HBA-MPM H.B. 2846 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2846
By: Craddick
Pensions & Investments
3/27/2001
Introduced



BACKGROUND AND PURPOSE 

Current law does not place certain registration requirements on individuals
who render services as investment advisers.  Some latitude with respect to
registration should be given to individuals whose primary occupation or
trade is not investment advising, who only have a small number of clients,
and who offer simple investment advice.  House Bill 2846 sets forth
registration requirements for individuals operating as investment advisers
and allows certain individuals who do not represent themselves to the
public as investment advisers to be exempt from registration under the
Securities Act. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

ANALYSIS

House Bill 2846 amends the Securities Act to prohibit a person, firm, or
corporation directly or indirectly through agents from rendering services
as an investment adviser (adviser) without being registered under the
Securities Act.  An agent is prohibited from rendering services on behalf
of a dealer as an adviser unless registered as an agent of a registered
dealer under the Securities Act.  The registration requirements do not
apply to an adviser or adviser's agent who during the preceding year had
fewer than 15 clients, who does not hold itself out to the public as an
adviser, and who does not act as an adviser to an investment company
registered under the Investment Company Act or a company that elects to be
a business development company under the Investment Company Act.  The bill
sets forth the method of determining the number of clients an adviser had
and makes exceptions for specified individuals who are not considered
clients. 

EFFECTIVE DATE

September 1, 2001.