The Manual should be kept at hand
for easy reference. You are asked and
encouraged to raise questions, criticisms or comments about the manual. Suggestions for changes or additions are
welcome. Any questions regarding compliance issues must be directed to the
Senior Vice-President – Compliance who is the Chief Compliance Officer
The
Firm expects you to be thoroughly familiar with the procedures and policies as
set forth in this manual. Adherence to the policies and procedures set
forth will help to achieve our goal of uniform compliance. The Firm also requires you to be familiar
with the Code of Ethics which is available to all employees and to clients upon
request.
A. Use and Distribution of the Manual. The Manual is a basic part of the Firm's
Compliance Program. It is intended to be
revised or supplemented from time to time.
It is the responsibility of the
holder to see that his/her copy is up to date by inserting new material as
instructed or review the current copy on a shared directory. The adequacy of the policies and procedures
will be evaluated at least annually and a report provided to management.
Regarding the Manual, each officer,
principal, manager, supervisor or any other person having managerial or
supervisory responsibilities must:
(1) know and understand the contents;
(2) provide new employees, including
trainees, with a copy;
(3) ensure that all holders of the Manual
whom you supervise know and understand the contents, and use it in day‑to‑day
activities;
(4) ensure that any supplements are
distributed to persons under your supervision with proper instructions for
their use.
See the Firm’s organizational chart
for the supervisory system.
B. Overview of the Advisers Act. Before we begin our examination of specific
compliance issues, which you should understand, we need to first examine
existing Investment Adviser regulations and determine how and to what extent
they affect you.
Congress enacted the Investment
Advisers Act of l940 after finding that the activities of those providing
investment advice or investment advisory materials were of national concern
because of their effect on the economy.
Certain sections of the 1940’s Investment Advisors Act are not referred
in this manual due to the inapplicable nature of them in a manual such as
this. These are:
275.0-2 General procedures for serving non-residents
275.0-3 References for rules and regulations.
275.0-5 Procedure with respect to applications and
other matters.
275.0-6 Incorporations by reference in applications.
275.0-7 Small Entities under the Investment Advisors
Act for
purposes of the
Regulatory Flexibility Act.
275.203A-5 Reserved.
275.203A-6 Reserved
275.205-1 Definition of
“Investment Performance” of an Investment company and “Investment Record” of an
Appropriate Index of Securities Prices.
275.205-2 Definition of
“Specified Period” over which the asset value of the company or fund under
management is averaged.
275.206 (3)-1 Exemption of Investment
Advisers registered as Broker Dealers in connection with the provision of
certain Investment Advisory services.
275.222-1 Definitions.
275.222-2 Definition of
“client” for purposes of the National De Minimus Standard.
One of the important provisions of
the Investment Advisers Act of l940 calls for the registration of Investment
Advisers with the Securities and Exchange Commission (the
"Commission"). Once
registered, the Adviser must comply with the statute and regulations promulgated
under the Investment Advisers Act of l940.
Included among these are numerous anti‑fraud provisions and various
disclosure and financial reporting requirements. In general beginning in 2011 advisers with
assets under management greater than $100 million will be registered with the
SEC.
All other advisers are registered
with and regulated by states.
C.
Definitions.
For purposes
of section 203A of the Act (15 U.S.C. 80b-3a) and the rules thereunder:
Investment
Adviser Representative. “Investment adviser representative” of an investment
adviser means a supervised person of the investment adviser.
(i) Who has more than five
clients who are natural persons (other than excepted persons described in
paragraph (a)(3)(i) of this section); and
(ii) More than 10 percent of whose clients are natural persons (other than excepted persons described in
paragraph (a)(3)(i) of this section).
(1) Notwithstanding paragraph (a)(1) of this
section, a supervised person is not an investment adviser representative if the
supervised person:
(i) Does
not on a regular basis solicit, meet with, or otherwise communicate with
clients of the investment adviser; or
(ii) Provides only impersonal investment advice
(2)
For
purposes of this section:
(i) “Excepted
person” means a natural person who is a qualified client as described in
§275.205-3(d)(1).
(ii) “Impersonal investment advice” means investment advisory
services provided by means of written material or oral statements that do not
purport to meet the objectives or needs of specific individuals or accounts.
(3)
Supervised
persons may rely on the definition of “client” in §275.203(b)(3)-1 without
giving regard to paragraph (b) (6) of that section to identify clients for purposes of paragraph
(a)(1) of this section, except that supervised persons need not count clients
that are not residents of the United States.
Place
of Business.
“Place of business” of an investment adviser representative means:
(1) An
office at which the investment adviser representative regularly provides
investment advisory services, solicits, meets with, or otherwise communicates
with clients; and
(2)
Any
other location that is held out to the general public as a location at which
the investment adviser representative provides investment advisory services,
solicits, meets with or otherwise communicates with clients.
Principal
Office and Place of Business. “Principal office and place of business” of
an investment adviser means the executive office of the investment adviser from
which the officers, partners, or managers of the investment adviser direct, control,
and coordinate the activities of the investment adviser.
“Client” of an Investment Adviser.
(1) General. For purposes of section 203(b)(3) of the Act
[15 U.S.C 80b-3(b)(3)], the following are deemed a single client:
(A) A
natural person, and:
(i) Any minor child of the natural person;
(ii) Any relative, spouse, or relative of the
spouse of the natural person who has the same principal residence;
(iii) All accounts of which the natural person and /or the person
referred to in this paragraph (a)(1) are the only primary beneficiaries;
(B) (i)
A Corporation, general partnership, limited partnership, limited liability
company (except when the limited partnership or limited liability company is
determine to be a private fund) , trust (other than a trust referred to in
paragraph (a)(1)(iv) of this section), or other legal organization (any of
which are referred to hereinafter as a “legal organization”) that receives
investment advice based on its investment objectives rather than the individual
investment objectives of its shareholders, partners, limited partners, members,
or beneficiaries (any of which are referred to hereinafter as an “owner”); and
(ii) Two or more legal
organizations referred to in paragraph (a)(2)(i) of this section that have
identical owners.
(2)
Special
Rules. For purposes of this section:
(A) An owner must be counted as a client if the investment adviser
provides investment advisory services to the owner separate and apart from the
investment advisory services provided to the legal organization, provided,
however, that the determination that an owner is a client will not affect the
applicability of this section with regard to any other owner;
(B)
An
owner need not be counted as a client of an investment adviser solely because
the investment adviser, on behalf of the legal organization, offers, promotes,
or sells interests in the legal organization to the owner, or reports
periodically to the owners as a group solely with respect to the performance of
or plans for the legal organization’s assets or similar matters;
(C)
A
limited partnership or limited liability company is a client of any general
partner managing member or other person acting as investment adviser to the
partnership;
(D)
Any
person for whom an investment adviser provides investment advisory services
without compensation need not be counted as a client; and
(E)
An
investment adviser that has its principal office and place of business outside
of the
[1]
275.206(4)-7 (Compliance Procedures and Practices)
275.203.A-1 (Eligibility for SEC registration)
275.203.A-2 (Exemptions from Prohibition on SEC
Registration)