Section 26-B173. PERFORMANCE BASED COMPENSATION

 

173.1An investment adviser may enter into, extend, or renew an investment advisory contract, which provides for compensation to the investment adviser on the basis of a share of capital gains upon or capital appreciation of the funds, or any portion of the funds, of the client if the conditions of §§ 172.3 through 172.8 are met.

 

173.2The client entering into the contract shall be:

 

(a)A natural person or a company who, immediately after entering into the contract has at least $ 750,000 under the management of the investment adviser; or

 

(b)A person who the investment adviser and its investment adviser representatives reasonably believe, immediately before entering into the contract, is a natural person or a company whose net worth, at the time the contract is entered into, exceeds $ 1,500,000. The net worth of a natural person may include assets held jointly with that person's spouse.

 

(c)For purposes of this section, each equity owner of any such company will be considered a person.

 

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).