NC Register Volume 16 Issue 15 - Office of Administrative Hearings

TEMPORARY RULES(III) requires that thesolicitor, at the timeof any solicitationactivities for whichcompensation ispaid or to be paidby the investmentadviser, provide theclient with a currentcopy of theinvestment adviser'swritten disclosurestatement requiredby Rule .1707 ofthis Section("InvestmentAdviser BrochureRule") and aseparate writtendisclosuredocument describedin Paragraph (b) ofthis Rule;(ii) The investment adviserreceives from the client,prior to, or at the time of,entering into any writteninvestment advisory contractwith such client, a signedand dated acknowledgmentof receipt of the investmentadviser's written disclosurestatement and the solicitor'swritten disclosure document.The investment adviser shallretain a copy of each suchacknowledgment andsolicitor disclosuredocument as part of therecords required to be keptunder Subparagraph (a)(15)of Rule .1706 of thisSection; and(iii) The investment advisermakes a bona fide effort toascertain whether thesolicitor has complied withthe agreement, and has areasonable basis forbelieving that the solicitorhas so complied.(b) The separate written disclosure document required to befurnished by the solicitor to the client pursuant to this Sectionshall contain the following information:(1) The name of the solicitor;(2) The name of the investment adviser;(3) The nature of the relationship, including anyaffiliation, between the solicitor and theinvestment adviser;16:15 NORTH CAROLINA REGISTER February 1, 20021737(4) A statement that the solicitor will becompensated for his solicitation services bythe investment adviser;(5) The terms of such compensation arrangement,including a description of the compensationpaid or to be paid to the solicitor; and(6) The amount, if any, for the cost of obtaininghis account the client will be charged inaddition to the advisory fee, and thedifferential, if any, among clients with respectto the amount or level of advisory fees chargedby the investment adviser, if such differentialis attributable to the existence of anyarrangement pursuant to which the investmentadviser has agreed to compensate the solicitorfor soliciting clients for, or referring clients to,the investment adviser.(c) The investment adviser shall retain a copy of each writtenagreement required by this Rule as part of the records required tobe kept under Subparagraph (a)(10) of Rule .1706 of thisSection.(d) Nothing in this Rule shall be deemed to relieve any personof any fiduciary or other obligation to which such person may besubject under any law.(e) For purposes of this Rule:(1) "Solicitor" means any person who, directly orindirectly, solicits any client for, or refers anyclient to, an investment adviser.(2) "Client" includes any prospective client.(3) "Impersonal advisory services" meansinvestment advisory services provided solelyby means of:(A) written materials or oral statementswhich do not purport to meet theobjectives or needs of the specificclient;(B) statistical information containing noexpressions of opinions as to theinvestment merits of particularsecurities; or(C) any combination of the foregoingservices.History Note: Authority G.S. 78C-16(b)(2);Temporary Adoption Eff. January 14, 2002.TITLE 19A – DEPARTMENT OF TRANSPORTATIONEditor's Note: This publication will serve as Notice ofTemporary Rules and as Notice of Text for permanentrulemaking.Rule-making Agency: NC Department of Transportation –Division of HighwaysRule Citation: 19A NCAC 02D .0601, .0607Effective Date for Temporary Rule: January 11, 2002Findings Reviewed and Approved by: Beecher R. Gray