Maryland Administrative Code

.12 MLOE: General Transactional Exemption. A. Nature of Security. (1) Exemption under MLOE and this regulation is available for the following securities issued by a corporation, limited liability company, partnership, or real estate investment trust: (a) A note, stock, bond, debe…

.13 MLOE: Insignificant Deviations. A. Conditions. A failure to comply with a term of MLOE does not result in the loss of an exemption from the registration requirements of the Maryland Securities Act, Corporations and Associations Article, §11-501, Annotated Code of Maryland, fo…

.14 Exemption from the Maryland Securities Act, Corporations and Associations Article, §11-601(16), Annotated Code of Maryland, for Certain Securities. The following securities are exempt from registration filings under the Maryland Securities Act, Corporations and Associations A…

.15 Coordination with SEC Rule 505 or 506. A. Scope. (1) This regulation exempts under the Maryland Securities Act, Corporations and Associations Article, §11-602(15), Annotated Code of Maryland, certain transactions from the registration requirements of the Maryland Securities A…

.16 Vacant

.17 Exemption from the Maryland Securities Act, Corporations and Associations Article, §11-602(17), Annotated Code of Maryland, for Certain Transactions. The following transactions are exempt from registration filings under the Maryland Securities Act, Corporations and Associatio…

.01 Definitions. A. As used in the Maryland Securities Act, Corporations and Associations Article, §11-101(h), Annotated Code of Maryland, the following terms have the meanings indicated. B. Terms Defined. (1) “Compensation” means a form of payment or consideration, whether direc…

.02 Indirect Consideration. A. The antifraud provisions of the Maryland Securities Act, Corporations and Associations Article, §11-302(a), Annotated Code of Maryland, apply to a person who receives consideration indirectly from another person for: (1) Advising the person as to th…

.03 Dishonest or Unethical Practices. A. Definitions. As used in this regulation, the following terms have the meanings indicated: (1) “Affiliate” has the meaning stated in §2(a)(3) of the Investment Company Act of 1940. (2) “Found” means determined or ascertained by adjudication…

.04 Custody of Client Funds or Securities. A. Conditions of Custody. As provided in the Maryland Securities Act, Corporations and Associations Article, §11-302(f), Annotated Code of Maryland, it is unlawful for an investment adviser to take or have custody of securities or funds …

.05 Information to be Furnished to Clients (“Brochure Rule”). A. Unless otherwise provided in this regulation, an investment adviser may fulfill the disclosure requirements of the Maryland Securities Act, Corporations and Associations Article, §§11-302(d) and 11-411(b), Annotated…

.06 Agency Cross Transactions. A. Definition. For purposes of this regulation, “agency cross transaction for an advisory client” means a transaction in which a person acts as an investment adviser in relation to a transaction in which the investment adviser, or a person controlli…

.07 Exemption from the Maryland Securities Act, Corporations and Associations Article, §11-302(a)(4), for Certain Broker-Dealers. A. Definitions. As used in this regulation: (1) “Publicly distributed written materials” means written materials that are distributed to 35 or more pe…

.08 Exemption from the Maryland Securities Act, Corporations and Associations Article, §11-302(e)(1)(i) for Performance-Based Compensation. A. Definitions. As used in this regulation: (1) “Affiliate” has the meaning stated in §2(a)(3) of the Investment Company Act of 1940. (2) “C…

.09 Transactions Considered Not to be Assignments. For purposes of the Maryland Securities Act, Corporations and Associations Article, §11-302(e)(1)(ii), Annotated Code of Maryland, a transaction that does not result in a change of actual control or management of an investment ad…

.10 Electronic Filing with Designated Entity. A. Designation. Pursuant to the Maryland Securities Act, Corporations and Associations Article, §11-405(a), Annotated Code of Maryland, the Commissioner designates the web-based Investment Adviser Registration Depository (IARD) operat…

.11 Applications for Investment Advisers and Notice Filings for Federal Covered Advisers. A. Application Form for Investment Adviser Registration. (1) Initial Application. An application for initial registration as an investment adviser shall be made by completing Form ADV (Unifo…

.12 Initial and Renewal Registration as Investment Adviser Representative. A. Method of Filing. Until the IARD is capable of accepting applications to register investment adviser representatives, an application for initial or renewal registration as an investment adviser represen…

.13 Investment Adviser Supervision. A. An investment adviser registered or required to be registered in this State shall establish, maintain, and enforce written supervisory guidelines that are reasonably designed to: (1) Supervise the activities of an investment adviser represen…

.14 Examination Requirements for Investment Advisers and Investment Adviser Representatives. A. Definitions. As used in this regulation, the following terms have the meanings indicated: (1) “Approved IAR continuing education credit” means the materials, written, oral, or otherwis…

.15 Financial Requirements for Certain Investment Advisers. A. For purposes of this regulation, the following terms have the meanings indicated: (1) “Net assets” means the excess of assets over liabilities, as determined by generally accepted accounting principles. (2) “Net capit…

.16 Record-Keeping Requirements for Investment Advisers. A. An investment adviser registered or required to be registered in this State shall maintain and preserve the following books, ledgers, and records: (1) A journal or journals, including cash receipts and disbursements reco…

.17 Financial Reporting Requirements for Certain Investment Advisers. A. A registered investment adviser that has custody of client funds or securities, or requires payment of advisory fees 6 months or more in advance and in excess of $500 per client, shall file with the Commissi…

.18 Correction of Documents Filed by Investment Advisers and Investment Adviser Representatives. A. Scope. This regulation governs amendment filings for investment advisers and investment adviser representatives that have not yet transitioned onto the IARD. Investment advisers an…

.19 Withdrawal of Investment Adviser and Investment Adviser Representative Registrations. A. Investment Adviser. An application for withdrawal of registration or of an application to register as an investment adviser shall be made by completing Form ADV-W (Notice of Withdrawal fr…

.20 Exemption from the Maryland Securities Act, Corporations and Associations Article, §11-101(i)(2), Annotated Code of Maryland, for Certain Individuals. Under the Maryland Securities Act, Corporations and Associations Article, §11-101(i)(2), Annotated Code of Maryland, an inves…

.21 Exemption from the Maryland Securities Act, Corporations and Associations Article, §11-101(h)(2)(iii)3, Annotated Code of Maryland, for Certain Individuals. For the purposes of the Maryland Securities Act, Corporations and Associations Article, §11-101(h)(2)(iii)3, Annotated …

.22 Cancellation of Investment Adviser and Investment Adviser Representative Applications. A. Abandonment of Application. For purposes of this regulation and the Maryland Securities Act, Corporations and Associations Article, §11-414, Annotated Code of Maryland, an application is…

.01 Scope. A. This chapter contains procedures for administrative hearings before the Maryland Securities Commissioner which are conducted under the: (1) Maryland Securities Act, Corporations and Associations Article, Title 11, Annotated Code of Maryland (“the Maryland Securities…

.02 Definitions. A. In this chapter, the following terms have the meanings indicated. B. Terms Defined. (1) “Administrative law judge” means a person authorized to conduct hearings in contested cases under State Government Article, Title 9, Subtitle 16, Annotated Code of Maryland…

.03 Time and Place of Filing. A. Place of Filing. Papers required or permitted to be filed under this chapter, or any provision of applicable law, shall be filed with the Office of the Attorney General, Division of Securities, 200 St. Paul Place, 20th Floor, Baltimore, MD 21202-2…

.04 Form of Papers. A. Caption. A pleading or other paper filed by a party with the Commissioner shall contain a caption that sets forth: (1) The name of the first listed respondent; (2) The file number assigned to the case by the Division; and (3) A brief descriptive title of th…

.05 Initiation of Contested Case. A. Service of Summary Order or Show Cause Order. The Division shall promptly serve a copy of a summary order or a show cause order upon each respondent named in the order. Service may be made by personal service or by registered or certified mail…

.06 Answer. A. Time for Filing. A respondent shall file with the Commissioner a written answer to a show cause or summary order within 15 days of service of the order and within 7 days of service of any amended order. The parties may agree to extend the time for filing the answer…

.07 Delegation of Hearing Authority. A. Delegation. The Commissioner may delegate authority to conduct a hearing to the Office of Administrative Hearings or to another person designated in accordance with State Government Article, §10-205(a), Annotated Code of Maryland. B. Scope …

.08 Notice of Hearing. A. Advance Written Notice. If a respondent requests a hearing, or if the Commissioner otherwise determines that a hearing concerning a summary order or a show cause order is appropriate, the Commissioner shall give the parties reasonable advance written not…

.09 Representation. A. An individual may appear on the individual's own behalf. B. A party may be represented by an attorney authorized to practice law in Maryland or, when authorized by law, appear through a representative who is not an attorney. An attorney who is not a member …

.10 Addition, Deletion, and Substitution of Parties. The Commissioner may, upon motion of a party, order the addition, deletion, or substitution of parties.

.11 Consolidation of Cases. If separate proceedings involve a common question of law or fact, the Commissioner may consolidate the proceedings in whole or in part.

.12 Discovery. A. Document Requests. A party may serve a written document request on any other party requiring that party to produce, within 15 days, for inspection and copying, any documents or tangible items: (1) Relevant to the subject matter of the case; and (2) Not privilege…

.13 Subpoenas. A. Issuance of Subpoenas. Upon the request of any party, the Commissioner may issue subpoenas requiring the attendance and testimony of witnesses and the production of documents and tangible items in the possession or under the control of the witness. B. Applicatio…

.14 Prehearing Conferences. A. Scheduling of Conference. The Commissioner, upon request of a party or when the Commissioner otherwise believes it appropriate, may require the parties to appear at a specified date, time, and place for a prehearing conference before the date set fo…

.15 Failure to Appear. A. Conduct of Hearing in Party's Absence. If a party, after receiving notice of a prehearing conference or hearing, fails to appear at the conference or hearing, the Commissioner may proceed to hold the conference or hearing in that party's absence. B. Defa…

.16 Motions—Generally. A. Form and Content. Unless otherwise permitted by these regulations or by the Commissioner, motions shall: (1) Be made in writing, unless otherwise permitted by the Commissioner during the course of a hearing; and (2) State concisely the question to be det…

.17 Motions for Summary Decision. A. Time for Filing. A party may move at any time for summary decision as to any substantive issue in the case. B. Standard. The Commissioner may issue a summary decision if the Commissioner finds that there is no genuine issue as to any material …

.18 Conduct of Hearings. A. Presiding Officer. The Commissioner shall preside at all hearings unless the Commissioner has delegated authority to conduct a hearing to the Office of Administrative Hearings or other hearing officer designated in accordance with State Government Arti…

.19 Submission of Case on Documentary Record. The Commissioner may elect not to hold a hearing if all parties agree to submit the case on the documentary record and waive their right to appear.