District of Columbia Administrative Code

151 INTERNET COMMUNICATIONS Investment advisers and investment adviser representatives who use the Internet to distribute information on available products and services through communications made on the Internet directed generally to anyone having access to the Internet, and tra…

152 INVESTMENT ADVISER LICENSING AND RENEWAL 152.1 It shall be unlawful for any person to transact business in the District as an investment adviser or as an investment adviser representative unless the person is registered under the Act. 152.2 An application for an investment ad…

153 DUTY TO AMEND INFORMATION PREVIOUSLY FILED 153.1 If the information contained in Form ADV for a license as an investment adviser or investment adviser representative, or any amendment thereto, is or becomes inaccurate or incomplete in any material respect for any reason, the …

154 SOLICITORS 154.1 It shall be unlawful for any investment adviser or investment adviser representative licensed or required to be licensed under the Act to compensate, directly or indirectly, any person who acts as a solicitor, unless such person is licensed as an investment a…

155 WITHDRAWAL FROM INVESTMENT ADVISER LICENSING 155.1 An investment adviser or federal covered adviser shall file Form ADV-W [17 CFR 279.2] to withdraw an investment adviser license with the Department (or to withdraw a pending application). 155.2 Once an investment adviser has …

156 TERMINATION AND WITHDRAWAL OF REGISTRATION AS AN INVESTMENT ADVISER REPRESENTATIVE AND ASSOCIATED PERSON OF AN INVESTMENT ADVISER 156.1 Every investment adviser shall promptly file with the Department a notice as to the termination of employment of any person licensed in the …

157 HARDSHIP EXEMPTIONS 157.1 An investment adviser required to submit electronic filings on the IARD system that experiences unanticipated technical difficulties that prevent it from submitting a filing to the IARD system, may request a temporary hardship exemption from the requ…

158 AMENDMENTS TO APPLICATION FOR LICENSING 158.1 An investment adviser shall promptly file an amendment to Part 1A or Part 1B of its Form ADV if either Part has a material omission or misrepresentation or otherwise becomes materially inaccurate. An investment adviser shall promp…

159 INVESTMENT ADVISER REPRESENTATIVE LICENSING 159.1 Prior to the implementation of the IARD system, the application for an initial license as an investment adviser representative pursuant to the Act shall be filed upon Form U-4 (the Uniform Application for Securities Industry R…

160 EXAMINATION/QUALIFICATION REQUIREMENTS 160.1 Any person applying to be licensed as an investment adviser or investment adviser representative in the District, including a designated principal pursuant to § 168.2, shall provide the Commissioner with proof of a passing score on…

161 INVESTMENT ADVISER REPRESENTATIVE CONTINUING EDUCATION REQUIREMENTS 161.1 An investment adviser representative licensed under § 159 of this Chapter shall complete the following continuing education requirements for each reporting period: Six (6) credits of IAR Regulatory and …

162 FILING PROCEDURES 162.1 All relevant time periods in the Act for processing of filings will begin running on the first business day after the date the document is received by the Department. 162.2 Any electronic method acceptable to the Department may be used to make any fili…

163 TRANSFER PROCEDURES 163.1 An investment adviser may apply to the Commissioner to transfer its investment adviser's license in order to transfer the affiliate of the investment adviser representative to another licensed investment adviser. The investment adviser representative…

164 INCOMPLETE OR DEFICIENT FILINGS 164.1 An application for license or renewal as an investment adviser or an investment adviser representative, or any other filing required by these regulations, shall be deemed incomplete for purposes of § 202 of the Act (D.C. Register at 47 DC…

165 RESERVED SOURCE: Final Rulemaking published at 40 DCR 6732 (September 24, 1993); as amended by Emergency Rulemaking published at 48 DCR 1987 (March 2, 2001) [EXPIRED]; as amended by Final Rulemaking published at 48 DCR 4106 (May 11, 2001).

166 [RESERVED] SOURCE: Final Rulemaking published at 40 DCR 6732 (September 24, 1993); as amended by Emergency Rulemaking published at 48 DCR 1987 (March 2, 2001) [EXPIRED]; as amended by Final Rulemaking published at 48 DCR 4106 (May 11, 2001); as amended by Final Rulemaking pub…

167 EXEMPTION/SUBSECTION FOR CERTAIN BROKER-DEALERS 167.1 An investment adviser licensed as a broker-dealer pursuant to Section 15 of the Securities Exchange Act of 1934 shall be exempt from Section 201 of the Act (D.C. Offical Code § 31-5602.01; D.C. Register at 47 DCR 7845) in …

168 SUPERVISION 168.1 Every investment adviser registered or required to be licensed under the Act shall exercise diligent supervision over the investment advisory activities of its investment adviser representatives and employees. 168.2 Each investment adviser representative and…

169 SENIOR-SPECIFIC CERTIFICATIONS, DESIGNATIONS, AND CREDENTIALS 169.1 The use, directly or indirectly, of a certification, professional designation, or credential by any person in connection with the offer, sale, or purchase of securities, or the providing of advice as to the v…

170 RESERVED SOURCE: Final Rulemaking published at 40 DCR 6732 (September 24, 1993); as amended by Emergency Rulemaking published at 48 DCR 1987 (March 2, 2001) [EXPIRED]; as amended by Final Rulemaking published at 48 DCR 4106 (May 11, 2001).

171 RESERVED SOURCE: Final Rulemaking published at 40 DCR 6732 (September 24, 1993); as amended by Emergency Rulemaking published at 48 DCR 1987 (March 2, 2001) [EXPIRED]; as amended by Final Rulemaking published at 48 DCR 4106 (May 11, 2001).

172 WRITTEN DISCLOSURE STATEMENTS (Brochure Rule) 172.1 Unless otherwise provided in this section, an investment adviser, registered or required to be registered pursuant to the Act, shall, in accordance with the provisions of this section, furnish each advisory client with a wri…

173 PERFORMANCE BASED COMPENSATION 173.1 An investment adviser may enter into, extend, or renew an investment advisory contract, which 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 po…

174 FINANCIAL AND DISCIPLINARY INFORMATION THAT INVESTMENT ADVISERS MUST DISCLOSE TO CLIENTS 174.1 An investment adviser shall promptly disclose in writing the financial and disciplinary history of an investment adviser representative employed or associated with the investment ad…

175 CUSTODY OR POSSESSION OF CLIENTS FUNDS OR SECURITIES 175.1 It shall constitute a dishonest practice within Section 207 (a)(9) of the Act (D.C. Offical Code § 31-5602.07; D.C. Register at 47 DCR 7851) for any investment adviser who has custody or possession of any funds or sec…

176 UNLAWFUL, UNETHICAL OR DISHONEST CONDUCT OR PRACTICES 176.1 For purposes of Section 207 (a)(9) of the Act (D.C. Offical Code § 31-5602.07(a)(9); D.C. Register at 47 DCR 7851), the following are deemed to be unlawful, unethical, or dishonest conduct or practice by an investmen…

177 AGENCY CROSS TRANSACTIONS 177.1 It shall be a violation of section 207(a)(9) of the Act (D.C. Offical Code § 31-5602.07(a)(9); D.C. Register at 47 DCR 7851) for any investment adviser while acting as a principal for his own account, knowingly to sell any security to or purcha…

178 FINANCIAL STATEMENTS AND REPORTS 178.1 Every investment adviser whose principal place of business is located in the District who has custody of client funds or securities or who requires payment of advisory fees six months or more in advance and in excess of $ 500 per client …

179 FINANCIAL REQUIREMENTS FOR INVESTMENT ADVISERS 179.1 For purposes of this section, "net capital" shall have the same meaning as set forth in SEC Rule 15c3-1 under the Securities Exchange Act of 1934, and any amendments thereto. 179.2 An investment adviser whose principal plac…

180 SURETY BOND 180.1 An investment adviser whose principal of business is located in the District and subject to the requirements of paragraph 179.2(b) shall file with the Department a Surety Bond in the amount of ten thousand dollars ($ 10,000.00). 180.2 The text of the require…

181 INVESTMENT ADVISER RECORDKEEPING 181.1 An investment adviser whose principal place of business is located in the District shall maintain and preserve the following books, ledgers, and records: (a) A journal or journals, including cash receipts and disbursements records and an…

182 All actual expenses of the examination by the Department of the books and records of a broker-dealer or investment adviser shall be paid by the company examined. The company shall promptly pay the District upon receipt of itemized bills provided by the Commissioner. For purpo…

183 RECORD RETENTION SCHEDULE 183.1 Books and records required to be made under the provisions of § 181.1 to paragraph 181.7(a), inclusive except for books and records required to be made under the provisions of §§ 181.1(k) and 181.5 shall be maintained and preserved in an easily…

184 PRESERVATION AND MAINTENANCE OF INVESTMENT ADVISER RECORDS 184.1 The records required to be maintained and preserved pursuant to § 181 may be immediately produced or reproduced by photographic film or, as provided in § 184.2 on magnetic disk, tape or other computer storage me…

185 EXAMINATION PROCEDURES AND FEES 185.1 The Commissioner may conduct examinations of investment advisers and may charge a reasonable fee for the examination, consistent with these regulations, as provided in Section 206 of the Act (D.C. Offical Code § 31-5602.06; D.C. Register …

186 INVESTMENT ADVISER OPINION AND NO ACTION LETTERS 186.1 Upon written request for a statement of the Department's position on the applicability of enforcement actions contemplated under the Act, the Director (or designee), in discretion, may honor such requests by issuing a no …

187 RESERVED SOURCE: Final Rulemaking published at 40 DCR 6732 (September 24, 1993); as amended by Emergency Rulemaking published at 48 DCR 1987 (March 2, 2001) [EXPIRED]; as amended by Final Rulemaking published at 47 DCR 1221 (February 25, 2000); as amended by Final Rulemaking …

199 DEFINITIONS 199.1 The definitions of terms found in Section 101 of the Act (D.C. Register at 47 DCR 7837) and the following words and phrases shall apply to this chapter. Act – shall mean the Securities Act of 2000, effective October 26, 2000 (D.C. Law 13-203; D.C. Official C…

200 GENERAL PROVISIONS 200.1 An application to register securities in the District of Columbia pursuant to Title III and Title IV of the Securities Act of 2000 (D.C. Law 13-203, 47 DCR 7852) shall be filed with the Department of Insurance, Securities and Banking ("Department"), o…

201 REGISTRATION BY NOTIFICATION 201.1 Applicants for Registration by Notification shall file with the Commissioner two copies of an application, including a statement demonstrating the applicant's eligibility for Registration by Notification, and a registration statement meeting…

202 REGISTRATION BY COORDINATION 202.1 A securities offering for which a registration statement has been filed with the Securities and Exchange Commission ("SEC) under the Securities Act of 1933 may be registered by coordination. 202.2 A registration statement filed under this se…

203 REGISTRATION BY COORDINATION OF SHELF REGISTRATIONS PURSUANT TO SEC RULE 415 OF THE 1933 ACT 203.1 Securities which are qualified to be registered on a Shelf Registration Statement with the SEC pursuant to Rule 415, and which are to be offered in series or offered and sold on…

204 REGISTRATION BY QUALIFICATION 204.1 Any securities offering may be registered by qualification. (a) Except as provided in § 205, an issuer who seeks to register a security by qualification shall file with the Department, the following documents and information: (1) Form U-1, …

205 SMALL CORPORATE OFFERINGS REGISTRATION 205.1 Applicants that are eligible for small corporate offerings registration may register by using the Form U-7 (Small Corporate Offering Registration Form), if the conditions set forth in this section and in the instructions to Form U-…

206 UNDERTAKING NOT TO SPLIT STOCK 206.1 By execution and filing of the Form U-7, the issuer undertakes not to split its common stock, or declare a stock dividend, for 2 years after the effectiveness of the registration. 206.2 Notwithstanding § 206.1 of this section, an issuer ma…

207 RESERVED SOURCE: Amended by Emergency Rulemaking published at 47 DCR 9910 (December 15, 2000) [EXPIRED]; as amended by Emergency Rulemaking published at 48 DCR 1987 (March 2, 2001) [EXPIRED]; as amended by Emergency and Proposed Rulemaking published at 48 DCR 3952 (May 4, 200…

208 SMALL CORPORATE OFFERINGS REPORTS FILED WITH THE COMMISSIONER 208.1 An issuer that qualifies for a small corporate offering registration shall file quarterly reports with the Department that shall: (a) Contain the information required by §§ 210 through 239; and (b) Certify th…

209 RESERVED SOURCE: Amended by Emergency Rulemaking published at 47 DCR 9910 (December 15, 2000) [EXPIRED]; as amended by Emergency Rulemaking published at 48 DCR 1987 (March 2, 2001) [EXPIRED]; as amended by Emergency and Proposed Rulemaking published at 48 DCR 3952 (May 4, 200…

210 PROSPECTUS 210.1 Sections 210 through 239 prescribe the form and content of the prospectus required to be filed as part of a registration statement for registration of securities by qualification and to be used in connection with the offering of securities so registered. 210.…

211 LEGIBILITY OF PROSPECTUS The prospectus and all notes to the financial statements and other tabular information included therein shall be printed, mimeographed, typewritten, or prepared by any similar process which will result in clear, legible copies. It shall be set in clea…