and the states were specifically interested in alertingfinancial planners that they are required to register under theInvestment Adviser Law.

2. the resources each state devotes to oversightof the investment adviser industry; and

3. the enforcement provisions of state invest-ment adviser laws.

In the five years since AARP conducted itsfirst review of state laws, five additionalstates have adopted investment adviser laws.Colorado and Iowa are the most recent statesto take such action, having adopted legisla-tion during the 1998 legislative session.Many states have also amended these lawssince AARP’s 1993 review.

MethodologyMaureen Thompson of The Hastings Groupcompiled and developed the charts of states’investment adviser laws. After consultationwith staff of the North American SecuritiesAdministrators Association (NASAA), a sur-vey instrument was developed and mailed toeach state securities agency. A series of follow-up telephone calls were placed to state agen-cies that did not respond to the questionnaireinitially or where additional information wasrequired. A total of 48 states and the Districtof Columbia responded to the survey. (OnlyMinnesota and Louisiana did not respond.)

Because the charts can provide only themost basic information on the substance ofthe provision in question, footnotes havebeen added to supply additional explanationof selected state laws. Nevertheless, because

the information in the chart is in summaryform and because state securities agenciesare continually reviewing their investmentadviser laws to update and improve them, itis important to refer to the appropriate statecode sections to learn more about a law andits specific provisions.

A listing of each state securities office address,with its address, telephone, and facsimilenumber, as well as its Web site address whereavailable, can be found at the end of this report.

Part I—RegistrationIn a number of important areas, state law extends beyond federal requirements for in-vestment advisers. The more important staterequirements are discussed below and detailedon a state-by-state basis in the charts.

Registration of investment adviser firms. Asof November 1998, 48 states and the Dis-trict of Columbia had laws in place specifi-cally regulating investment adviser firms.Only Ohio and Wyoming did not have suchlaws in place. The Ohio Legislature has legis-lation under consideration to impose invest-ment adviser regulation, but has not yetpassed the legislation. (See Charts 1 and 2.)

Registration for investment adviser represen-tatives. Forty states and jurisdictions now re-quire investment adviser representatives to


register with the state securities agency, upfrom 26 when AARP first surveyed the statesin 1993. In January 1999, that number grewto 42, when Colorado and Iowa’s recentlyenacted laws went into effect. The registra-tion of investment adviser representatives enhances the ability of state agencies tomonitor individuals who may pose a risk toclients and either subject them to more intensive regulatory scrutiny or deny regis-tration if the individual has a proven historyof abusing client trust. (See Chart 3.)

Registration of “solicitors.” Some investmentadviser firms now employ “solicitors” — in-dividuals who actually work directly withconsumers in an effort to generate new busi-ness for the firm. (The term “solicitor” refersto the efforts of these individuals to “solicit”business for the firm.) Of the 40 states andjurisdictions that now require investment adviser representatives to register, 32 include“solicitors” in the definition of investmentadviser representative. When the laws inColorado and Iowa took effect in January1999, that number increased to 34. (SeeChart 4.)

Minimum standards of qualification. Fortystates and jurisdictions require investmentadviser representatives to satisfy written ex-amination requirements before they can reg-ister with the state. Colorado and Iowa also

plan to require testing of investment adviserrepresentatives. NASAA developed the exam-ination on behalf of the state securities agen-cies; the National Association of SecuritiesDealers (NASD) administers the exam.Twenty-six states waive the examination re-quirement if the investment adviser repre-sentative meets the certification requirementsof a recognized professional organization,such as the Association for Investment Man-agement and Research, Certified FinancialPlanner Board of Standards, American Insti-tute of Certified Public Accountants, or theInvestment Counsel Association of America.

Currently, the examinations required by thestates focus almost exclusively on the invest-ment adviser representative’s knowledge ofthe law and ethical requirements. NASAA isnow expanding the focus of the examinationto test the investment adviser representative’sentry-level knowledge of a broad range of fi-nance-related subjects. Adoption of this new,more comprehensive examination will helpestablish a minimum threshold of compe-tency for all advisers regulated by state secu-rities agencies. (See Charts 5 and 6.)

Ensuring compliance with registration re-quirements. An aggressive program to ensurethat all investment advisers and investmentadviser representatives who should registerwith the state securities agency are properly


registered allows states to identify those whomay attempt to conduct business outside thescope of state regulation and oversight. Italso ensures that all those who are includedin the definition of investment adviser aresubject to the same level of oversight.

In an effort to detect unregistered activity, amajority of the state securities agencies re-port that they conduct periodic reviews todetermine compliance with the law. Mostoften, state agencies monitor the yellowpages and newspapers to determine whetherpeople advertising their services as invest-ment advisers are actually registered to dobusiness in the state. Increasingly, state secu-rities agencies are monitoring Internet Websites for the same purpose. (See Chart 7.)

Updating state laws to conform to the newstandards. In April 1997, NASAA adoptedand made available to the states model in-vestment adviser amendments. These modelamendments, already adopted by 31 states,are intended to update state laws to conformto the requirements of the National Securi-ties Markets Improvement Act of 1996. (SeeChart 8.)

Part II—ResourcesThe six charts in Part II identify the numberof investment adviser firms and investmentadviser representatives registered in each

state (Charts 9 and 10) and the level of re-sources each state devotes to overseeing thisprofession (Charts 11, 12, 13, and 14). Al-though efforts have been made to identifyonly those investment adviser firms and rep-resentatives for which the state has primaryresponsibility, not all states are able to disag-gregate their information on that basis.Chart 1 identifies the five states that includein their total firms that are registered withthe SEC and file only a notice with the state.

It is clear from the survey responses that anumber of states plan to increase the num-ber of staff assigned to investment adviserregulation. Fifteen states reported plans tohire additional staff, primarily to handle inspections of investment adviser firms (seeChart 12).

Part III—EnforcementThe eight state-by-state charts in Part III de-tail the investment adviser enforcement pro-grams of the state securities agencies.

Not-for-cause inspections. “Not-for-causeinspections” are the audits of investment ad-viser operations that regulators routinelyconduct. The initial post-registration inspec-tion of an adviser offers regulators their firstopportunity to verify information providedby the adviser on the registration applicationand to determine whether the adviser is operating in a proper manner. This type of


inspection is a critical means of detectingand deterring fraud and abuse before it en-snares large numbers of consumers. Inessence, these inspections serve as an “earlywarning” system for regulators.

Although few states reported conducting rou-tine not-for-cause inspections in AARP’s 1993survey, 36 states now report doing so (seeChart 15). An additional seven states plan toimplement such a program in the near future.The number of not-for-cause inspections con-ducted varies from several hundred in largestates to five to 10 in smaller states.

For-cause inspections. “For-cause” examina-tions are conducted when the state securitiesagency has reason to believe that a violationof law may have occurred. Often, these examinations are the direct result of a con-sumer complaint or inquiry. The level of ac-tivity reported in the 1998 survey comparedwith that reported in 1993 suggests thatstates are conducting such examinationsmore frequently. (See Chart 16.)

Dishonest and unethical practices. Prohibi-tions on dishonest and unethical practicesempower state securities regulators and con-sumers to bring actions when investment advisers violate such standards. Every statehas laws and/or regulations in place pro-hibiting such misconduct on the part of in-vestment advisers and investment adviser

representatives. For example, such rules pro-hibit misleading disclosures, require invest-ment advisers to evaluate the suitability oftheir advice, require the disclosure of poten-tial conflicts of interest (including compen-sation arrangements), and prohibitunauthorized or excessive trading. Approxi-mately one in four states have implementedregulations preventing advisers from takingcustody of client funds and securities as amethod of deterring fraud and unethicalpractices. (See Charts 17, 18, and 19.)

Criminal penalties and private remedies. Investment adviser laws in more than two-thirds of the states provide for criminalpenalties for violations of antifraud provi-sions. Laws in the majority of states also provide for a private right of action to allowconsumers who suffer financial harm as a result of violations of the investment adviserlaw to sue for damages. A private right of action tied specifically to violations of theinvestment adviser provisions gives de-frauded consumers the ability to seek redressin the courts, even if no fraud is associatedwith the purchase or sale of a security. (SeeCharts 20, 21, 22, and 23.)



ALyes

AKyes

AZyes

ARyes

CAyes

CO

yes1

CTyes

DEyes

DCyes

FLyes

GAyes

HIyes

IDyes

ILyes

INyes

IAyes2

KSyes

KYyes

LAyes

MEyes

MDyes

MAyes

MIyes

MNyes

MSyes

MOyes

MTyes

NEyes

NVyes

NHyes

NJyes

NMyes

NYyes

NCyes

NDyes

OHno3

OKyes

ORyes

PAyes

RIyes

SCyes

SDyes

TNyes

TXyes

UTyes

VTyes

VAyes

WAyes

WVyes

WIyes

WYno4

ALyes

AKyes

AZyes

ARyes

CAyes

CO

yes1

CTyes

DEyes

DCyes

FLyes

GAyes

HIyes

IDyes

ILyes

INyes

IAyes2

KSyes

KYyes

LAyes

MEyes

MDyes

MAyes

MIyes

MNyes

MSyes

MOyes

MTyes

NEyes

NVyes

NHyes

NJyes

NMyes

NYyes

NCyes

NDyes

OHno3

OKyes

ORyes

PAyes

RIyes

SCyes

SDyes

TNyes

TXyes

UTyes

VTyes

VAyes

WAyes

WVyes

WIyes

WYno4

Chart 1. Registration: Investment Adviser FirmsQuestion: Are investment advisers required to register?*

*This question relates specifically to the registration of investmentadvisers.

1 Legislation adopted in 1998 required the registration of investmentadvisers as of January 1, 1999.

2 Legislation adopted in 1998 required the registration of investmentadvisers as of January 1, 1999.

3 Currently, Ohio does not regulate investment advisers. At presstime, the Ohio Legislature was considering, but had not adopted,legislation to require regulation of investment advisers.

4 Currently, Wyoming does not regulate investment advisers.


ALa,b,c,d

AKa,b,c,d,e2

AZa,b,c,d3

ARa,b,c,d

CAa,b,c,d,e

COa,b,c,d,e4

CTa,b,c,d,e5

DEa,b,c,d

DCa,b,c,d

FLa,b,c,d6

GAa,b,c,d

HIa,b,c,d7

IDa,b,c,d,e

ILa,b,c,d,e

INa,b,c,d8

IAa,b,c,d9

KSa,b,c,d10

KYa,b,c,d,e11

LANR

MEa,b,c,d

MDa,b,c,d,e12

MAa,b,c,d13

MIa,b,c,d

MNNR

MSa,b,c,d,e

MOa,b,c,d

MTa,b,c,d

NEa,b,c,d

NVa,b,c,d,e

NHa,b,c,d,e

NJa,b,c,d,e14

NMa,b,c,d

NYa,b,c,d15

NCa,b,c,d,e

NDa,b,c,d

OHNA16

OKa,b,c,d17

ORa,b,c,d,e

PAa,b,c,d,e

RIa,b,c,d,e

SCa,b,c,d

SDa,b,c,d

TNa,b,c,d18

TXb,c,d19

UTa,b,c,d

VTa,b,c,d

VAa,b,c,d

WAa,b,c,d,e

WVb,c,d,e

WIa,b,c,d

WYNA20

Chart 2. Registration: Exclusions From the Definition of Investment AdviserQuestion: Who is excluded from the definition of investment adviser?1


1 The term “investment adviser” is generally defined as any individualor firm who receives compensation for giving advice, making recom-mendations, issuing reports, or furnishing analyses on securities, ei-ther directly or through publications. Although there is no statutorydefinition of the term “financial planner,” most persons engaged in fi-nancial planning give advice to their clients about securities, andthus fall under the definition of investment adviser. There are a num-ber of exclusions to the definition, and the states were asked abouttheir exceptions. The lettering system here corresponds to the fol-lowing exclusions from the definition of investment adviser:a. banks and bank holding companies.b. attorneys, accountants, teachers, and engineers who offer invest-ment advice solely incidental to the practice of their profession andreceive no special compensation therefor.c. broker-dealers who offer investment advice solely incidental totheir practice as broker-dealers and receive no special compensationtherefor.d. legitimate general circulation investment publications.e. individuals who give investment advice pertaining only to govern-ment securities. As a result of legislation passed by Congress in 1996, certain invest-ment advisers are excluded from state oversight because they areregulated by the Securities and Exchange Commission. That exclu-sion is assumed and is not specifically spelled out in the responsesfrom the states.

2 Alaska’s exclusion is for banks only and not for bank holding compa-nies.

3 Arizona does not include teachers and accountants in the exclusion.In addition, the broker-dealer exclusion does not contain the “solelyincidental” test.

4 Legislation adopted in 1998 requires the registration of investmentadvisers as of January 1, 1999.

5 Connecticut’s exclusion is for banks only and not for bank holdingcompanies.

6 Investment advisers with 15 or fewer clients in the state who do nothold themselves out to the public as investment advisers are ex-cluded from the definition.

7 Hawaii’s exclusion is for banks only and not for bank holding compa-nies.

8 The Indiana Securities Commissioner also has the authority to ex-clude others as he/she may designate by rule or order.

9 Legislation adopted in 1998 requires the registration of investmentadvisers as of January 1, 1999. In addition to the exclusions outlinedabove, Iowa will exempt from the registration requirements any at-torney licensed to do business in the state or a certified public ac-countant licensed by the state, so long as the attorney or certifiedpublic 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 investingthe assets, except when the person is acting as a bona fide fiduciaryin a capacity such as an executor, administrator, trustee, estate ortrust agent, guardian or conservator.2. Accept or receive directly or indirectly any commission, fee, orother remuneration contingent upon the purchase or sale of any spe-cific security by a client of such person.3. Provide advice regarding the purchase or sale of specific securi-ties. However, this shall not apply when the advice about specific securities is based on a financial statement analysis or tax considera-tion that is reasonably related to and in connection with the person’sprofession.

10 Kansas’ exclusion is for banks only and not for bank holding compa-nies.

11 Kentucky’s exclusion is for banks only and not for bank holding com-panies. In addition to these exclusions, the Securities Commissionerhas the authority to grant additional exclusions.

12 Maryland also excludes insurance agents who act in a “solely inci-dental” capacity.

13 The Massachusetts exclusion contains the following modifications:(1) banks, savings institutions or trust companies (bank holdingcompanies are not excluded); (2) registered broker-dealers or a bro-ker dealer agent acting within the scope of employment with the bro-ker-dealer; and (3) general circulation publications that do notconsist of rendering advice on the basis of the specific investmentsituation of each client.

14 New Jersey’s exclusion is for banks only and does not include bankholding companies. The broker-dealer exclusion is for any registeredbroker-dealer and is not qualified by whether the broker-dealer offersinvestment advice solely incidental to the practice as a broker-dealerand does not receive any special compensation.

15 New York also excludes from the definition any investment adviserwith 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, legisla-tion to require regulation of investment advisers.

17 Oklahoma’s exclusion applies only to banks and not to bank holdingcompanies.

18 Tennessee’s exclusion applies only to banks and not to bank holdingcompanies. With respect to attorneys, accountants and others whooffer investment advice solely incidental to the practice of their pro-fession, Tennessee does not restrict the exclusion to those who donot receive any special compensation. In addition, Tennessee ex-cludes investment advisers with fewer than 15clients in the state ofTennessee during the preceding 12 months.

19 Texas is currently considering a rule proposal to exclude banks andbank holding companies from the definition.

20 Currently, Wyoming does not regulate investment advisers.

yes yes yes yes yes yes1

AL AK AZ AR CA CO

yes yes yes yes no yes

CT DE DC FL GA HI

yes2 yes yes yes3 yes yes4

ID IL IN IA KS KY

NR no yes yes no NR

LA ME MD MA MI MN

yes yes yes yes yes yes

MS MO MT NE NV NH

yes5 yes no yes yes NA6

NJ NM NY NC ND OH


OK OR PA RI SC SD

no yes yes yes yes yes

TN TX UT VT VA WA

yes yes NA7

WV WI WY


1 Effective January 1, 1999.2 Idaho does not require registered representatives of a broker-dealer

(BD) to separately register as Investment Advisers (IA) ifa. the employing IA is registered in Idaho or is a federallyregistered firm that has filed a notice with Idaho; andb. the representative’s investment advisory activities are limited torecommending the investment advisory services of the IA, and allsuch recommendations are made on behalf of the employingbroker-dealer; andc. any compensation goes directly to the employing IA/BD even ifthe employing IA/BD then pays compensation to the representative;andd. the firm provides written notice to the Securities Departmentthat the representative is relying on this exemption.

3 Effective January 1, 1999.4 Kentucky’s registration requirements went into effect in mid-July

1998.5 New Jersey’s registration requirements went into effect in

December 1997. The securities division is in the process ofdrafting regulations to implement the new requirement.


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.

Chart 3. Registration: Investment Adviser RepresentativesQuestion: Who is excluded from the definition of investment adviser?


yes no1 yes no yes yes2

AL AK AZ AR CA CO

yes yes yes yes NA yes

CT DE DC FL GA HI

yes no yes yes3 yes no

ID IL IN IA KS KY

NR yes4 yes yes NA NR

LA ME MD MA MI MN

yes no yes yes yes yes

MS MO MT NE NV NH

yes yes NA yes no NA5

NJ NM NY NC ND OH

no yes no yes yes yes

OK OR PA RI SC SD

NA yes yes yes yes yes

TN TX UT VT VA WA

yes yes NA6

WV WI WY

Chart 4. Registration: Solicitors Defined as InvestmentAdviser RepresentativesQuestion: Are “solicitors” defined as investment adviser representatives?*

*Solicitors are those individuals who help “solicit” business for theinvestment adviser firm.1 Legislation will be introduced in the 1999 legislative session to

include solicitors within the definition of investment adviserrepresentative.

2 Effective January 1, 1999.3 Effective January 1, 1999.4 Although Maine does not require investment adviser

representatives to register with the securities division, they arerequired to “qualify” by successfully completing an examination.The same is true of solicitors.


6 Currently, Wyoming does not regulate investment advisers.NA indicates that the state does not require the registration ofinvestment adviser representatives. NR indicates that there was no response to this question.

yes yes yes yes yes yes2

AL AK AZ AR CA CO

yes yes yes yes NA yes

CT DE DC FL GA HI

yes yes yes yes3 yes yes

ID IL IN IA KS KY

NR yes4 yes yes NA NR

LA ME MD MA MI MN


MS MO MT NE NV NH

no5 yes NA yes yes NA6

NJ NM NY NC ND OH


OK OR PA RI SC SD

NA yes yes yes yes yes

TN TX UT VT VA WA

yes yes NA7

WV WI WY

Chart 5. Registration: Testing RequirementsQuestion: Is testing required for investment adviser representatives?1

1 Most state securities agencies recognize the followingexaminations as meeting the examination requirement forinvestment adviser representatives: Series 65 (Uniform InvestmentAdviser Law Exam); Series 63 (Uniform State Securities LawExam); or the Series 66 (Uniform Combined State Law Exam),which combines elements of both the Series 65 and Series 63examinations.

2 Effective January 1, 1999.3 Effective January 1, 1999.4 Although Maine does not require investment adviser

representatives to register with the securities division, investmentadviser representatives are required to “qualify” by passing anexamination.

5 Because New Jersey has only recently started requiring investmentadviser representatives to register, it does not yet require testing.The securities division will consider testing as it develops rulesimplementing the registration requirement.




yes2 no3 yes yes yes NA4

AL AK AZ AR CA CO

yes yes no yes NA yes

CT DE DC FL GA HI

no yes yes5 NA6 yes no

ID IL IN IA KS KY

NR yes yes yes NA NR

LA ME MD MA MI MN

no yes no yes no no

MS MO MT NE NV NH

NA7 yes NA yes no NA8

NJ NM NY NC ND OH

yes yes yes no no no

OK OR PA RI SC SD

NA yes yes yes no yes

TN TX UT VT VA WA

yes no NA9

WV WI WY


Chart 6. Registration: Testing Requirement WaiversQuestion: Are waivers granted from the testing requirement?1

1 Many states accept certification by a recognized professionalorganization as a substitute for all or part of the testingrequirement. Among the designations recognized by the states arethe following: Chartered Financial Analyst, awarded by theAssociation for Investment Management and Research; CertifiedFinancial Planner, awarded by the Certified Financial Planner Boardof Standards; Chartered Financial Consultant, awarded by theAmerican College; Certified Public Accountant/Personal FinancialSpecialist, awarded by the American Institute of Certified PublicAccountants/Personal Financial Planning Division; and CharteredInvestment Counselor, awarded by the Investment CounselAssociation 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 thetesting requirement.

4 Colorado’s law took effect on January 1, 1999. No determinationshave been made about granting waivers.

5 Written requests for a waiver are evaluated by the IndianaSecurities Commissioner on a case-by-case basis.

6 Iowa’s law took effect on January 1, 1999. No determinations havebeen made about granting waivers.

7 Because New Jersey has only recently started requiring investmentadviser representatives to register, it does not yet require testing.The securities agency will consider issues of testing and waivers asit develops rules implementing the registration requirement.



yes no yes yes no no2

AL AK AZ AR CA CO

yes yes yes no yes yes

CT DE DC FL GA HI

yes yes yes no3 no yes

ID IL IN IA KS KY

NR yes yes yes yes NR

LA ME MD MA MI MN


MS MO MT NE NV NH

yes no no no no NA4

NJ NM NY NC ND OH


OK OR PA RI SC SD

no no yes yes yes yes

TN TX UT VT VA WA

yes yes NA5

WV WI WY

Chart 7. Registration: Compliance SurveysQuestion: Does the state conduct periodic surveys to determine whether all those whoought to register actually do so?1

1 States that conduct periodic surveys to determine compliance withregistration requirements generally do so through regularmonitoring of yellow page advertisements, newspaper advertising,and, increasingly, Internet web sites.

2 Colorado’s law took effect on January 1, 1999. The securitiesdivision plans to conduct periodic surveys to determinecompliance.

3 Iowa’s law took effect on January 1, 1999. The securities bureauplans to conduct periodic surveys to determine compliance.


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.


no no1 no yes yes yes2

AL AK AZ AR CA CO

yes yes no3 yes yes no

CT DE DC FL GA HI

yes yes yes yes4 yes yes

ID IL IN IA KS KY

NR yes yes no5 no NR

LA ME MD MA MI MN


MS MO MT NE NV NH

yes yes no yes yes NA6

NJ NM NY NC ND OH

yes yes no yes yes yes

OK OR PA RI SC SD

no no yes yes yes no

TN TX UT VT VA WA

no no NA7

WV WI WY


Chart 8. Registration: NASAA Model AmendmentsQuestion: Has the state adopted amendments to the Uniform Securities Act substantiallysimilar to the April 1997 NASAA model?*

1 Legislation will be introduced in the 1999 legislative sessionincorporating the 1997 NASAA model.

2 Colorado’s law took effect on January 1, 1999. 3 The District of Columbia currently is drafting amendments to

conform to the NASAA model.4 Iowa’s law took effect on January 1, 1999. 5 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 theauthority and legal guidelines for regulation of investment advisers andinvestment adviser representatives, as well as the sale of securities.With the passage of the Investment Advisers Supervision CoordinationAct (Title III of the National Securities Markets Improvement Act of1996), state law must be amended to conform with the newly defineddivision of regulatory authority.

Chart 9. Resources: Registered FirmsQuestion: How many investment advisers are currently registered in your state?1

1 Although states are prohibited from regulating the activities ofcertain investment advisers that are overseen by the Securities andExchange Commission, those firms still must file a notice withstate securities agencies.

2 Colorado’s law took effect on January 1, 1999. 3 Iowa’s law took effect on January 1, 1999. The securities bureau

plans to conduct periodic surveys.4 Currently, Ohio does not regulate investment advisers. At press


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 ofinvestment advisers. NR indicates that there was no response to this question.


497 343 600+ 372 2,140 NA2

AL AK AZ AR CA CO

560 56 465 650 1,800 46

CT DE DC FL GA HI

363 627 980 NA3 604 65

ID IL IN IA KS KY

NR 75 476 593 683 NR

LA ME MD MA MI MN

405 854 80 141 493 731*

MS MO MT NE NV NH

450-600 412 1,200 760 61 NA4

NJ NM NY NC ND OH

189 250 440 438* 588 25

OK OR PA RI SC SD

96 721 500* 500* 1,406* 381

TN TX UT VT VA WA

46 213 NA5

WV WI WY

4,833 325 474 712 19,000 NA1

AL AK AZ AR CA CO

4,001 122 4,373 3,000 NA 2,141

CT DE DC FL GA HI

255 3,428 6,694 NA2 339 NA3

ID IL IN IA KS KY

NR NA4 4,200 NR NA NR

LA ME MD MA MI MN

300 2,142 600 1,588 3,155 1,148

MS MO MT NE NV NH

NA5 811 NA 7,282 300 NA6

NJ NM NY NC ND OH

1,805 2,452 1,854 843 4,637 300

OK OR PA RI SC SD

NA 1,113 5,000 904 9,218 4,689

TN TX UT VT VA WA

529 859 NA7

WV WI WY


Chart 10. Resources: Registered Investment AdviserRepresentativesQuestion: How many investment adviser representatives are currently registered in yourstate?

1 Colorado’s law took effect in January 1, 1999. 2 Iowa’s law took effect on January 1, 1999. 3 Kentucky’s registration requirements for investment adviser

representatives went into effect in mid-July 1998. Data are not yetavailable.

4 Maine requires investment adviser representatives to qualify, butdoes not require them to register.

5 New Jersey is in the process of implementing rules requiringinvestment adviser representative registration.




Chart 11. Resources: Size of Staff Devoted to OversightQuestion: What is the total number of persons employed by your agency?

1 Reflects staff size of the Department of Corporations, an agencythat 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.

30 5.5 62 30 4771 21

AL AK AZ AR CA CO

32 12 6 109 27 9

CT DE DC FL GA HI

15 54 18 12 27 872

ID IL IN IA KS KY

NR 11 30 30 12 NR

LA ME MD MA MI MN

NR 21 8 12 20 NR

MS MO MT NE NV NH

50 17 41 12 6 40

NJ NM NY NC ND OH

30 57 72 8 11 7

OK OR PA RI SC SD

20 85 20 NR 31 36

TN TX UT VT VA WA

10 20 4

WV WI WY

5* NR 14 5* 22* NA1

AL AK AZ AR CA CO

9* 4* 2.5 70 4* 5

CT DE DC FL GA HI

.5 2 9 NA2 4-6 6*

ID IL IN IA KS KY

NR 5 6* 5* 9 NR

LA ME MD MA MI MN

8 10 2 2* 9 NR

MS MO MT NE NV NH

5 3 2.5 2 1 NA3

NJ NM NY NC ND OH

4 4 20 1* 4 1

OK OR PA RI SC SD

1* 6* 2* NR 5 3.33*

TN TX UT VT VA WA

1 7 NA4

WV WI WY


Chart 12. Resources: Number of Staff Engaged inRegulationQuestion: How many of these employees are actively involved in the regulation ofinvestment advisers/representatives?

1 Colorado’s investment adviser law took effect on January 1, 1999.2 Iowa’s investment adviser law took effect on January 1, 1999.3 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 tohandle investment adviser responsibilities. States report plans to addfrom 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 investmentadvisers.

1.8 .5 4.31 1.6 36.31 2.0

AL AK AZ AR CA CO

3.2 .4 .535 5.6 2.0 NR

CT DE DC FL GA HI

.837 3.1 .575 .65 1.7 10.02

ID IL IN IA KS KY

NR NR 1.6 INA NR INA

LA ME MD MA MI MN

INA .795 .44 .982 INA NR

MS MO MT NE NV NH

6.0 .881 INA INA .375 4.5

NJ NM NY NC ND OH

2.5 3.4 5.4 .463 NR .38

OK OR PA RI SC SD

NR 3.1 .9 NR NR 2.2

TN TX UT VT VA WA

.794 1.8 .2

WV WI WY


Chart 13. Resources: Annual BudgetQuestion: 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.

INA NR 15% INA 3% NA1

AL AK AZ AR CA CO

15% 30% 40% NR 10% NR

CT DE DC FL GA HI

10% INA INA NA2 10% Less than 1%

ID IL IN IA KS KY

NR NR 30% INA NR NR

LA ME MD MA MI MN

INA 20% 15% NR INA NR

MS MO MT NE NV NH

INA 5% NR INA 5% NA3

NJ NM NY NC ND OH

5% 10% 25% 8% NR INA

OK OR PA RI SC SD

NR NR 11% NR NR 8%

TN TX UT VT VA WA

10% INA NA4

WV WI WY


Chart 14. Resources: Portion of Budget Devoted toOversightQuestion: Approximately what percentage of your overall agency budget is devoted toinvestment adviser regulation/ enforcement?

1 Colorado’s law took effect on January 1, 1999.2 Iowa’s law took effect on January 1, 1999. The securities bureau

expects to devote 10-15 percent of its budget to investment adviserregulation.


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 ofinvestment advisers.

yes yes yes yes yes no1

AL AK AZ AR CA CO

yes yes yes yes yes no

CT DE DC FL GA HI

yes yes yes no2 yes yes

ID IL IN IA KS KY

NR yes no* yes yes NR

LA ME MD MA MI MN

yes NR yes no* yes yes

MS MO MT NE NV NH

yes yes no* no* no NA3

NJ NM NY NC ND OH

yes yes yes yes NR yes

OK OR PA RI SC SD

no* yes yes yes yes yes

TN TX UT VT VA WA

yes yes NA4

WV WI WY


Chart 15. Enforcement: “Not for Cause” InspectionsQuestion: Does the state conduct routine, “not for cause” inspections of investmentadvisers?

1 Colorado’s law requiring the regulation of investment advisers wasadopted in 1998 and took effect on January 1, 1999. The statesecurities division plans to conduct routine, not-for-causeinspections of investment advisers.

2 Iowa’s law requiring the regulation of investment advisers wasadopted in 1998 and took effect on January 1, 1999. The statesecurities bureau plans to conduct routine, not-for-causeinspections of investment advisers.

3 Currently, Ohio does not regulate investment advisers. At presstime, the Ohio Legislature was considering, but had not adopted,legislation to require regulation of investment advisers. Thesecurities division reports that if the legislation is adopted, it willimplement such an inspection program.

4 Currently, Wyoming does not regulate investment advisers.*The securities agencies in Maryland, Nebraska, New York, NorthCarolina, and Tennessee have indicated that they plan to implementsuch 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 ofinvestment advisers.

5 0 INA 0 NR NA1

AL AK AZ AR CA CO

INA 0 0 2 10 0

CT DE DC FL GA HI

0 18 15 NA2 23 0

ID IL IN IA KS KY

NR NR 20 03 6 NR

LA ME MD MA MI MN

8 NR 5 0 INA 0

MS MO MT NE NV NH

Less than 10 0 INA 3 0 NA4

NJ NM NY NC ND OH

NR 6 6 0 NR 4

OK OR PA RI SC SD

0 52 6 NR 4 85

TN TX UT VT VA WA

0 0 NA6

WV WI WY


Chart 16. Enforcement: “For Cause” InspectionsQuestion: What is the approximate number of “for cause” examinations conducted byyour agency last year?

1 Colorado’s law requiring the regulation of investment advisers wasadopted in 1998 and took effect on January 1, 1999.

2 Iowa’s law requiring the regulation of investment advisers wasadopted in 1998 and took effect on January 1, 1999.

3 The Massachusetts inspection program was implemented inDecember 1997; no data are available.


5 The Washington securities division conducted an additional 30 “forcause” examinations that involved both broker-dealers andinvestment 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.


AL AK AZ AR CA CO


CT DE DC FL GA HI


ID IL IN IA KS KY


LA ME MD MA MI MN


MS MO MT NE NV NH

yes yes yes yes yes NA1

NJ NM NY NC ND OH


OK OR PA RI SC SD


TN TX UT VT VA WA

yes yes NA2

WV WI WY


Chart 17. Enforcement: Prohibition of Deceptive andUnethical PracticesQuestion: Does your law contain standard provisions prohibiting deceptive and unethicalpractices?


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 ofinvestment advisers.

yes no no no yes no1

AL AK AZ AR CA CO

yes yes no2 no no no

CT DE DC FL GA HI

no3 no yes no4 yes yes

ID IL IN IA KS KY

NR no yes yes no NR

LA ME MD MA MI MN

yes no5 yes no yes yes

MS MO MT NE NV NH

no no6 no NR no NA7

NJ NM NY NC ND OH

no yes yes yes yes no8

OK OR PA RI SC SD

no no yes yes yes yes

TN TX UT VT VA WA

no no NA9

WV WI WY


Chart 18. Enforcement: Adoption of NASAA Policy onDishonest and Unethical PracticesQuestion: Has your state adopted the NASAA Policy on Dishonest or Unethical BusinessPractices for Investment Advisers?

1 Colorado’s law requiring the regulation of investment advisers wasadopted in 1998 and took effect on January 1, 1999. The securitiesdivision 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, 1999. The securitiesbureau 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


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 ofinvestment advisers.

no no no no no yes

AL AK AZ AR CA CO

no yes yes no yes no

CT DE DC FL GA HI

no no yes no1 no no

ID IL IN IA KS KY

NR no no no yes NR

LA ME MD MA MI MN

yes yes no no yes no

MS MO MT NE NV NH

no no no no no NA2

NJ NM NY NC ND OH

no no3 yes no no4 no

OK OR PA RI SC SD

yes no no no5 no no6

TN TX UT VT VA WA

yes yes NA7

WV WI WY


Chart 19. Enforcement: Prohibitions on Custody of ClientFunds/SecuritiesQuestion: Does your state law include prohibitions on advisers having custody of clientfunds/securities?

1 The new Iowa Act grants authority to the securities commissionerto issue rules prohibiting such practices by advisers. Therecurrently are no plans to adopt such a rule.


3 Oregon imposes additional requirements if an investment adviserhas custody of client funds/securities; however, the firm is notprohibited from having custody of funds and/or securities.

4 South Carolina requires that advisers with custody of a client’sfunds and/or securities post a bond.

5 Vermont does not prohibit such practices but does impose certainrules and reporting requirements.

6 Washington requires that the investment adviser meet the $25,000net 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 ofinvestment advisers.

yes no yes no no1 yes

AL AK AZ AR CA CO

yes yes yes yes yes no

CT DE DC FL GA HI


ID IL IN IA KS KY


LA ME MD MA MI MN

yes yes yes yes no yes

MS MO MT NE NV NH

yes yes yes yes yes NA2

NJ NM NY NC ND OH

no no no no yes yes

OK OR PA RI SC SD


TN TX UT VT VA WA

no yes NA3

WV WI WY


Chart 20. Enforcement: Criminal PenaltiesQuestion: Does your state law include criminal penalties for violations of antifraudprovisions specific to investment advisers?

1 In California, criminal cases are referred to the state attorneygeneral or local district attorney.


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 ofinvestment advisers.

INA 1 NR 3 NR NA1

AL AK AZ AR CA CO

2 3 1 3 6 2

CT DE DC FL GA HI

1 INA INA NA2 1 0

ID IL IN IA KS KY

NR 0 20 INA INA NR

LA ME MD MA MI MN

NA 9 6 1 2 NR

MS MO MT NE NV NH

Less than 10 03 NR 1 1 NA4

NJ NM NY NC ND OH

1 1 4 10 NR 0

OK OR PA RI SC SD

INA 4 10 NR 11 3

TN TX UT VT VA WA

0 1 NA5

WV WI WY


Chart 21. Enforcement: Actions Against Investment AdvisersQuestion: What was the number of actions taken against investment advisers by youragency in the last year?

1 Colorado’s law requiring the regulation of investment advisers wasadopted in 1998 and took effect on January 1, 1999.

2 Iowa’s law requiring the regulation of investment advisers wasadopted in 1998 and took effect on January 1, 1999.

3 Although there are no actions reported against individuals who actsolely as investment advisers, New Mexico reports that there areenforcement actions involving individuals who act both asinvestment advisers and stockbrokers. These cases are generallyclassified as actions against stockbrokers.


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 ofinvestment advisers.

yes no NR yes yes yes

AL AK AZ AR CA CO

yes NR yes yes yes yes

CT DE DC FL GA HI

yes yes no yes no no

ID IL IN IA KS KY

NR NR yes no no NR

LA ME MD MA MI MN

no yes yes yes yes yes

MS MO MT NE NV NH

yes yes no yes yes NA1

NJ NM NY NC ND OH

yes no yes no yes yes

OK OR PA RI SC SD

yes no yes yes yes no

TN TX UT VT VA WA

no no NA2

WV WI WY


Chart 22. Enforcement: Private Right of ActionQuestion: Does your state law include a private right of action for consumers defraudedunder the investment adviser portion of the Act?


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 ofinvestment advisers.

X/2 NA NR X/5 2/X 2/5

AL AK AZ AR CA CO

2/X NR 2 5/122 2/X 5/7

CT DE DC FL GA HI

X/3 X/5 NA NR NA NA

ID IL IN IA KS KY

NR NR 3/23 NA NA NR

LA ME MD MA MI MN

NA 3/X 5 3/X 3 NR

MS MO MT NE NV NH

2 2/5 NA 2 5 NA4

NJ NM NY NC ND OH

NR NA 4/15 NA 3/X NR

OK OR PA RI SC SD

2/16 NA 4/2 3/27 2/X NA

TN TX UT VT VA WA

NA NA NA8

WV WI WY


Chart 23. Enforcement: Statute of Limitations for PrivateRight of ActionQuestion: 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 inquestion. The second number refers to the number of years fromthe time the violation was discovered or should reasonably havebeen discovered.

2 The limitations period is 12 years for fraud and 5 years for all otherviolations.

3 Whichever is less.4 Currently, Ohio does not regulate investment advisers. At press


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 ofinvestment advisers.


AlabamaSecurities Commission770 Washington Street, Suite 570Montgomery, AL 36130-4700T 334-242-2984

800-222-1253*F 334-242-0240

AlaskaDept. of Commerce & Economic DevelopmentDivision of Banking, Securities, & CorporationsState Office Building, 9th floor333 Willoughby AvenueJuneau, AK 99811-0807

Mailing addressP.O. Box 110807Juneau, AK 99811-0807T 907-465-2521F 907-465-2549www. commerce.state.ak.us/bsc/secur.htm

ArizonaCorporation CommissionSecurities Division1300 West Washington, 3rd FloorPhoenix, AZ 85007T 602-542-4242F 602-594-7470www.ccsd.cc.state.az.us

ArkansasSecurities DepartmentHeritage West Building, Suite 300201 E. Markham StreetLittle Rock, AR 72201T 501-324-9260

800-981-4429*F 501-324-9268www.state.ar.us/arsec

CaliforniaDepartment of Corporations3700 Wilshire Boulevard, Suite 600Los Angeles, CA 90010T 213-736-2288F 213-736-2117www.corp.ca.gov

ColoradoDepartment of Regulatory AgenciesDivision of Securities 1580 Lincoln Street, Suite 420Denver, CO 80203T 303-894-2320F 303-861-2126www.dora.state.co.us/securities/

ConnecticutDepartment of BankingDivision of Securities260 Constitution PlazaHartford, CT 06103-1800T 860-240-8230

800-831-7225*F 860-240-8295www.state.ct.us/dob

State Securities Offices Directory

*Toll-free “800” numbers generally can be accessed only by in-stateresidents.

DelawareDepartment of JusticeDivision of SecuritiesCarvel State Office Building820 N. French Street, 5th FloorWilmington, DE 19801T 302-577-8424F 302-577-6987

District of ColumbiaDept. of Insurance and Securities RegulationSecurities Bureau810 First Street NE, Room 701Washington, DC 20002

Mailing addressPO Box 37378Washington, DC 20013T 202-727-8000 F 202-727-3351

FloridaOffice of the ComptrollerDepartment of Banking & FinanceThe Capitol, Plaza Level101 Gaines StreetTallahassee, FL 32399-0350T 850-410-9805F 850-410-9431www.dbf.state.fl.us

GeorgiaOffice of the Secretary of StateSecurities & Business Regulation DivisionSuite 802, West TowerTwo Martin Luther King, Jr. DriveAtlanta, GA 30334T 404-656-3920F 404-651-6451www.sos.state.ga.us/securities/

HawaiiDepartment of Commerce & Consumer Affairs1010 Richards StreetHonolulu, HI 96813

Mailing addressPO Box 40Honolulu, HI 96810T 808-586-2744F 808-586-2733www.hawaii.gov/icsd/lrb/ph_dcca.htm

IdahoDepartment of FinanceSecurities Bureau700 West State Street, 2nd floorBoise, ID 83720

Mailing addressPO Box 83720Boise, ID 83720-0031T 208-332-8004F 208-332-8099www.state.id.us/finance/dof.htm




IllinoisOffice of the Secretary of StateSecurities DepartmentLincoln Tower, Suite 200520 South Second StreetSpringfield, IL 62701T 217-782-2256

800-628-7937*F 217-524-9637www.sos.state.il.us/depts/securities/sec_home.html

IndianaOffice of Secretary of State Securities Division302 West Washington Street, Room E-111Indianapolis, IN 46204T 317-232-6681

800-223-8791*F 317-233-3675www.ai.org/sos/security

IowaInsurance DivisionSecurities Bureau340 E. MapleDes Moines, IA 50319T 515-281-4441

800-351-4665*F 515-281-6467www.state.ia.us/government/com/ins/security/se-curity.htm

KansasOffice of the Securities Commissioner618 South Kansas Avenue, 2nd floorTopeka, KS 66603-3804T 785-296-3307

800-232-9580*F 785-296-6872www.cjnetworks.com/~ksecom

KentuckyDepartment of Financial InstitutionsDivision of Securities1025 Capital Center Drive, Suite 200Frankfort, KY 40601T 502-573-3390

800-223-2579*F 502-573-8787www.dfi.state.ky.us

LouisianaSecurities Commission3445 North Causeway Blvd.Suite 509Metairie, LA 70002T 504-846-6970F 504-846-6971www.premier.net/~LA._OFI

MaineDept. of Professional and Financial RegulationSecurities Division121 State House StationAugusta, ME 04333-0121T 207-624-8551F 207-624-8590www.state.me.us/pfr/sec/sechome2.htm


MarylandSecurities DivisionOffice of Attorney General200 St. Paul Place, 20th FloorBaltimore, MD 21202-2020T 410-576-6360F 410-576-6532www.oag.state.md.us

MassachusettsOffice of the Secretary of the CommonwealthSecurities DivisionOne Ashburton Place, Room 1701Boston, MA 02108T 617-727-3548

800-269-5428*F 617-248-0177www.state.ma.us/sec

MichiganDept. of Consumer & Industry Services Corpo-ration, Securities & Land Development Bureau6546 Mercantile WayLansing, MI 48911

Mailing AddressPO Box 30222Lansing, MI 48909T 517-334-6213F 517-334-7813www.cis.state.mi.us

MinnesotaDepartment of Commerce133 East Seventh StreetSt. Paul, MN 55101T 651-296-2284F 651-296-4328www.commerce.state.mn.us

MississippiOffice of the Secretary of State Securities Division202 North Congress Street, Suite 601Jackson, MS 39201www.sos.state.ms.us

Mailing addressPO Box 136Jackson, MS 39205T 601-359-6371

800-804-6364*F 601-359-2663www.sos.state.ms.us

MissouriOffice of the Secretary of State600 West Main StreetJefferson City, MO 65101T 573-751-4136

800-721-7996*F 573-526-3124http://mosl.sos.state.mo.us/




MontanaOffice of the State Auditor Securities Department126 North Sanders, Mitchell Bldg., Room 270Helena, MT 59620

Mailing addressPO Box 4009Helena, MT 59604T 406-444-2040

800-332-6148*F 406-444-5558www.mt.gov/sao

NebraskaDepartment of Banking and FinanceBureau of Securities1200 N Street, Suite 311Lincoln, NE 68508

Mailing addressPO Box 95006Lincoln, NE 68509-5006T 402-471-3445www.ndbf.org

NevadaOffice of the Secretary of State Securities Division555 E. Washington Avenue, Suite 5200Las Vegas, NV 89101T 702-486-2440

800-758-6440*F 702-486-2452www.state.nv.us

New HampshireOffice of the Secretary of StateBureau of Securities RegulationState House, Annex - Room 317A25 Capital StreetConcord, NH 03301-4989

Mailing addressState House, Room 204Concord, NH 03301-4989T 603-271-1463

800-994-4200*F 603-271-7933

New JerseyDepartment of Law & Public SafetyBureau of Securities153 Halsey Street, 6th floorNewark, NJ 07102

Mailing addressPO Box 47029Newark, NJ 07101T 973-504-3600F 973-504-3639www.state.nj.us/lps/ca/bos.htm

New MexicoRegulation and Licensing DepartmentSecurities Division725 St. Michaels DriveSanta Fe, NM 87505T 505-827-7140

800-704-5533*F 505-984-0617www.state.nm.us/rld/sec/sechome.htm


New YorkDepartment of LawBureau of Investor Protection and Securities120 Broadway, 23rd FloorNew York, NY 10271T 212-416-8200F 212-416-8816www.oag.state.ny.us

North CarolinaDepartment of the Secretary of StateSecurities Division300 N. Salisbury Street, Suite 100Raleigh, NC 27603-5909T 919-733-3924

800-688-4507*F 919-821-0818www.secstate.state.nc.us/secstate/sec.htm

North DakotaOffice of the Securities CommissionerState Capitol - 5th Floor600 East Boulevard AvenueBismarck, ND 58505-0510T 701-328-2910

800-297-5124*F 701-255-3113

OhioDepartment of CommerceDivision of Securities77 South High Street, 22nd floorColumbus, OH 43215T 614-644-7381

800-788-1194*F 614-466-3316www.securities.state.oh.us

OklahomaDepartment of SecuritiesFirst National Center, Suite 860120 N. RobinsonOklahoma City, OK 73102T 405-280-7700F 405-280-7742www.securities.state.ok.us

OregonDepartment of Consumer & Business ServicesDivision of Finance and Corporate Securities350 Winter Street NE, Room 410Salem, OR 97310T 503-378-4387F 503-947-7862www.cbs.state.or.us/external/dfcs




PennsylvaniaSecurities CommissionEastgate Office Building, 2nd floor1010 N. 7th StreetHarrisburg, PA 17102-1410T 717-787-8061

800-600-0007* F 717-783-5122www.psc.state.pa.us

Rhode IslandDepartment of Business Regulation Securities Division233 Richmond Street, Suite 232Providence, RI 02903-4232T 401-222-3048F 401-222-5629

South CarolinaOffice of the Attorney GeneralSecurities Division1000 Assembly StreetColumbia, SC 29201

Mailing addressPO Box 11549Columbia, SC 29211-1549T 803-734-9916F 803-734-0032www.scattorneygeneral.org

South DakotaDepartment of Commerce and RegulationDivision of Securities118 West Capitol AvenuePierre, SD 57501-2017T 605-773-4823F 605-773-5953

TennesseeDepartment of Commerce & InsuranceSecurities DivisionDavy Crockett Tower, Suite 680500 James Robertson ParkwayNashville, TN 37243-0584T 615-741-2947

800-532-8375*F 615-532-8375www.state.tn.us/commerce/securdiv.html

TexasState Securities Board200 East 10th Street, 5th FloorAustin, TX 78701Mailing address: PO Box 13167Austin, TX 78711-3167T 512-305-8300F 512-305-8310www.ssb.state.tx.us


UtahDepartment of CommerceDivision of Securities160 East 300 South, 2nd floorSalt Lake City, UT 84111

Mailing addressPO Box 146760Salt Lake City, UT 84114-6760T 801-530-6600

800-721-SAFE*F 801-530-6980www.commerce.state.ut.us

VermontDepartment of BankingSecurities Division89 Main Street, 2nd floorMontpelier, VT 05620

Mailing address89 Main Street, Drawer 20Montpelier, VT 05602-3101T 802-828-3420F 802-828-2896www.state.vt.us/bis

VirginiaState Corporation CommissionDivision of Securities and Retail Franchising1300 East Main Street, 9th floorRichmond, VA 23219

Mailing addressPO Box 1197Richmond, VA 23218-1197T 804-371-9051

800-552-7945*F 804-371-9911www.state.va.us/scc

WashingtonDepartment of Financial InstitutionsSecurities DivisionGeneral Administration Bldg.210 -11th Street, 3rd floor WestOlympia, WA 98504-1200

Mailing addressPO Box 9033Olympia, WA 98507-9033T 360-902-8760

800-372-8303*F 360-586-5068www.wa.gov/dfi/securities



West VirginiaState Auditor’s OfficeSecurities DivisionState Capitol BuildingBuilding 1, Room W-110Charleston, WV 25305T 304-558-2257

888-509-6567F 304-558-4211www.wvauditor.com

WisconsinDepartment of Financial InstitutionsDivision of Securities345 W. Washington Avenue, 4th floorMadison, WI 53703

Mailing addressPO Box 1768Madison, WI 53701-1768T 608-261-9555

800-472-4325*F 608-256-1259www.wdfi.org/fi/securities/secur.htm

WyomingOffice of the Secretary of StateSecurities DivisionState Capitol, Room 109200 W. 24th StreetCheyenne, WY 82002T 307-777-7370F 307-777-5339http://soswy.state.wy.us




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Washington, DC 20049www.research.aarp.org

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