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.