NC Register Volume 16 Issue 15 - Office of Administrative Hearings

partnership or limited liability limited partnership is a "limitedpartnership."(d) Wrap Fee Program Brochures.(1) If the investment adviser is a sponsor of awrap fee program, then the brochure, requiredto be delivered by Subparagraph (b)(1) of thisRule to a client or prospective client of thewrap fee program, must be a wrap feebrochure containing all information requiredby Form ADV. Any additional information ina wrap fee brochure must be limited toinformation applicable to wrap fee programsthat the investment adviser sponsors.(2) The investment adviser does not have to offeror deliver a wrap fee brochure if anothersponsor of the wrap fee program offers ordelivers to the client or prospective client ofthe wrap fee program a wrap fee programbrochure containing all the information theinvestment adviser's wrap fee programbrochure must contain.(3) A wrap fee brochure does not take the place ofany brochure supplement(s) that theinvestment adviser is required to deliver underPart (b)(1)(B) of this Rule.(e) Delivery of Updates and Amendments. The investmentadviser must amend its brochure and any brochuresupplement(s) and deliver the amendments to clients promptlywhen information contained in the brochure or brochuresupplement(s) becomes materially inaccurate. The instructionsto Part 2 of Form ADV contain updating and deliveryinstructions that the investment adviser must follow. Anamendment will be considered to be delivered promptly if theamendment is delivered within 30 days of the event that requiresthe filing of the amendment.(f) Multiple Brochures. If an investment adviser renderssubstantially different types of investment advisory services todifferent clients, the investment adviser may provide them withdifferent brochures, provided that each client receives allapplicable information about services and fees. The brochuredelivered to a client may omit any information required by Part2A of Form ADV if such information is applicable only to a typeof investment advisory service or fee that is not rendered orcharged, or proposed to be rendered or charged, to that client orprospective client.(g) Other Disclosure Obligations. Nothing in this Rule shallrelieve any investment adviser from any obligation pursuant toany provision of the Act or the rules and regulations thereunderor other federal or state law to disclose any information to itsclients or prospective clients not specifically required by thisRule.(h) Conversion Rule. All investment advisers registered orrequired to be registered under the Act must deliver to each oftheir clients their current brochure and all required brochuresupplements within 30 days from the date of making its initialfiling with IARD.(i) Definitions. For the purposes of this Rule:(1) "Current brochure" and "current brochuresupplement" mean the most recent revision ofthe brochure or brochure supplement,TEMPORARY RULES16:15 NORTH CAROLINA REGISTER February 1, 20021733including all subsequent amendments (i.e.,stickers);(2) "Entering into," in reference to an investmentadvisory contract, does not include anextension or renewal without material changeof any such contract which is in effectimmediately prior to such extension orrenewal;(3) "Sponsor" of a wrap fee program means aninvestment adviser that is compensated under awrap fee program for sponsoring, organizing,or administering the program, or for selecting,or providing advice to clients regarding theselection of other investment advisers in theprogram; and(4) "Wrap fee program" means an advisoryprogram under which a specified fee or fees,not based directly upon transactions in aclient's account, is charged for investmentadvisory services (which may include portfoliomanagement or advice concerning theselection of other investment advisers) and theexecution of client transactions.History Note: Authority G.S. 78C-18(b); 78C-30(a);78C-30(b);Temporary Rule Eff. January 2, 1989 for a Period of 180 Daysto Expire on June 30, 1989;Eff. February 1, 1989;Temporary Amendment Eff. January 14, 2002.18 NCAC 06 .1710 TERMINATION/WITHDRAWAL/INVESTMENT ADVISERREGISTRATIONS(a) Investment advisers. The application for withdrawal ofregistration as an investment adviser pursuant to Section78C-19(e) of the Act shall be completed by following theinstructions on Form ADV-W (Notice of Withdrawal fromRegistration as Investment Adviser) (17 C.F.R. 279.2) and filedupon Form ADV-W with IARD.(b) Investment adviser representatives. The application forwithdrawal of registration as an investment adviserrepresentative pursuant to Section 78C-19(e) of the Act shall becompleted by following the instructions on Form U-5 (UniformTermination Notice for Securities Industry Registration) andfiled upon Form U-5 with IARD.History Note: Authority G.S. 78C-16(b); 78C-19(e); 78C-20;78C-30(a); 78C-30(b);Temporary Rule Eff. January 2, 1989 for a Period of 180 Daysto Expire on June 30, 1989;Eff. February 1, 1989;Temporary Amendment Eff. January 14, 2002.18 NCAC 06 .1711 TRANSFER/INVESTMENTADVISER REPRESENTATIVE'S REGISTRATION(a) In order to effect a transfer of registration of an investmentadviser representative from one investment adviser (the"previous investment adviser") to another investment adviser(the "new investment adviser"), the following shall be filed withthe IARD: