1. U.S. Code
  2. title 15
  3. chapter 2D
  4. subchapter II
  5. § 80b-2

Collapse to view only § 80b-2. Definitions

§ 80b–1. Findings
Upon the basis of facts disclosed by the record and report of the Securities and Exchange Commission made pursuant to section 79z–4 1
1 See References in Text note below.
of this title, and facts otherwise disclosed and ascertained, it is found that investment advisers are of national concern, in that, among other things—
(1) their advice, counsel, publications, writings, analyses, and reports are furnished and distributed, and their contracts, subscription agreements, and other arrangements with clients are negotiated and performed, by the use of the mails and means and instrumentalities of interstate commerce;
(2) their advice, counsel, publications, writings, analyses, and reports customarily relate to the purchase and sale of securities traded on national securities exchanges and in interstate over-the-counter markets, securities issued by companies engaged in business in interstate commerce, and securities issued by national banks and member banks of the Federal Reserve System; and
(3) the foregoing transactions occur in such volume as substantially to affect interstate commerce, national securities exchanges, and other securities markets, the national banking system and the national economy.
(Aug. 22, 1940, ch. 686, title II, § 201, 54 Stat. 847.)

CITE AS: 15 USC 80b-1

§ 80b–2. Definitions
(a) In generalWhen used in this subchapter, unless the context otherwise requires, the following definitions shall apply:
(1) “Assignment” includes any direct or indirect transfer or hypothecation of an investment advisory contract by the assignor or of a controlling block of the assignor’s outstanding voting securities by a security holder of the assignor; but if the investment adviser is a partnership, no assignment of an investment advisory contract shall be deemed to result from the death or withdrawal of a minority of the members of the investment adviser having only a minority interest in the business of the investment adviser, or from the admission to the investment adviser of one or more members who, after such admission, shall be only a minority of the members and shall have only a minority interest in the business.
(2) “Bank” means (A) a banking institution organized under the laws of the United States or a Federal savings association, as defined in section 1462(5) of title 12, (B) a member bank of the Federal Reserve System, (C) any other banking institution, savings association, as defined in section 1462(4) of title 12, or trust company, whether incorporated or not, doing business under the laws of any State or of the United States, a substantial portion of the business of which consists of receiving deposits or exercising fiduciary powers similar to those permitted to national banks under the authority of the Comptroller of the Currency, and which is supervised and examined by State or Federal authority having supervision over banks or savings associations, and which is not operated for the purpose of evading the provisions of this subchapter, and (D) a receiver, conservator, or other liquidating agent of any institution or firm included in clauses (A), (B), or (C) of this paragraph.
(3) The term “broker” has the same meaning as given in section 3 of the Securities Exchange Act of 1934 [15 U.S.C. 78c].
(4) “Commission” means the Securities and Exchange Commission.
(5) “Company” means a corporation, a partnership, an association, a joint-stock company, a trust, or any organized group of persons, whether incorporated or not; or any receiver, trustee in a case under title 11, or similar official, or any liquidating agent for any of the foregoing, in his capacity as such.
(6) “Convicted” includes a verdict, judgment, or plea of guilty, or a finding of guilt on a plea of nolo contendere, if such verdict, judgment, plea, or finding has not been reversed, set aside, or withdrawn, whether or not sentence has been imposed.
(7) The term “dealer” has the same meaning as given in section 3 of the Securities Exchange Act of 1934 [15 U.S.C. 78c], but does not include an insurance company or investment company.
(8) “Director” means any director of a corporation or any person performing similar functions with respect to any organization, whether incorporated or unincorporated.
(9) “Exchange” means any organization, association, or group of persons, whether incorporated or unincorporated, which constitutes, maintains, or provides a market place or facilities for bringing together purchasers and sellers of securities or for otherwise performing with respect to securities the functions commonly performed by a stock exchange as that term is generally understood, and includes the market place and the market facilities maintained by such exchange.
(10) “Interstate commerce” means trade, commerce, transportation, or communication among the several States, or between any foreign country and any State, or between any State and any place or ship outside thereof.
(11) “Investment adviser” means any person who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities, or who, for compensation and as part of a regular business, issues or promulgates analyses or reports concerning securities; but does not include (A) a bank, or any bank holding company as defined in the Bank Holding Company Act of 1956 [12 U.S.C. 1841 et seq.] which is not an investment company, except that the term “investment adviser” includes any bank or bank holding company to the extent that such bank or bank holding company serves or acts as an investment adviser to a registered investment company, but if, in the case of a bank, such services or actions are performed through a separately identifiable department or division, the department or division, and not the bank itself, shall be deemed to be the investment adviser; (B) any lawyer, accountant, engineer, or teacher whose performance of such services is solely incidental to the practice of his profession; (C) any broker or dealer whose performance of such services is solely incidental to the conduct of his business as a broker or dealer and who receives no special compensation therefor; (D) the publisher of any bona fide newspaper, news magazine or business or financial publication of general and regular circulation; (E) any person whose advice, analyses or reports relate to no securities other than securities which are direct obligations of or obligations guaranteed as to principal or interest by the United States, or securities issued or guaranteed by corporations in which the United States has a direct or indirect interest which shall have been designated by the Secretary of the Treasury, pursuant to section 3(a)(12) of the Securities Exchange Act of 1934 [15 U.S.C. 78c(a)(12)], as exempted securities for the purposes of that Act [15 U.S.C. 78a et seq.]; (F) any nationally recognized statistical rating organization, as that term is defined in section 3(a)(62) of the Securities Exchange Act of 1934 [15 U.S.C. 78c(a)(62)], unless such organization engages in issuing recommendations as to purchasing, selling, or holding securities or in managing assets, consisting in whole or in part of securities, on behalf of others;; 1
1 So in original.
(G) any family office, as defined by rule, regulation, or order of the Commission, in accordance with the purposes of this subchapter; or (H) such other persons not within the intent of this paragraph, as the Commission may designate by rules and regulations or order.
(12) “Investment company”, affiliated person, and “insurance company” have the same meanings as in the Investment Company Act of 1940 [15 U.S.C. 80a–1 et seq.]. “Control” means the power to exercise a controlling influence over the management or policies of a company, unless such power is solely the result of an official position with such company.
(13) “Investment supervisory services” means the giving of continuous advice as to the investment of funds on the basis of the individual needs of each client.
(14) “Means or instrumentality of interstate commerce” includes any facility of a national securities exchange.
(15) “National securities exchange” means an exchange registered under section 6 of the Securities Exchange Act of 1934 [15 U.S.C. 78f].
(16) “Person” means a natural person or a company.
(17) The term “person associated with an investment adviser” means any partner, officer, or director of such investment adviser (or any person performing similar functions), or any person directly or indirectly controlling or controlled by such investment adviser, including any employee of such investment adviser, except that for the purposes of section 80b–3 of this title (other than subsection (f) thereof), persons associated with an investment adviser whose functions are clerical or ministerial shall not be included in the meaning of such term. The Commission may by rules and regulations classify, for the purposes of any portion of portions of this subchapter, persons, including employees controlled by an investment adviser.
(18) “Security” means any note, stock, treasury stock, security future, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security (including a certificate of deposit) or on any group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a “security”, or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guaranty of, or warrant or right to subscribe to or purchase any of the foregoing.
(19) “State” means any State of the United States, the District of Columbia, Puerto Rico, the Virgin Islands, or any other possession of the United States.
(20) “Underwriter” means any person who has purchased from an issuer with a view to, or sells for an issuer in connection with, the distribution of any security, or participates or has a direct or indirect participation in any such undertaking, or participates or has a participation in the direct or indirect underwriting of any such undertaking; but such term shall not include a person whose interest is limited to a commission from an underwriter or dealer not in excess of the usual and customary distributor’s or seller’s commission. As used in this paragraph the term “issuer” shall include in addition to an issuer, any person directly or indirectly controlling or controlled by the issuer, or any person under direct or indirect common control with the issuer.
(21) “Securities Act of 1933” [15 U.S.C. 77a et seq.], “Securities Exchange Act of 1934” [15 U.S.C. 78a et seq.], and “Trust Indenture Act of 1939” [15 U.S.C. 77aaa et seq.], mean those Acts, respectively, as heretofore or hereafter amended.
(22) “Business development company” means any company which is a business development company as defined in section 80a–2(a)(48) of this title and which complies with section 80a–54 of this title, except that—
(A) the 70 per centum of the value of the total assets condition referred to in sections 80a–2(a)(48) and 80a–54 of this title shall be 60 per centum for purposes of determining compliance therewith;
(B) such company need not be a closed-end company and need not elect to be subject to the provisions of sections 80a–54 through 80a–64 of this title; and
(C) the securities which may be purchased pursuant to section 80a–54(a) of this title may be purchased from any person.
For purposes of this paragraph, all terms in sections 80a–2(a)(48) and 80a–54 of this title shall have the same meaning set forth in subchapter I as if such company were a registered closed-end investment company, except that the value of the assets of a business development company which is not subject to the provisions of sections 80a–54 through 80a–64 of this title shall be determined as of the date of the most recent financial statements which it furnished to all holders of its securities, and shall be determined no less frequently than annually.
(23) “Foreign securities authority” means any foreign government, or any governmental body or regulatory organization empowered by a foreign government to administer or enforce its laws as they relate to securities matters.
(24) “Foreign financial regulatory authority” means any (A) foreign securities authority, (B) other governmental body or foreign equivalent of a self-regulatory organization empowered by a foreign government to administer or enforce its laws relating to the regulation of fiduciaries, trusts, commercial lending, insurance, trading in contracts of sale of a commodity for future delivery, or other instruments traded on or subject to the rules of a contract market, board of trade or foreign equivalent, or other financial activities, or (C) membership organization a function of which is to regulate the participation of its members in activities listed above.
(25) “Supervised person” means any partner, officer, director (or other person occupying a similar status or performing similar functions), or employee of an investment adviser, or other person who provides investment advice on behalf of the investment adviser and is subject to the supervision and control of the investment adviser.
(26) The term “separately identifiable department or division” of a bank means a unit—
(A) that is under the direct supervision of an officer or officers designated by the board of directors of the bank as responsible for the day-to-day conduct of the bank’s investment adviser activities for one or more investment companies, including the supervision of all bank employees engaged in the performance of such activities; and
(B) for which all of the records relating to its investment adviser activities are separately maintained in or extractable from such unit’s own facilities or the facilities of the bank, and such records are so maintained or otherwise accessible as to permit independent examination and enforcement by the Commission of this subchapter or the Investment Company Act of 1940 [15 U.S.C. 80a–1 et seq.] and rules and regulations promulgated under this subchapter or the Investment Company Act of 1940.
(27) The terms “security future” and “narrow-based security index” have the same meanings as provided in section 3(a)(55) of the Securities Exchange Act of 1934 [15 U.S.C. 78c(a)(55)].
(28) The term “credit rating agency” has the same meaning as in section 3 of the Securities Exchange Act of 1934 [15 U.S.C. 78c].
(29)2
2 So in original. Another par. (29) is set out after par. (30).
The term “private fund” means an issuer that would be an investment company, as defined in section 3 of the Investment Company Act of 1940 (15 U.S.C. 80a–3), but for section 3(c)(1) or 3(c)(7) of that Act.
(30) The term “foreign private adviser” means any investment adviser who—
(A) has no place of business in the United States;
(B) has, in total, fewer than 15 clients and investors in the United States in private funds advised by the investment adviser;
(C) has aggregate assets under management attributable to clients in the United States and investors in the United States in private funds advised by the investment adviser of less than $25,000,000, or such higher amount as the Commission may, by rule, deem appropriate in accordance with the purposes of this subchapter; and
(D) neither—
(i) holds itself out generally to the public in the United States as an investment adviser; nor
(ii) acts as—(I) an investment adviser to any investment company registered under the Investment Company Act of 1940 [15 U.S.C. 80a–1 et seq.]; or(II) a company that has elected to be a business development company pursuant to section 54 of the Investment Company Act of 1940 (15 U.S.C. 80a–53), and has not withdrawn its election.
(29)3
3 So in original. Another par. (29) is set out preceding par. (30).
The terms “commodity pool”, “commodity pool operator”, “commodity trading advisor”, “major swap participant”, “swap”, “swap dealer”, and “swap execution facility” have the same meanings as in section 1a of title 7.
(b) Applicability to Federal or State government, agency, or instrumentality, or to officers, agents, or employees thereof
(c) Consideration of promotion of efficiency, competition, and capital formation
(Aug. 22, 1940, ch. 686, title II, § 202, 54 Stat. 847; Pub. L. 86–70, § 12(c), June 25, 1959, 73 Stat. 143; Pub. L. 86–624, § 7(d), July 12, 1960, 74 Stat. 412; Pub. L. 86–750, § 1, Sept. 13, 1960, 74 Stat. 885; Pub. L. 89–485, § 13(j), July 1, 1966, 80 Stat. 243; Pub. L. 91–547, § 23, Dec. 14, 1970, 84 Stat. 1430; Pub. L. 95–598, title III, § 311, Nov. 6, 1978, 92 Stat. 2676; Pub. L. 96–477, title II, § 201, Oct. 21, 1980, 94 Stat. 2289; Pub. L. 97–303, § 6, Oct. 13, 1982, 96 Stat. 1410; Pub. L. 100–181, title VII, § 701, Dec. 4, 1987, 101 Stat. 1263; Pub. L. 101–550, title II, § 206(b), Nov. 15, 1990, 104 Stat. 2720; Pub. L. 104–290, title III, § 303(c), Oct. 11, 1996, 110 Stat. 3438; Pub. L. 106–102, title II, §§ 217–219, 224, Nov. 12, 1999, 113 Stat. 1399, 1400, 1402; Pub. L. 106–554, § 1(a)(5) [title II, § 209(a)(2), (4)], Dec. 21, 2000, 114 Stat. 2763, 2763A–435, 2763A–436; Pub. L. 109–291, § 4(b)(3)(A), (B), Sept. 29, 2006, 120 Stat. 1337; Pub. L. 109–351, title IV, § 401(b)(1), Oct. 13, 2006, 120 Stat. 1973; Pub. L. 111–203, title IV, §§ 402(a), 409(a), title VII, § 770, title IX, § 986(d), July 21, 2010, 124 Stat. 1570, 1575, 1801, 1936.)

CITE AS: 15 USC 80b-2

§ 80b–3. Registration of investment advisers
(a) Necessity of registration
(b) Investment advisers who need not be registeredThe provisions of subsection (a) shall not apply to—
(1) any investment adviser, other than an investment adviser who acts as an investment adviser to any private fund, all of whose clients are residents of the State within which such investment adviser maintains his or its principal office and place of business, and who does not furnish advice or issue analyses or reports with respect to securities listed or admitted to unlisted trading privileges on any national securities exchange;
(2) any investment adviser whose only clients are insurance companies;
(3) any investment adviser that is a foreign private adviser;
(4) any investment adviser that is a charitable organization, as defined in section 80a–3(c)(10)(D) of this title, or is a trustee, director, officer, employee, or volunteer of such a charitable organization acting within the scope of such person’s employment or duties with such organization, whose advice, analyses, or reports are provided only to one or more of the following:
(A) any such charitable organization;
(B) a fund that is excluded from the definition of an investment company under section 80a–3(c)(10)(B) of this title; or
(C) a trust or other donative instrument described in section 80a–3(c)(10)(B) of this title, or the trustees, administrators, settlors (or potential settlors), or beneficiaries of any such trust or other instrument;
(5) any plan described in section 414(e) of title 26, any person or entity eligible to establish and maintain such a plan under title 26, or any trustee, director, officer, or employee of or volunteer for any such plan or person, if such person or entity, acting in such capacity, provides investment advice exclusively to, or with respect to, any plan, person, or entity or any company, account, or fund that is excluded from the definition of an investment company under section 80a–3(c)(14) of this title;
(6)
(A) any investment adviser that is registered with the Commodity Futures Trading Commission as a commodity trading advisor whose business does not consist primarily of acting as an investment adviser, as defined in section 80b–2(a)(11) of this title, and that does not act as an investment adviser to—
(i) an investment company registered under subchapter I of this chapter; or
(ii) a company which has elected to be a business development company pursuant to section 80a–53 of this title and has not withdrawn its election; or
(B) any investment adviser that is registered with the Commodity Futures Trading Commission as a commodity trading advisor and advises a private fund, provided that, if after July 21, 2010, the business of the advisor should become predominately the provision of securities-related advice, then such adviser shall register with the Commission;
(7) any investment adviser, other than any entity that has elected to be regulated or is regulated as a business development company pursuant to section 80a–53 of this title, who solely advises—
(A) small business investment companies that are licensees under the Small Business Investment Act of 1958 [15 U.S.C. 661 et seq.];
(B) entities that have received from the Small Business Administration notice to proceed to qualify for a license as a small business investment company under the Small Business Investment Act of 1958, which notice or license has not been revoked; or
(C) applicants that are affiliated with 1 or more licensed small business investment companies described in subparagraph (A) and that have applied for another license under the Small Business Investment Act of 1958, which application remains pending; or
(8) any investment adviser, other than an entity that has elected to be regulated or is regulated as a business development company pursuant to section 80a–53 of this title, who solely advises—
(A) rural business investment companies (as defined in section 2009cc of title 7); or
(B) companies that have submitted to the Secretary of Agriculture an application in accordance with section 2009cc–3(b) of title 7 that—
(i) have received from the Secretary of Agriculture a letter of conditions, which has not been revoked; or
(ii) are affiliated with 1 or more rural business investment companies described in subparagraph (A).
(c) Procedure for registration; filing of application; effective date of registration; amendment of registration
(1) An investment adviser, or any person who presently contemplates becoming an investment adviser, may be registered by filing with the Commission an application for registration in such form and containing such of the following information and documents as the Commission, by rule, may prescribe as necessary or appropriate in the public interest or for the protection of investors:
(A) the name and form of organization under which the investment adviser engages or intends to engage in business; the name of the State or other sovereign power under which such investment adviser is organized; the location of his or its principal office, principal place of business, and branch offices, if any; the names and addresses of his or its partners, officers, directors, and persons performing similar functions or, if such an investment adviser be an individual, of such individual; and the number of his or its employees;
(B) the education, the business affiliations for the past ten years, and the present business affiliations of such investment adviser and of his or its partners, officers, directors, and persons performing similar functions and of any controlling person thereof;
(C) the nature of the business of such investment adviser, including the manner of giving advice and rendering analyses or reports;
(D) a balance sheet certified by an independent public accountant and other financial statements (which shall, as the Commission specifies, be certified);
(E) the nature and scope of the authority of such investment adviser with respect to clients’ funds and accounts;
(F) the basis or bases upon which such investment adviser is compensated;
(G) whether such investment adviser, or any person associated with such investment adviser, is subject to any disqualification which would be a basis for denial, suspension, or revocation of registration of such investment adviser under the provisions of subsection (e) of this section; and
(H) a statement as to whether the principal business of such investment adviser consists or is to consist of acting as investment adviser and a statement as to whether a substantial part of the business of such investment adviser, consists or is to consist of rendering investment supervisory services.
(2) Within forty-five days of the date of the filing of such application (or within such longer period as to which the applicant consents) the Commission shall—
(A) by order grant such registration; or
(B) institute proceedings to determine whether registration should be denied. Such proceedings shall include notice of the grounds for denial under consideration and opportunity for hearing and shall be concluded within one hundred twenty days of the date of the filing of the application for registration. At the conclusion of such proceedings the Commission, by order, shall grant or deny such registration. The Commission may extend the time for conclusion of such proceedings for up to ninety days if it finds good cause for such extension and publishes its reasons for so finding or for such longer period as to which the applicant consents.
The Commission shall grant such registration if the Commission finds that the requirements of this section are satisfied and that the applicant is not prohibited from registering as an investment adviser under section 80b–3a of this title. The Commission shall deny such registration if it does not make such a finding or if it finds that if the applicant were so registered, its registration would be subject to suspension or revocation under subsection (e) of this section.
(d) Other acts prohibited by subchapter
(e) Censure, denial, or suspension of registration; notice and hearingThe Commission, by order, shall censure, place limitations on the activities, functions, or operations of, suspend for a period not exceeding twelve months, or revoke the registration of any investment adviser if it finds, on the record after notice and opportunity for hearing, that such censure, placing of limitations, suspension, or revocation is in the public interest and that such investment adviser, or any person associated with such investment adviser, whether prior to or subsequent to becoming so associated—
(1) has willfully made or caused to be made in any application for registration or report required to be filed with the Commission under this subchapter, or in any proceeding before the Commission with respect to registration, any statement which was at the time and in the light of the circumstances under which it was made false or misleading with respect to any material fact, or has omitted to state in any such application or report any material fact which is required to be stated therein.
(2) has been convicted within ten years preceding the filing of any application for registration or at any time thereafter of any felony or misdemeanor or of a substantially equivalent crime by a foreign court of competent jurisdiction which the Commission finds—
(A) involves the purchase or sale of any security, the taking of a false oath, the making of a false report, bribery, perjury, burglary, any substantially equivalent activity however denominated by the laws of the relevant foreign government, or conspiracy to commit any such offense;
(B) arises out of the conduct of the business of a broker, dealer, municipal securities dealer, investment adviser, bank, insurance company, government securities broker, government securities dealer, fiduciary, transfer agent, credit rating agency, foreign person performing a function substantially equivalent to any of the above, or entity or person required to be registered under the Commodity Exchange Act [7 U.S.C. 1 et seq.] or any substantially equivalent statute or regulation;
(C) involves the larceny, theft, robbery, extortion, forgery, counterfeiting, fraudulent concealment, embezzlement, fraudulent conversion, or misappropriation of funds or securities or substantially equivalent activity however denominated by the laws of the relevant foreign government; or
(D) involves the violation of section 152, 1341, 1342, or 1343 or chapter 25 or 47 of title 18, or a violation of 1
1 So in original. Probably should be “of a”.
substantially equivalent foreign statute.
(3) has been convicted during the 10-year period preceding the date of filing of any application for registration, or at any time thereafter, of—
(A) any crime that is punishable by imprisonment for 1 or more years, and that is not described in paragraph (2); or
(B) a substantially equivalent crime by a foreign court of competent jurisdiction.
(4) is permanently or temporarily enjoined by order, judgment, or decree of any court of competent jurisdiction, including any foreign court of competent jurisdiction, from acting as an investment adviser, underwriter, broker, dealer, municipal securities dealer, government securities broker, government securities dealer, transfer agent, credit rating agency, foreign person performing a function substantially equivalent to any of the above, or entity or person required to be registered under the Commodity Exchange Act [7 U.S.C. 1 et seq.] or any substantially equivalent statute or regulation, or as an affiliated person or employee of any investment company, bank, insurance company, foreign entity substantially equivalent to any of the above, or entity or person required to be registered under the Commodity Exchange Act or any substantially equivalent statute or regulation, or from engaging in or continuing any conduct or practice in connection with any such activity, or in connection with the purchase or sale of any security.
(5) has willfully violated any provision of the Securities Act of 1933 [15 U.S.C. 77a et seq.], the Securities Exchange Act of 1934 [15 U.S.C. 78a et seq.], subchapter I of this chapter, this subchapter, the Commodity Exchange Act [7 U.S.C. 1 et seq.], or the rules or regulations under any such statutes or any rule of the Municipal Securities Rulemaking Board, or is unable to comply with any such provision.
(6) has willfully aided, abetted, counseled, commanded, induced, or procured the violation by any other person of any provision of the Securities Act of 1933 [15 U.S.C. 77a et seq.], the Securities Exchange Act of 1934 [15 U.S.C. 78a et seq.], subchapter I of this chapter, this subchapter, the Commodity Exchange Act [7 U.S.C. 1 et seq.], the rules or regulations under any of such statutes, or the rules of the Municipal Securities Rulemaking Board, or has failed reasonably to supervise, with a view to preventing violations of the provisions of such statutes, rules and regulations, another person who commits such a violation, if such other person is subject to his supervision. For the purposes of this paragraph no person shall be deemed to have failed reasonably to supervise any person, if—
(A) there have been established procedures, and a system for applying such procedures, which would reasonably be expected to prevent and detect, insofar as practicable, any such violation by such other person, and
(B) such person has reasonably discharged the duties and obligations incumbent upon him by reason of such procedures and system without reasonable cause to believe that such procedures and system were not being complied with.
(7) is subject to any order of the Commission barring or suspending the right of the person to be associated with an investment adviser;
(8) has been found by a foreign financial regulatory authority to have—
(A) made or caused to be made in any application for registration or report required to be filed with a foreign securities authority, or in any proceeding before a foreign securities authority with respect to registration, any statement that was at the time and in light of the circumstances under which it was made false or misleading with respect to any material fact, or has omitted to state in any application or report to a foreign securities authority any material fact that is required to be stated therein;
(B) violated any foreign statute or regulation regarding transactions in securities or contracts of sale of a commodity for future delivery traded on or subject to the rules of a contract market or any board of trade; or
(C) aided, abetted, counseled, commanded, induced, or procured the violation by any other person of any foreign statute or regulation regarding transactions in securities or contracts of sale of a commodity for future delivery traded on or subject to the rules of a contract market or any board of trade, or has been found, by the foreign finanical 2
2 So in original. Probably should be “financial”.
regulatory authority, to have failed reasonably to supervise, with a view to preventing violations of statutory provisions, and rules and regulations promulgated thereunder, another person who commits such a violation, if such other person is subject to his supervision; or
(9) is subject to any final order of a State securities commission (or any agency or officer performing like functions), State authority that supervises or examines banks, savings associations, or credit unions, State insurance commission (or any agency or office performing like functions), an appropriate Federal banking agency (as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813(q))), or the National Credit Union Administration, that—
(A) bars such person from association with an entity regulated by such commission, authority, agency, or officer, or from engaging in the business of securities, insurance, banking, savings association activities, or credit union activities; or
(B) constitutes a final order based on violations of any laws or regulations that prohibit fraudulent, manipulative, or deceptive conduct.
(f) Bar or suspension from association with investment adviser; notice and hearing
(g) Registration of successor to business of investment adviser
(h) Withdrawal of registration
(i) Money penalties in administrative proceedings
(1) Authority of Commission
(A) In generalIn any proceeding instituted pursuant to subsection (e) or (f) against any person, the Commission may impose a civil penalty if it finds, on the record after notice and opportunity for hearing, that such penalty is in the public interest and that such person—
(i) has willfully violated any provision of the Securities Act of 1933 [15 U.S.C. 77a et seq.], the Securities Exchange Act of 1934 [15 U.S.C. 78a et seq.], subchapter I of this chapter, or this subchapter, or the rules or regulations thereunder;
(ii) has willfully aided, abetted, counseled, commanded, induced, or procured such a violation by any other person;
(iii) has willfully made or caused to be made in any application for registration or report required to be filed with the Commission under this subchapter, or in any proceeding before the Commission with respect to registration, any statement which was, at the time and in the light of the circumstances under which it was made, false or misleading with respect to any material fact, or has omitted to state in any such application or report any material fact which was required to be stated therein; or
(iv) has failed reasonably to supervise, within the meaning of subsection (e)(6), with a view to preventing violations of the provisions of this subchapter and the rules and regulations thereunder, another person who commits such a violation, if such other person is subject to his supervision; 3
3 So in original. The semicolon probably should be a period.
(B) Cease-and-desist proceedingsIn any proceeding instituted pursuant to subsection (k) against any person, the Commission may impose a civil penalty if the Commission finds, on the record, after notice and opportunity for hearing, that such person—
(i) is violating or has violated any provision of this subchapter, or any rule or regulation issued under this subchapter; or
(ii) is or was a cause of the violation of any provision of this subchapter, or any rule or regulation issued under this subchapter.
(2) Maximum amount of penalty
(A) First tier
(B) Second tier
(C) Third tierNotwithstanding subparagraphs (A) and (B), the maximum amount of penalty for each such act or omission shall be $100,000 for a natural person or $500,000 for any other person if—
(i) the act or omission described in paragraph (1) involved fraud, deceit, manipulation, or deliberate or reckless disregard of a regulatory requirement; and
(ii) such act or omission directly or indirectly resulted in substantial losses or created a significant risk of substantial losses to other persons or resulted in substantial pecuniary gain to the person who committed the act or omission.
(3) Determination of public interestIn considering under this section whether a penalty is in the public interest, the Commission may consider—
(A) whether the act or omission for which such penalty is assessed involved fraud, deceit, manipulation, or deliberate or reckless disregard of a regulatory requirement;
(B) the harm to other persons resulting either directly or indirectly from such act or omission;
(C) the extent to which any person was unjustly enriched, taking into account any restitution made to persons injured by such behavior;
(D) whether such person previously has been found by the Commission, another appropriate regulatory agency, or a self-regulatory organization to have violated the Federal securities laws, State securities laws, or the rules of a self-regulatory organization, has been enjoined by a court of competent jurisdiction from violations of such laws or rules, or has been convicted by a court of competent jurisdiction of violations of such laws or of any felony or misdemeanor described in subsection (e)(2);
(E) the need to deter such person and other persons from committing such acts or omissions; and
(F) such other matters as justice may require.
(4) Evidence concerning ability to pay
(j) Authority to enter order requiring accounting and disgorgement
(k) Cease-and-desist proceedings
(1) Authority of Commission
(2) Hearing
(3) Temporary order
(A) In general
(B) Applicability
(4) Review of temporary orders
(A) Commission review
(B) Judicial reviewWithin—
(i) 10 days after the date the respondent was served with a temporary cease-and-desist order entered with a prior Commission hearing, or
(ii) 10 days after the Commission renders a decision on an application and hearing under subparagraph (A), with respect to any temporary cease-and-desist order entered without a prior Commission hearing,
the respondent may apply to the United States district court for the district in which the respondent resides or has its principal office or place of business, or for the District of Columbia, for an order setting aside, limiting, or suspending the effectiveness or enforcement of the order, and the court shall have jurisdiction to enter such an order. A respondent served with a temporary cease-and-desist order entered without a prior Commission hearing may not apply to the court except after hearing and decision by the Commission on the respondent’s application under subparagraph (A) of this paragraph.
(C) No automatic stay of temporary order
(D) Exclusive review
(5) Authority to enter order requiring accounting and disgorgement
(l) Exemption of venture capital fund advisers
(1) In general
(2) Advisers of SBICS
(3) Advisers of RBICS
(m) Exemption of and reporting by certain private fund advisers
(1) In general
(2) Reporting
(3) Advisers of SBICS
(4) Advisers of RBICS
(n) Registration and examination of mid-sized private fund advisers
(Aug. 22, 1940, ch. 686, title II, § 203, 54 Stat. 850; Pub. L. 86–750, §§ 2–5, Sept. 13, 1960, 74 Stat. 885, 886; Pub. L. 91–547, § 24, Dec. 14, 1970, 84 Stat. 1430; Pub. L. 94–29, § 29(1)–(4), June 4, 1975, 89 Stat. 166–169; Pub. L. 96–477, title II, § 202, Oct. 21, 1980, 94 Stat. 2290; Pub. L. 99–571, title I, § 102(m), Oct. 28, 1986, 100 Stat. 3220; Pub. L. 100–181, title VII, § 702, Dec. 4, 1987, 101 Stat. 1263; Pub. L. 101–429, title IV, § 401, Oct. 15, 1990, 104 Stat. 946; Pub. L. 101–550, title II, § 205(b), (c), Nov. 15, 1990, 104 Stat. 2719, 2720; Pub. L. 104–62, § 5, Dec. 8, 1995, 109 Stat. 685; Pub. L. 104–290, title III, §§ 303(b), (d), 305, title V, § 508(d), Oct. 11, 1996, 110 Stat. 3438, 3439, 3448; Pub. L. 105–353, title III, § 301(d)(1), Nov. 3, 1998, 112 Stat. 3237; Pub. L. 106–554, § 1(a)(5) [title II, § 209(b)], Dec. 21, 2000, 114 Stat. 2763, 2763A–436; Pub. L. 107–204, title VI, § 604(b), (c)(2), July 30, 2002, 116 Stat. 796; Pub. L. 109–291, § 4(b)(3)(C), Sept. 29, 2006, 120 Stat. 1337; Pub. L. 111–203, title IV, §§ 403, 407, 408, title IX, §§ 925(b), 929P(a)(4), 985(e)(1), July 21, 2010, 124 Stat. 1571, 1574, 1575, 1851, 1864, 1935; Pub. L. 114–94, div. G, title LXXIV, §§ 74001, 74002, Dec. 4, 2015, 129 Stat. 1786; Pub. L. 115–417, § 2, Jan. 3, 2019, 132 Stat. 5438.)

CITE AS: 15 USC 80b-3

§ 80b–3a. State and Federal responsibilities
(a) Advisers subject to State authorities
(1) In generalNo investment adviser that is regulated or required to be regulated as an investment adviser in the State in which it maintains its principal office and place of business shall register under section 80b–3 of this title, unless the investment adviser—
(A) has assets under management of not less than $25,000,000, or such higher amount as the Commission may, by rule, deem appropriate in accordance with the purposes of this subchapter; or
(B) is an adviser to an investment company registered under subchapter I of this chapter.
(2) Treatment of mid-sized investment advisers
(A) In general
(B) Covered personsAn investment adviser described in this subparagraph is an investment adviser that—
(i) is required to be registered as an investment adviser with the securities commissioner (or any agency or office performing like functions) of the State in which it maintains its principal office and place of business and, if registered, would be subject to examination as an investment adviser by any such commissioner, agency, or office; and
(ii) has assets under management between—(I) the amount specified under subparagraph (A) of paragraph (1), as such amount may have been adjusted by the Commission pursuant to that subparagraph; and(II) $100,000,000, or such higher amount as the Commission may, by rule, deem appropriate in accordance with the purposes of this subchapter.
(3) “Assets under management” defined
(b) Advisers subject to Commission authority
(1) In generalNo law of any State or political subdivision thereof requiring the registration, licensing, or qualification as an investment adviser or supervised person of an investment adviser shall apply to any person—
(A) that is registered under section 80b–3 of this title as an investment adviser, or that is a supervised person of such person, except that a State may license, register, or otherwise qualify any investment adviser representative who has a place of business located within that State;
(B) that is not registered under section 80b–3 of this title because that person is excepted from the definition of an investment adviser under section 80b–2(a)(11) of this title; or 1
1 So in original. The word “or” probably should not appear.
(C) that is not registered under section 80b–3 of this title because that person is exempt from registration as provided in subsection (b)(7) of such section, or is a supervised person of such person; or
(D) that is not registered under section 80b–3 of this title because that person is exempt from registration as provided in subsection (b)(8) of such section, or is a supervised person of such person.
(2) Limitation
(c) Exemptions
(d) State assistance
(Aug. 22, 1940, ch. 686, title II, § 203A, as added Pub. L. 104–290, title III, § 303(a), Oct. 11, 1996, 110 Stat. 3437; amended Pub. L. 109–290, § 7(b)(1), Sept. 29, 2006, 120 Stat. 1321; Pub. L. 111–203, title IV, § 410, July 21, 2010, 124 Stat. 1576; Pub. L. 114–94, div. G, title LXXIV, § 74003, Dec. 4, 2015, 129 Stat. 1786; Pub. L. 115–417, § 3, Jan. 3, 2019, 132 Stat. 5439.)

CITE AS: 15 USC 80b-3a

§ 80b–4. Reports by investment advisers
(a) In general
(b) Records and reports of private funds
(1) In generalThe Commission may require any investment adviser registered under this subchapter—
(A) to maintain such records of, and file with the Commission such reports regarding, private funds advised by the investment adviser, as necessary and appropriate in the public interest and for the protection of investors, or for the assessment of systemic risk by the Financial Stability Oversight Council (in this subsection referred to as the “Council”); and
(B) to provide or make available to the Council those reports or records or the information contained therein.
(2) Treatment of records
(3) Required informationThe records and reports required to be maintained by an investment adviser and subject to inspection by the Commission under this subsection shall include, for each private fund advised by the investment adviser, a description of—
(A) the amount of assets under management and use of leverage, including off-balance-sheet leverage;
(B) counterparty credit risk exposure;
(C) trading and investment positions;
(D) valuation policies and practices of the fund;
(E) types of assets held;
(F) side arrangements or side letters, whereby certain investors in a fund obtain more favorable rights or entitlements than other investors;
(G) trading practices; and
(H) such other information as the Commission, in consultation with the Council, determines is necessary and appropriate in the public interest and for the protection of investors or for the assessment of systemic risk, which may include the establishment of different reporting requirements for different classes of fund advisers, based on the type or size of private fund being advised.
(4) Maintenance of records
(5) Filing of records
(6) Examination of records
(A) Periodic and special examinationsThe Commission—
(i) shall conduct periodic inspections of the records of private funds maintained by an investment adviser registered under this subchapter in accordance with a schedule established by the Commission; and
(ii) may conduct at any time and from time to time such additional, special, and other examinations as the Commission may prescribe as necessary and appropriate in the public interest and for the protection of investors, or for the assessment of systemic risk.
(B) Availability of records
(7) Information sharing
(A) In general
(B) Confidentiality
(8) Commission confidentiality of reportsNotwithstanding any other provision of law, the Commission may not be compelled to disclose any report or information contained therein required to be filed with the Commission under this subsection, except that nothing in this subsection authorizes the Commission—
(A) to withhold information from Congress, upon an agreement of confidentiality; or
(B) prevent 2
2 So in original. Probably should be preceded by “to”.
the Commission from complying with—
(i) a request for information from any other Federal department or agency or any self-regulatory organization requesting the report or information for purposes within the scope of its jurisdiction; or
(ii) an order of a court of the United States in an action brought by the United States or the Commission.
(9) Other recipients confidentiality
(10) Public information exception
(A) In general
(B) Proprietary informationFor purposes of this paragraph, proprietary information includes sensitive, non-public information regarding—
(i) the investment or trading strategies of the investment adviser;
(ii) analytical or research methodologies;
(iii) trading data;
(iv) computer hardware or software containing intellectual property; and
(v) any additional information that the Commission determines to be proprietary.
(11) Annual report to Congress
(c) Filing depositoriesThe Commission may, by rule, require an investment adviser—
(1) to file with the Commission any fee, application, report, or notice required to be filed by this subchapter or the rules issued under this subchapter through any entity designated by the Commission for that purpose; and
(2) to pay the reasonable costs associated with such filing and the establishment and maintenance of the systems required by subsection (c).
(d) Access to disciplinary and other information
(1) Maintenance of system to respond to inquiries
(A) In general
(B) Applicability
(2) Recovery of costs
(3) Limitation on liability
(e) Records of persons with custody or use
(1) In general
(2) Certain persons subject to other regulation
(f) Data standards for reports filed under this section
(1) Requirement
(2) Consistency
(Aug. 22, 1940, ch. 686, title II, § 204, 54 Stat. 852; Pub. L. 86–750, § 6, Sept. 13, 1960, 74 Stat. 886; Pub. L. 94–29, § 29(5), June 4, 1975, 89 Stat. 169; Pub. L. 109–290, § 7(a), Sept. 29, 2006, 120 Stat. 1321; Pub. L. 111–203, title IV, § 404, title IX, § 929Q(b), July 21, 2010, 124 Stat. 1571, 1866; Pub. L. 117–263, div. E, title LVIII, § 5821(a), Dec. 23, 2022, 136 Stat. 3424.)

CITE AS: 15 USC 80b-4

§ 80b–4a. Prevention of misuse of nonpublic information

Every investment adviser subject to section 80b–4 of this title shall establish, maintain, and enforce written policies and procedures reasonably designed, taking into consideration the nature of such investment adviser’s business, to prevent the misuse in violation of this chapter or the Securities Exchange Act of 1934 [15 U.S.C. 78a et seq.], or the rules or regulations thereunder, of material, nonpublic information by such investment adviser or any person associated with such investment adviser. The Commission, as it deems necessary or appropriate in the public interest or for the protection of investors, shall adopt rules or regulations to require specific policies or procedures reasonably designed to prevent misuse in violation of this chapter or the Securities Exchange Act of 1934 (or the rules or regulations thereunder) of material, nonpublic information.

(Aug. 22, 1940, ch. 686, title II, § 204A, as added Pub. L. 100–704, § 3(b)(2), Nov. 19, 1988, 102 Stat. 4680.)

CITE AS: 15 USC 80b-4a

§ 80b–5. Investment advisory contracts
(a) Compensation, assignment, and partnership-membership provisionsNo investment adviser registered or required to be registered with the Commission shall enter into, extend, or renew any investment advisory contract, or in any way perform any investment advisory contract entered into, extended, or renewed on or after November 1, 1940, if such contract—
(1) provides for compensation to the investment adviser on the basis of a share of capital gains upon or capital appreciation of the funds or any portion of the funds of the client;
(2) fails to provide, in substance, that no assignment of such contract shall be made by the investment adviser without the consent of the other party to the contract; or
(3) fails to provide, in substance, that the investment adviser, if a partnership, will notify the other party to the contract of any change in the membership of such partnership within a reasonable time after such change.
(b) Compensation prohibition inapplicable to certain compensation computationsParagraph (1) of subsection (a) shall not—
(1) be construed to prohibit an investment advisory contract which provides for compensation based upon the total value of a fund averaged over a definite period, or as of definite dates, or taken as of a definite date;
(2) apply to an investment advisory contract with—
(A) an investment company registered under subchapter I of this chapter, or
(B) any other person (except a trust, governmental plan, collective trust fund, or separate account referred to in section 80a–3(c)(11) of this title), provided that the contract relates to the investment of assets in excess of $1 million,
if the contract provides for compensation based on the asset value of the company or fund under management averaged over a specified period and increasing and decreasing proportionately with the investment performance of the company or fund over a specified period in relation to the investment record of an appropriate index of securities prices or such other measure of investment performance as the Commission by rule, regulation, or order may specify;
(3) apply with respect to any investment advisory contract between an investment adviser and a business development company, as defined in this subchapter, if (A) the compensation provided for in such contract does not exceed 20 per centum of the realized capital gains upon the funds of the business development company over a specified period or as of definite dates, computed net of all realized capital losses and unrealized capital depreciation, and the condition of
(4) apply to an investment advisory contract with a company excepted from the definition of an investment company under section 80a–3(c)(7) of this title; or
(5) apply to an investment advisory contract with a person who is not a resident of the United States.
(c) Measurement of changes in compensation
(d) “Investment advisory contract” defined
(e) Exempt persons and transactions
(f) Authority to restrict mandatory pre-dispute arbitration
(Aug. 22, 1940, ch. 686, title II, § 205, 54 Stat. 852; Pub. L. 86–750, § 7, Sept. 13, 1960, 74 Stat. 887; Pub. L. 91–547, § 25, Dec. 14, 1970, 84 Stat. 1432; Pub. L. 96–477, title II, § 203, Oct. 21, 1980, 94 Stat. 2290; Pub. L. 100–181, title VII, § 703, Dec. 4, 1987, 101 Stat. 1263; Pub. L. 104–290, title II, § 210, Oct. 11, 1996, 110 Stat. 3436; Pub. L. 111–203, title IV, § 418, title IX, §§ 921(b), 928, July 21, 2010, 124 Stat. 1579, 1841, 1852; Pub. L. 115–141, div. S, title VIII, § 802(b)(1), Mar. 23, 2018, 132 Stat. 1140.)

CITE AS: 15 USC 80b-5

§ 80b–6. Prohibited transactions by investment advisers
It shall be unlawful for any investment adviser by use of the mails or any means or instrumentality of interstate commerce, directly or indirectly—
(1) to employ any device, scheme, or artifice to defraud any client or prospective client;
(2) to engage in any transaction, practice, or course of business which operates as a fraud or deceit upon any client or prospective client;
(3) acting as principal for his own account, knowingly to sell any security to or purchase any security from a client, or acting as broker for a person other than such client, knowingly to effect any sale or purchase of any security for the account of such client, without disclosing to such client in writing before the completion of such transaction the capacity in which he is acting and obtaining the consent of the client to such transaction. The prohibitions of this paragraph shall not apply to any transaction with a customer of a broker or dealer if such broker or dealer is not acting as an investment adviser in relation to such transaction; or
(4) to engage in any act, practice, or course of business which is fraudulent, deceptive, or manipulative. The Commission shall, for the purposes of this paragraph (4) by rules and regulations define, and prescribe means reasonably designed to prevent, such acts, practices, and courses of business as are fraudulent, deceptive, or manipulative.
(Aug. 22, 1940, ch. 686, title II, § 206, 54 Stat. 852; Pub. L. 86–750, §§ 8, 9, Sept. 13, 1960, 74 Stat. 887; Pub. L. 111–203, title IX, § 985(e)(2), July 21, 2010, 124 Stat. 1935.)

CITE AS: 15 USC 80b-6

§ 80b–6a. Exemptions

The Commission, by rules and regulations, upon its own motion, or by order upon application, may conditionally or unconditionally exempt any person or transaction, or any class or classes of persons, or transactions, from any provision or provisions of this subchapter or of any rule or regulation thereunder, if and to the extent that such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of this subchapter.

(Aug. 22, 1940, ch. 686, title II, § 206A, as added Pub. L. 91–547, § 26, Dec. 14, 1970, 84 Stat. 1433.)

CITE AS: 15 USC 80b-6a

§ 80b–7. Material misstatements

It shall be unlawful for any person willfully to make any untrue statement of a material fact in any registration application or report filed with the Commission under section 80b–3 or 80b–4 of this title, or willfully to omit to state in any such application or report any material fact which is required to be stated therein.

(Aug. 22, 1940, ch. 686, title II, § 207, 54 Stat. 853.)

CITE AS: 15 USC 80b-7

§ 80b–8. General prohibitions
(a) Representations of sponsorship by United States or agency thereof
(b) Statement of registration under Securities Exchange Act of 1934 provisions
(c) Use of name “investment counsel” as descriptive of business
(d) Use of indirect means to do prohibited act
(Aug. 22, 1940, ch. 686, title II, § 208, 54 Stat. 853; Pub. L. 86–750, §§ 10, 11, Sept. 13, 1960, 74 Stat. 887.)

CITE AS: 15 USC 80b-8

§ 80b–9. Enforcement of subchapter
(a) Investigation
(b) Administration of oaths and affirmations, subpena of witnesses, etc.
(c) Jurisdiction of courts of United States
(d) Action for injunction
(e) Money penalties in civil actions
(1) Authority of Commission
(2) Amount of penalty
(A) First tier
(B) Second tier
(C) Third tier
Notwithstanding subparagraphs (A) and (B), the amount of penalty for each such violation shall not exceed the greater of (i) $100,000 for a natural person or $500,000 for any other person, or (ii) the gross amount of pecuniary gain to such defendant as a result of the violation, if—
(I) the violation described in paragraph (1) involved fraud, deceit, manipulation, or deliberate or reckless disregard of a regulatory requirement; and(II) such violation directly or indirectly resulted in substantial losses or created a significant risk of substantial losses to other persons.
(3) Procedures for collection
(A) Payment of penalty to Treasury
(B) Collection of penalties
(C) Remedy not exclusive
(D) Jurisdiction and venue
(4) Special provisions relating to violation of cease-and-desist order
(f) Aiding and abetting
(Aug. 22, 1940, ch. 686, title II, § 209, 54 Stat. 853; Pub. L. 86–750, § 12, Sept. 13, 1960, 74 Stat. 887; Pub. L. 91–452, title II, § 216, Oct. 15, 1970, 84 Stat. 929; Pub. L. 100–181, title VII, § 704, Dec. 4, 1987, 101 Stat. 1264; Pub. L. 101–429, title IV, § 402, Oct. 15, 1990, 104 Stat. 949; Pub. L. 107–204, title III, § 308(d)(5), July 30, 2002, 116 Stat. 785; Pub. L. 111–203, title IX, §§ 923(a)(3), 929N, July 21, 2010, 124 Stat. 1849, 1862.)

CITE AS: 15 USC 80b-9

§ 80b–10. Disclosure of information by Commission
(a) Information available to public
(b) Disclosure of fact of examination or investigation; exceptions
Subject to the provisions of subsections (c) and (d) of section 80b–9 of this title and section 78x(c) of this title, the Commission, or any member, officer, or employee thereof, shall not make public the fact that any examination or investigation under this subchapter is being conducted, or the results of or any facts ascertained during any such examination or investigation; and no member, officer, or employee of the Commission shall disclose to any person other than a member, officer, or employee of the Commission any information obtained as a result of any such examination or investigation except with the approval of the Commission. The provisions of this subsection shall not apply—
(1) in the case of any hearing which is public under the provisions of section 80b–12 of this title; or
(2) in the case of a resolution or request from either House of Congress.
(c) Disclosure by investment adviser of identity of clients
(Aug. 22, 1940, ch. 686, title II, § 210, 54 Stat. 854; Pub. L. 86–750, § 13, Sept. 13, 1960, 74 Stat. 887; Pub. L. 101–550, title II, § 202(b)(2), Nov. 15, 1990, 104 Stat. 2715; Pub. L. 111–203, title IV, § 405, title IX, § 929I(c), July 21, 2010, 124 Stat. 1574, 1858; Pub. L. 111–257, § 1(c), Oct. 5, 2010, 124 Stat. 2646.)

CITE AS: 15 USC 80b-10

§ 80b–10a. Consultation
(a) Examination results and other information
(1) The appropriate Federal banking agency shall provide the Commission upon request the results of any examination, reports, records, or other information to which such agency may have access—
(A) with respect to the investment advisory activities of any—
(i) bank holding company or savings and loan holding company;
(ii) bank; or
(iii) separately identifiable department or division of a bank,
that is registered under section 80b–3 of this title; and
(B) in the case of a bank holding company or savings and loan holding company or bank that has a subsidiary or a separately identifiable department or division registered under that section, with respect to the investment advisory activities of such bank or bank holding company or savings and loan holding company.
(2) The Commission shall provide to the appropriate Federal banking agency upon request the results of any examination, reports, records, or other information with respect to the investment advisory activities of any bank holding company or savings and loan holding company, bank, or separately identifiable department or division of a bank, which is registered under section 80b–3 of this title.
(3) Notwithstanding any other provision of law, the Commission and the appropriate Federal banking agencies shall not be compelled to disclose any information provided under paragraph (1) or (2). Nothing in this paragraph shall authorize the Commission or such agencies to withhold information from Congress, or prevent the Commission or such agencies from complying with a request for information from any other Federal department or agency or any self-regulatory organization requesting the information for purposes within the scope of its jurisdiction, or complying with an order of a court of the United States in an action brought by the United States, the Commission, or such agencies. For purposes of section 552 of title 5, this paragraph shall be considered a statute described in subsection (b)(3)(B) of such section 552.
(b) Effect on other authority
(c) Definition
(Aug. 22, 1940, ch. 686, title II, § 210A, as added Pub. L. 106–102, title II, § 220, Nov. 12, 1999, 113 Stat. 1400; Pub. L. 109–351, title IV, § 401(b)(2), Oct. 13, 2006, 120 Stat. 1973.)

CITE AS: 15 USC 80b-10a

§ 80b–11. Rules, regulations, and orders of Commission
(a) Power of Commission
(b) Effective date of regulations
(c) Orders of Commission after notice and hearing; type of notice
(d) Good faith compliance with rules and regulations
(e) Disclosure rules on private funds
(g)2
2 So in original. No subsec. (f) has been enacted.
Standard of conduct
(1) In general
(2) Retail customer defined
For purposes of this subsection, the term “retail customer” means a natural person, or the legal representative of such natural person, who—
(A) receives personalized investment advice about securities from a broker, dealer, or investment adviser; and
(B) uses such advice primarily for personal, family, or household purposes.
(h) Other matters
The Commission shall—
(1) facilitate the provision of simple and clear disclosures to investors regarding the terms of their relationships with brokers, dealers, and investment advisers, including any material conflicts of interest; and
(2) examine and, where appropriate, promulgate rules prohibiting or restricting certain sales practices, conflicts of interest, and compensation schemes for brokers, dealers, and investment advisers that the Commission deems contrary to the public interest and the protection of investors.
(i) Harmonization of enforcement
The enforcement authority of the Commission with respect to violations of the standard of conduct applicable to an investment adviser shall include—
(1) the enforcement authority of the Commission with respect to such violations provided under this subchapter; and
(2) the enforcement authority of the Commission with respect to violations of the standard of conduct applicable to a broker or dealer providing personalized investment advice about securities to a retail customer under the Securities Exchange Act of 1934 [15 U.S.C. 78a et seq.], including the authority to impose sanctions for such violations, and
the Commission shall seek to prosecute and sanction violators of the standard of conduct applicable to an investment adviser under this subchapter to same extent as the Commission prosecutes and sanctions violators of the standard of conduct applicable to a broker or dealer providing personalized investment advice about securities to a retail customer under the Securities Exchange Act of 1934 [15 U.S.C. 78a et seq.].
(Aug. 22, 1940, ch. 686, title II, § 211, 54 Stat. 855; Pub. L. 86–507, § 1(16), June 11, 1960, 74 Stat. 201; Pub. L. 86–750, § 14, Sept. 13, 1960, 74 Stat. 888; Pub. L. 100–181, title VII, § 705, Dec. 4, 1987, 101 Stat. 1264; Pub. L. 111–203, title IV, § 406, title IX, § 913(g)(2), (h)(2), July 21, 2010, 124 Stat. 1574, 1828, 1829.)

CITE AS: 15 USC 80b-11

§ 80b–12. Hearings

Hearings may be public and may be held before the Commission, any member or members thereof, or any officer or officers of the Commission designated by it, and appropriate records thereof shall be kept.

(Aug. 22, 1940, ch. 686, title II, § 212, 54 Stat. 855.)

CITE AS: 15 USC 80b-12

§ 80b–13. Court review of orders
(a) Petition; jurisdiction; findings of Commission; additional evidence; finality
(b) Stay of Commission’s order
(Aug. 22, 1940, ch. 686, title II, § 213, 54 Stat. 855; June 25, 1948, ch. 646, § 32(a), 62 Stat. 991; May 24, 1949, ch. 139, § 127, 63 Stat. 107; Pub. L. 85–791, § 26, Aug. 28, 1958, 72 Stat. 949; Pub. L. 100–181, title VII, § 706, Dec. 4, 1987, 101 Stat. 1264; Pub. L. 111–203, title IX, § 985(e)(3), July 21, 2010, 124 Stat. 1935.)

CITE AS: 15 USC 80b-13

§ 80b–14. Jurisdiction of offenses and suits
(a) In general
(b) Extraterritorial jurisdiction
The district courts of the United States and the United States courts of any Territory shall have jurisdiction of an action or proceeding brought or instituted by the Commission or the United States alleging a violation of section 80b–6 of this title involving—
(1) conduct within the United States that constitutes significant steps in furtherance of the violation, even if the violation is committed by a foreign adviser and involves only foreign investors; or
(2) conduct occurring outside the United States that has a foreseeable substantial effect within the United States.
(Aug. 22, 1940, ch. 686, title II, § 214, 54 Stat. 856; Pub. L. 100–181, title VII, § 707, Dec. 4, 1987, 101 Stat. 1264; Pub. L. 101–429, title IV, § 403, Oct. 15, 1990, 104 Stat. 951; Pub. L. 111–203, title IX, §§ 929E(d), 929P(b)(3), July 21, 2010, 124 Stat. 1853, 1865.)

CITE AS: 15 USC 80b-14

§ 80b–15. Validity of contracts
(a) Waiver of compliance as void
(b) Rights affected by invalidity
(Aug. 22, 1940, ch. 686, title II, § 215, 54 Stat. 856.)

CITE AS: 15 USC 80b-15

§ 80b–16. Omitted

CITE AS: 15 USC 80b-16

§ 80b–17. Penalties

Any person who willfully violates any provision of this subchapter, or any rule, regulation, or order promulgated by the Commission under authority thereof, shall, upon conviction, be fined not more than $10,000, imprisoned for not more than five years, or both.

(Aug. 22, 1940, ch. 686, title II, § 217, 54 Stat. 857; Pub. L. 86–750, § 15, Sept. 13, 1960, 74 Stat. 888; Pub. L. 94–29, § 27(f), June 4, 1975, 89 Stat. 163.)

CITE AS: 15 USC 80b-17

§ 80b–18. Hiring and leasing authority of Commission
The provisions of section 78d(b) of this title shall be applicable with respect to the power of the Commission—
(1) to appoint and fix the compensation of such other employees as may be necessary for carrying out its functions under this subchapter, and
(2) to lease and allocate such real property as may be necessary for carrying out its functions under this subchapter.
(Aug. 22, 1940, ch. 686, title II, § 218, 54 Stat. 857; Oct. 28, 1949, ch. 782, title XI, § 1106(a), 63 Stat. 972; Pub. L. 101–550, title I, § 104(d), Nov. 15, 1990, 104 Stat. 2714.)

CITE AS: 15 USC 80b-18

§ 80b–18a. State regulation of investment advisers
(a) Jurisdiction of State regulators
(b) Dual compliance purposes
No State may enforce any law or regulation that would require an investment adviser to maintain any books or records in addition to those required under the laws of the State in which it maintains its principal office and place of business, if the investment adviser—
(1) is registered or licensed as such in the State in which it maintains its principal office and place of business; and
(2) is in compliance with the applicable books and records requirements of the State in which it maintains its principal office and place of business.
(c) Limitation on capital and bond requirements
No State may enforce any law or regulation that would require an investment adviser to maintain a higher minimum net capital or to post any bond in addition to any that is required under the laws of the State in which it maintains its principal office and place of business, if the investment adviser—
(1) is registered or licensed as such in the State in which it maintains its principal office and place of business; and
(2) is in compliance with the applicable net capital or bonding requirements of the State in which it maintains its principal office and place of business.
(d) National de minimis standard
No law of any State or political subdivision thereof requiring the registration, licensing, or qualification as an investment adviser shall require an investment adviser to register with the securities commissioner of the State (or any agency or officer performing like functions) or to comply with such law (other than any provision thereof prohibiting fraudulent conduct) if the investment adviser—
(1) does not have a place of business located within the State; and
(2) during the preceding 12-month period, has had fewer than 6 clients who are residents of that State.
(Aug. 22, 1940, ch. 686, title II, § 222, as added Pub. L. 86–750, § 16, Sept. 13, 1960, 74 Stat. 888; amended Pub. L. 104–290, title III, § 304, Oct. 11, 1996, 110 Stat. 3438; Pub. L. 105–353, title III, § 301(d)(2), Nov. 3, 1998, 112 Stat. 3237; Pub. L. 111–203, title IX, § 985(e)(4), July 21, 2010, 124 Stat. 1935.)

CITE AS: 15 USC 80b-18a

§ 80b–18b. Custody of client accounts

An investment adviser registered under this subchapter shall take such steps to safeguard client assets over which such adviser has custody, including, without limitation, verification of such assets by an independent public accountant, as the Commission may, by rule, prescribe.

(Aug. 22, 1940, ch. 686, title II, § 223, as added Pub. L. 111–203, title IV, § 411, July 21, 2010, 124 Stat. 1577.)

CITE AS: 15 USC 80b-18b

§ 80b–18c. Rule of construction relating to the Commodities Exchange Act

Nothing in this subchapter shall relieve any person of any obligation or duty, or affect the availability of any right or remedy available to the Commodity Futures Trading Commission or any private party, arising under the Commodity Exchange Act (7 U.S.C. 1 et seq.) governing commodity pools, commodity pool operators, or commodity trading advisors.

(Aug. 22, 1940, ch. 686, title II, § 224, as added Pub. L. 111–203, title IV, § 414, July 21, 2010, 124 Stat. 1578.)

CITE AS: 15 USC 80b-18c

§ 80b–19. Separability

If any provision of this subchapter or the application of such provision to any person or circumstances shall be held invalid, the remainder of the subchapter and the application of such provision to persons or circumstances other than those as to which it is held invalid shall not be affected thereby.

(Aug. 22, 1940, ch. 686, title II, § 219, 54 Stat. 857.)

CITE AS: 15 USC 80b-19

§ 80b–20. Short title

This subchapter may be cited as the “Investment Advisers Act of 1940”.

(Aug. 22, 1940, ch. 686, title II, § 220, 54 Stat. 857.)

CITE AS: 15 USC 80b-20

§ 80b–21. Effective date

This subchapter shall become effective on November 1, 1940.

(Aug. 22, 1940, ch. 686, title II, § 221, 54 Stat. 857.)

CITE AS: 15 USC 80b-21