Section 26-B172. WRITTEN DISCLOSURE STATEMENTS (BROCHURE RULE)

 

172.1Unless 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 written disclosure statement, which may be either a copy of Part II of its Form ADV or a written document containing at least the information then so required by Part II of Form ADV.

 

172.2An investment adviser, except as provided in § 172.3, shall deliver the statement required by this section to an advisory client or prospective advisory client as follows:

 

(a)Not less than forty-eight (48) hours prior to entering into any written or oral investment advisory contract with such client, or

 

(b)At the time of entering into any such contract, if the advisory client has a right to terminate the contract within five (5) business days after entering into the contract.

 

172.3Delivery of the statement required by § 172.2 shall not be required in connection with entering into a contract for impersonal advisory services.

 

172.4An investment adviser, except as provided in § 172.5, annually shall, without charge, deliver or offer in writing to deliver upon written request to each of its advisory clients the statement required by this section.

 

172.5The delivery or offer required by § 172.2 shall not be required to be made to advisory clients receiving advisory services solely pursuant to a contract for impersonal advisory services requiring a payment of less than $ 200.00.

 

172.6With respect to an advisory client entering into a contract or receiving advisory services pursuant to a contract for impersonal advisory services, which requires a payment of $ 200.00 or more, an offer of the type specified in § 172.5 shall also be made at the time of entering into an advisory contract.

 

172.7Any statement requested in writing by an advisory client pursuant to an offer required by this section shall be mailed or delivered within seven (7) days of the receipt of the request.

 

172.8If an investment adviser renders substantially different types of investment advisory services to different advisory clients, any information required by Part II of Form ADV may be omitted from the statement furnished to an advisory client or prospective advisory client if such information is applicable only to a type of investment advisory service or fee which is not rendered or charged, or proposed to be rendered or charged, to that client or prospective client.

 

172.9Nothing in this section shall relieve an investment adviser from any obligation pursuant to any provision of the Act or the rules thereunder or other federal or state law to disclose any information to its advisory clients or prospective advisory clients not specifically required by this section.

 

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).