PENNSYLVANIA INVESTMENT ADVISER NOTICE FILING PACKET American LegalNet, Inc. www.FormsWorkflow.com PENNSYLVANIA SECURITIES COMMISSION 1010 N. Seventh Street Eastgate Office Building, 2nd Floor Harrisburg, PA 17102Ͳ1410 Filing Requirements: 07/01/2007 PENNSYLVANIA INVESTMENT ADVISER NOTICE FILING REQUIREMENTS Contact: Robyn Galloway (717) 783Ͳ4211 TDD: AT&T Relay Center 1Ͳ800Ͳ654Ͳ5984 Alternate formats of this document may be available on request. Call (717) 787Ͳ1165 or via AT&T Relay Center. This document and additional forms are also available on the Pennsylvania Securities Commission website at “www.psc.state.pa.us”. GENERAL INSTRUCTIONS & FILING REQUIREMENTS: Any federally covered adviser desiring to make a “NOTICE” filing in Pennsylvania must file the following thru the Investment Adviser Registration Depository (“IARD”): 1. Form ADV, Part IA & Part II with Pennsylvania identified under item 2B. NOTE: Information concerning IARD filings is available at: www.iard.com IARD Document Processing FINRA Regulation, Inc. P.O. Box 9495 Gaithersburg, MD 20898Ͳ9495 (240) 386Ͳ4848 Page 1 of 5 American LegalNet, Inc. www.FormsWorkflow.com 2. $350.00 Pennsylvania Notice Filing Fee. (Checks should be made payable to “FINRA REGULATION, INC”) When making a “NOTICE FILING” in Pennsylvania (thru the IARD), the following additional items (if required), must be filed directly with the Pennsylvania Securities Commission. 3. Please note, any Investment Adviser Representatives [as defined in 17 CFR 275.203AͲ3(a) attached] who will have a "place of business" [as defined in 17 CFR 275.203AͲ3(b) attached] in Pennsylvania must be registered as an "investment adviser representative". In order to be registered, the "investment adviser representative" must meet the examination requirement contained in Regulation 303.032 (see Item D.) An initial application for registration as an IAR (“RA” designation) must be filed through the IARD. NOTE: The investment adviser (entity) must be an IARD participant and have an IAR entitlement before the IARD will accept IAR applications. A. Once entitled, the firm can now begin the process of filing an electronic Form UͲ4 (See Chapter Nine of the IARD Firm User’s Manual.) It should be noted that the firm does not have to complete the entire Form UͲ4 at one time. The firm can enter and save the data and then return at a later time to complete and electronically submit the Form UͲ4. B. The $117.00 Pennsylvania IAR filing fee will be deducted from your IARD account. In addition, the IARD will charge each IAR a oneͲtime initial setͲup fee of $45.00 with an annual maintenance fee of $45.00. C. Pennsylvania does not require the filing of fingerprint cards on behalf of the IAR applicant. D. The RA must meet one of the following qualifications (see Commission Regulation §303.032): Page 2 of 5 American LegalNet, Inc. www.FormsWorkflow.com 1. Passing results: a. Received, on or after January 1, 2000, and within 2 years immediately prior to the date of filing an application with the Commission, a passing grade on The Uniform Investment Adviser Law Examination (Series 65), or successor examination. ͲORͲ b. Received, on or after January 1, 2000, and within 2 years immediately prior to the date of filing an application with the Commission, a passing grade on the General Securities Representative Examination (Series 7) administered by the National Association of Securities Dealers, Inc. and the Uniform Combined State Law Examination (Series 66), or successor examinations. ͲORͲ c. NOTE: Received, on or after January 1, 2000, a passing grade on either the Series 65 examination or passing grades on both the Series 7 and Series 66 examinations and has not had a lapse in registration as an investment adviser or investment adviser representative in any state other than this Commonwealth for a period exceeding 2 years immediately prior to the date of filing an application with the Commission. Grandfathering and examination waivers are set forth in Commission Regulation §303.032(b) and (c) respectively. Page 3 of 5 American LegalNet, Inc. www.FormsWorkflow.com SUPPLEMENTAL REQUIREMENTS: 4. When requesting waiver of the Examination Requirements in accordance with Regulation 604.016, the following must be provided: a. b. A detailed biographical sketch which substantiates the individual's previous experience (to include duties, responsibilities and accomplishments) in securities, banking, finance or other related business that forms the basis for your request. c. A completed "Certification" (copy enclosed) on behalf of each individual attesting to the fact that he/she has reviewed the 1972 Act and its regulations; and d. 5. A letter requesting waiver of the examination requirements setting forth your basis for the request; Verification of the PROFESSIONAL DESIGNATION (if any) awarded to such individual. Registrant must notify the Commission in writing within 30 days after the termination of or withdrawal from employment of any "Investment Adviser Representative" furnishing investment advice in Pennsylvania. In accordance with Regulation 305.061(c) notification shall be filed on Form UͲ5, "Uniform Termination Notce for Securities Industry Registration." Page 4 of 5 American LegalNet, Inc. www.FormsWorkflow.com Enclosures: Pa. Securities Act of 1972 Section 102(j). Section 102(j.1). Section 301. Section 302. Section 303. 64 Pa. Code §303.014. §303.015. §303.032. §305.019 §305.061. §604.016 §604.020 Definition of "Investment adviser" Definition of "Investment adviser representative" Registration requirement Exemptions Registration and Notice Filing Procedure. Investment adviser representative registration procedure Notice filing for FederallyͲcovered advisers. Examination requirements for investment advisers and investment adviser representatives Dishonest and unethical practices Withdrawal of registration or notice filing. Guidelines for waivers of Uniform Securities Agent State Law Examination (Series 63), Uniform Investment Adviser Law Examination (Series 65) and General Securities Representative NonͲMember Examination (Series 2)Ͳstatement of policy. BrokerͲdealers, investment advisers, brokerͲdealer agents and investment adviser representatives using the Internet for general dissemination of information on products and services Ͳ statement of policy. Code of Federal Regulations §275.203AͲ3 Definitions "Investment adviser representative" and "Place of business" Miscellaneous Pennsylvania Securities Commission Publication Order Form Examination waiver CERTIFICATION Page 5 of 5 American LegalNet, Inc. www.FormsWorkflow.com SECTION 102(j) OF THE PENNSYLVANIA SECURITIES ACT OF 1972 (j) "Investment adviser" means any person who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing or selling securities, or who, for compensation and as a part of a regular business, issues or promulgates analyses or reports concerning securities. "Investment adviser" does not include: (i) A bank; (ii) A lawyer, accountant, engineer or teacher whose performance of these services is solely incidental to the practice of his profession; (iii) A broker-dealer registered under this act without the imposition of the condition referred to in section 305(b)(v); (iv) A publisher of any bona fide newspaper, news column, newsletter, news magazine or business or financial publication or service, whether communicated in hard copy form or by electronic means, or otherwise, that does not consist of the rendering of advice on the basis of the specific investment situation of each client and is of general, regular and paid circulation; and the agents and servants thereof in the performance of their regular duties on behalf of such publication or service; (v) A person whose advice, analyses or reports relate only to securities exempted under section 202(a); (vi) A person who has no place of business in this State if his only clients in this State are other investment advisers, federally covered advisers, broker-dealers or institutional investors; (vii) A person who has a place of business in this State and, during the preceding twelve-month period has had not more than five clients in or out of this State and does not hold himself out generally to the public as an investment adviser; (viii) A person that is an investment adviser representative; (ix) A federally covered adviser; (x) A person excluded from the definition of “investment adviser” under section 202(a)(11) of the Investment Advisers Act of 1940 (54 Stat. 847, 15 U.S.C. § 80b2(a)(11)); or (xi) Other persons not within the intent of this subsection whom the commission by regulation designates. American LegalNet, Inc. www.FormsWorkflow.com SECTION 102 (j.1) OF THE PENNSYLVANIA SECURITIES ACT OF 1972 (j.1) “Investment adviser representative” means: (i) With respect to any investment adviser registered or required to be registered under this act, any partner, officer, director, or person occupying a similar status or performing similar functions, or other individuals employed by or associated with an investment adviser, except clerical or administrative personnel, who performs any of the following: (A) Makes any recommendations or otherwise renders advice regarding securities; (B) Manages accounts or portfolios of clients; (C) Determines which recommendation or advice regarding securities should be given; (D) Solicits, offers or negotiates for the sale of, or sells, investment advisory services; or (E) Supervises employes who perform any of the foregoing; (ii) With respect to any federally covered adviser, any individual employed by or associated with a federally covered adviser who is an “investment adviser representative” and who has a “place of business” in this State as those terms are defined in the rules and regulations of the Securities and Exchange Commission. American LegalNet, Inc. www.FormsWorkflow.com SECTION 301 OF THE PENNSYLVANIA SECURITIES ACT OF 1972 (a) It is unlawful for any person to transact business in this State as a brokerdealer or agent unless he is registered under this act. (b) It is unlawful for any broker-dealer or issuer to employ an agent to represent him in this State unless the agent is registered under this act. The registration of an agent is not effective during any period when he is not associated with a specified broker-dealer registered under this act or a specified issuer. No agent shall at any time represent more than one broker-dealer or issuer, except that where affiliated organizations are registered broker-dealers, an agent may represent one or more of such organizations. When an agent begins or terminates a connection with a brokerdealer or issuer, or begins or terminates those activities which make him an agent, the agent as well as the broker-dealer or issuer shall promptly notify the commission. The commission may adopt a temporary registration procedure to permit agents to change employers without suspension of their registrations hereunder. (c) It is unlawful for any person to transact business in this State as an investment adviser unless he is so registered or registered as a broker-dealer under this act or unless he is exempted from registration. It is unlawful for any person to transact business in this State as an investment adviser representative unless he is so registered or exempted from registration. (c.1) The following apply: (1) It is unlawful for any: (i) person required to be registered as an investment adviser under this act to employ an investment adviser representative unless the investment adviser representative is registered under this act or exempted from registration, provided that the registration of an investment adviser representative is not effective during any period when he is not employed by an investment adviser registered under this act; or (ii) federally covered adviser to employ, supervise or associate with an investment adviser representative having a place of business in this Commonwealth, unless such investment adviser representative is registered under this act or exempted from registration. (2) If a registered investment adviser representative begins or terminates employment with an investment adviser or a federally covered adviser, the investment adviser in the case under paragraph (1)(i), or the investment adviser representative in the case of paragraph (1)(ii), shall promptly notify the commission. American LegalNet, Inc. www.FormsWorkflow.com (3) The commission may adopt a temporary registration procedure to permit investment adviser representatives to change employers without suspension of their registrations under this act. (d) It is unlawful for any licensed broker-dealer, agent or investment adviser to effect a transaction in securities, directly or indirectly, in this State if the registrant is in violation of this act, or any regulation or order promulgated under this act of which he has notice, if such violation (i) is a material violation; (ii) relates to transactions effected in this State; and (iii) has been committed by such registrant, or if the information contained in his application for registration, as of the date of such transaction, is incomplete in any material respect or is false or misleading with respect to any material fact. (e) Every registration or notice filing expires on December 31 of each year unless renewed. No registration or notice filing is effective after its expiration, unless a renewal application has been timely filed, and expiration of a registration for which no renewal application has been filed is deemed an application for withdrawal under section 305(f). (f) It is unlawful for any federally covered adviser to conduct advisory business in this State, unless such person complies with the provisions of section 303(a)(iii). American LegalNet, Inc. www.FormsWorkflow.com SECTION 302 OF THE PENNSYLVANIA SECURITIES ACT OF 1972 Section 302. Exemptions.–The following persons shall be exempted from the registration provision of section 301: (a) A broker-dealer registered under the Securities Exchange Act of 1934, who has not previously had any certificate denied or revoked under this act or any predecessor statute, if he has no place of business in this State and, during any period of twelve consecutive months, he does not direct offers to sell or buy into this State in any manner to persons other than broker-dealers, institutional investors or governmental agencies and other instrumentalities designated by regulation of the commission, or to more than five other customers in this State, whether or not the offer or any of the offeror or any of the offerees is then present in this State. (b) An agent in so far as he effects transactions on behalf of a broker-dealer who is exempted by the provisions of subsection (a). (c) A person who represents an issuer in effecting transactions in securities registered under section 205 or 206 who: (1) Is a bona fide officer, director, partner or employe of the issuer or an individual occupying similar status or performing similar functions; and (2) Does not receive any compensation, directly or indirectly, for effecting the transactions. (d) An investment adviser who does not have a place of business in this State and during the preceding twelve-month period has had not more than five clients who are residents of this State exclusive of other investment advisers, federally covered advisers, broker-dealers or institutional investors. (d.1) An investment adviser representative who is employed by or associated with an investment adviser insofar as he transacts business in this State on behalf of an investment adviser who is exempted by the provisions of subsection (d). (d.2) An investment adviser representative who has a place of business in this State and is employed by or associated with a federally covered adviser and the federally covered adviser meets any of the criteria described in section 303(aa)(iii)(A), (B), or (C). (e) Any person who represents an issuer in effecting transactions in: (1) securities that are exempted by section 202(e), (f) or (g); (2) securities involved in a transaction exempted by section 203(c), (g), (k), (l) or (m); or (3) securities which are covered securities under section 18(b)(1) of the Securities Act American LegalNet, Inc. www.FormsWorkflow.com of 1933 (48 Stat. 74, 15 U.S.C. 77r(b)(1)). (f) The commission may by such regulations as it deems necessary or appropriate in the public interest or for the protection of investors, either unconditionally or upon specified terms and conditions or for specified periods, exempt from the provisions of section 301 any class of persons specified in such regulations. American LegalNet, Inc. www.FormsWorkflow.com Section 303. Registration and Notice Filing Procedure.–(a) (I) except as provided by clause (iii), any broker-dealer, agent, investment adviser or investment adviser representative may obtain an initial or renewal license by filing an application with the commission. The application shall contain such information, and in such detail, as the commission by rule requires concerning the applicant’s form and place of organization, proposed method of doing business, and financial condition, the qualifications and experience of the applicant, including, in the case of a broker-dealer or investment adviser, the qualifications and experience of any partner, officer, director, or affiliate, or a person occupying a similar status or performing similar functions any injunction or administrative order or conviction referred to in section 305(a)(ii), information about affiliates or predecessors of the applicant, and any other matters which the commission determines are relevant to the application. If a broker-dealer, agent, investment adviser or investment adviser representative seeks to obtain an initial or renewal license and, in connection therewith, requests a waiver of any requirement imposed under this section or section 304 or any regulation promulgated thereunder, the commission, in granting the waiver, may impose conditions on, or limit the scope of, the initial or renewal license. (ii) If no denial order is in effect and no proceeding is pending under section 305, the registration becomes effective on the forty-fifth day after the filing of the application therefor or any material amendment thereto, or on such earlier date as the commission may order. The commission is directed to cooperate with other securities administrators and regulatory authorities to simplify and coordinate registration, application and renewal procedures. (iii) A federally covered adviser shall file with the commission, prior to acting as a federally covered adviser in this State, a copy of such documents as have been filed with the Securities and Exchange Commission which the commission, by regulation, may require, together with the fee specified in section 602(d.1). This requirement shall not apply to a federally covered adviser that: (A) Has its prinicpal place of business in this State and whose only clients in this State are investment advisers, federally covered advisers, broker-dealers or institutional investors; (B) Does not have a place of business in this State and during the preceding twelvemonth period has had not more than five clients who are residents of this State, exclusive of other investment advisers, federally covered advisers, broker-dealers or institutional investors; or (C) Meets the definition of any person described in section 102 (j) (I) through (viii), (x) or (xi), except a federally covered adviser that is also a broker-dealer registered under section 301, that has an individual employed by or associated with such person who meets the definition of investment adviser representative in section 102(j.1)(ii). (b) A registered broker-dealer or investment adviser may file an application for registration of a successor, whether or not the successor is then in existence, for the unexpired portion of the registrant’s term. A federally covered adviser may file a notice filing for a successor, whether or not the successor is then in existence, for the unexpired portion of the notice period. There shall be no filing fee. American LegalNet, Inc. www.FormsWorkflow.com (c) The commission may by regulation prescribe standards of qualification with respect to training, experience and knowledge of the securities business and provide for an examination, which may be written or oral or both, to be taken by any class of or all applicants, as well as persons who represent or will represent an investment adviser, and the commission may by order require an examination of a licensed broker-dealer, agent or investment adviser for due cause. (d) the commission may be regulation require a minimum capital for registered broker-dealers, subject to the limitations of section 15 of the Securities Exchange Act of 1934, (48 Stat. 881, 15 U.S.C. §80b18a). The commission may classify broker-dealers for purposes of such requirements and may establish different requirements for those investment advisers who maintain custody of clients’ funds or securities or who have discretionary authority over same and those investment advisers who do not. (e) The commission may by regulation require surety bonds to be posted by any broker-dealer, investment adviser, and any issuer who employs agents subject to registration under section 301 in connection with effecting transactions in any security not exempted b y section 202(e), (f), or (g) or effecting securities transactions not exempted by section 203(c), (g), (k), (l) or (m) in any amount the commission may prescribe, subject to the limitations of section 15 of the Securities Exchange Act of 1934 (48 Stat. 881, 15 U.S.C. §780) for brokerdealers and section 222 of the Investment Advisers Act of 1940 for investment advisers and may determine their conditions. All bonds required shall provide for suit thereon by injured customers, clients or purchasers, but no bond may be required of any registered brokerdealer or investment adviser whose net capital or minimum financial requirements exceeds the amount prescribed by regulation for this purpose. Such bond, unless cancelled as provided herein, shall be in effect during the entire period that a registration is in effect. Every bond shall contain a provision that such bond is not cancellable, except on thirty-days prior written notice to the person by whom the bond was posted and the commission, provided that such cancellation shall not affect any liability incurred or accrued prior to the effective date of such cancellation. American LegalNet, Inc. www.FormsWorkflow.com 64 Pa. Code § 303.014. Investment adviser representative registration procedures. (a) An application for initial registration as an investment adviser representative of an investment adviser or Federally-covered adviser shall contain the information requested in and shall be made on the Uniform Application for Securities Industry Registration or Transfer Form (Form U-4), or a successor form. The investment adviser representative and the investment adviser or Federally covered adviser shall complete and file with the Commission or with an investment adviser registration depository designated by order of the Commission one copy of Form U-4 and exhibits thereto accompanied by the filing fee required by section 602(d.1) of the act (70 P. S. § 1-602(d.1)), the compliance assessment required by section 602.1(a)(1) of the act (70 P. S. § 1-602.1(a)(1)) and the results evidencing passage of the examinations required by § 303.032 (relating to qualification of and examination requirement for investment advisers and investment adviser representatives). (b) An investment adviser representative and an investment adviser or Federally-covered adviser shall take necessary steps to ensure that material information contained in Form U-4 remains current and accurate. If a material statement made in the Form U-4 becomes incorrect or incomplete, the investment adviser representative and the investment adviser or Federally-covered adviser shall file with the Commission an amendment to Form U-4 within 30 days of the occurrence of the event which requires the filing of the amendment. American LegalNet, Inc. www.FormsWorkflow.com 64 Pa. Code ' 303.032. Examination requirements for investment advisers and investment adviser representatives. (a) Examination requirements. An individual may not be registered as an investment adviser or investment adviser representative under the act unless the person has met one of the following qualifications: (1) Received, on or after January 1, 2000, and within 2 years immediately prior to the date of filing an application with the Commission, a passing grade on The Uniform Investment Adviser Law Examination (Series 65), or successor examination. (2) Received, on or after January 1, 2000, and within 2 years immediately prior to the date of filing an application with the Commission, a passing grade on the General Securities Representative Examination (Series 7) administered by the National Association of Securities Dealers, Inc. and the Uniform Combined State Law Examination (Series 66) or successor examinations. (3) Received, on or after January 1, 2000, a passing grade on either the Series 65 examination or passing grades on both the Series 7 and Series 66 examinations and has not had a lapse in registration as an investment adviser or investment adviser representative in any state other than this Commonwealth for a period exceeding 2 years immediately prior to the date of filing an application with the Commission. (b) Grandfathering. (1) Compliance with subsection (a) is waived if the individual meets the following qualifications: (i) Prior to January 1, 2000, the individual had received a passing grade on the Series 2, 7, 8 or 24 examination for registered representatives or supervisors administered by the National Association of Securities Dealers, Inc. and the Series 65 or Series 66 examinations. (ii) The individual has not had a lapse in employment as an investment adviser, investment adviser representative or principal or agent of a broker-dealer for any consecutive period exceeding 2 years immediately preceding the date of filing an application with the Commission. (2) An individual need not comply with subsection (a) if the individual meets the following qualifications: (i) Prior to January 1, 2000, the individual was registered as an investment adviser or investment adviser representative in any state requiring the American LegalNet, Inc. www.FormsWorkflow.com licensing, registration or qualification of investment advisers or investment adviser representatives. (ii) The individual has not had a lapse in registration as an investment adviser or investment adviser representative in another state for any consecutive period exceeding 2 years immediately preceding the date of filing an application with the Commission. (c) Waivers of exam requirements. Compliance with subsection (a) is waived if: (1) The individual meets the following qualifications: (i) Has no disciplinary history which requires an affirmative response to Items 23A-E or Item 23H of The Uniform Application for Securities Industry Registration or Transfer (Form U-4) or successor items thereto. (ii) Has been awarded any of the following designations which, at the time of filing of the application with the Commission, is current and in good standing: (A) Certified Financial Planner (CFP) awarded by the Certified Financial Planner Board of Standards, Inc. (B) Chartered Financial Consultant (ChFC) or Master of Science and Financial Services (MSFS) awarded by the American College, Bryn Mawr, Pennsylvania. (C) Chartered Financial Analyst (CFA) awarded by the Institute of Chartered Financial Analysts. (D) Personal Financial Specialist (PFS) awarded by the American Institute of Certified Public Accountants. (E) Chartered Investment Counselor (CIC) awarded by the Investment Counsel Association of America, Inc. (2) The individual is licensed as a certified public accountant, is currently in good standing and has no disciplinary history that requires an affirmative response to Items 14A-E or Item 14H of Form U-4 or successor items thereto, and has notified the Commission that the individual is eligible for a waiver of the examination requirement imposed by subsection (a). (3) The individual is licensed as an attorney, is currently in good standing and has no disciplinary history that requires an affirmative response to Items 14A-E or Item 14H of Form U-4 or successor items thereto, and has notified the American LegalNet, Inc. www.FormsWorkflow.com Commission that the individual is eligible for a waiver of the examination requirement imposed by subsection (a). (4) The individual has received an order from the Commission waiving compliance with subsection (a). American LegalNet, Inc. www.FormsWorkflow.com 64 Pa. Code §604.016. Guidelines for waivers of Uniform Securities Agent State Law Examination (Series 63), Uniform Investment Adviser Law Examination (Series 65) and General Securities Representative Non-Member Examination (Series 2) - statement of policy. (a) Under § 606.041(b)(2) (relating to delegation and substitution), the Commission has delegated to the Director of the Division of Licensing and Compliance and the Chief of the Licensing Section the authority to waive the requirement of §§303.031 and §303.032 (relating to examination requirements for agents; and qualification of and examination requirements for investment advisers and associated persons) to take and pass the Series 63, Series 65 and Series 2 examinations administered by the National Association of Securities Dealers (collectively, the "examination") or successor examinations. (b) Without otherwise restricting the discretionary authority granted to Commission staff by §606.041, the staff will consider the factors listed in this subsection in determining whether a waiver from the examination requirements of §303.031 or §303.032 would be granted. These factors are set forth for illustrative purposes only and do not constitute the entire range of considerations that may form the basis for granting or denying a waiver request. (1) Whether the applicant has disciplinary history for which staff would place the applicant under the Commission's Special Associated Person or Agent Review Program. (2) Whether the applicant has certified to Commission staff that the applicant has reviewed the act and this title. (3) Whether the applicant has substantial long-term and continuous experience as a principal, agent or employee, other than in a clerical capacity, of a broker-dealer or investment adviser. Staff also will consider whether the applicant has similar experience in any responsible position, other than in a clerical capacity, in the securities, banking, finance or other related business. (4) Whether the applicant has some continuous experience in a responsible position, other than in a clerical capacity, in the securities, banking, finance or other related business and also possesses educational credentials or professional designations such as one of the following: (i) An advanced degree obtained through graduation from a formal degree program of an accredited educational institution with a concentration in economics, finance, mathematics, business, business administration or similar subjects. (ii) A professional designation such as Chartered Financial Analyst (CFA), Chartered Investment Counselor (CIC), Certified Financial Planner (CFP), Chartered Financial Consultant (ChFC) or Masters of Science in Financial Services (MSFS). (iii) A license as a certified public accountant and is in good standing with the relevant licensing authority. (5) Whether the applicant is admitted to the bar of any state to practice law and is a member of the bar in good standing. American LegalNet, Inc. www.FormsWorkflow.com (6) Whether the applicant previously has passed the examination and has remained continuously employed in the securities industry or possesses some employment experience in the securities industry and has not had a significant lapse of this employment as of the date of filing of the application for registration with the Commission. (Editor's Note: §§604.013 - 604.015 were adopted as interim guidelines for the registration of associated persons as permitted by Act 190 of 1990. These guidelines were superceeded by §§303.014, 303.032, and 606.041, effective January 18, 1992) American LegalNet, Inc. www.FormsWorkflow.com 64 Pa. Code §604.020. Broker-dealers, investment advisers, broker-dealer agents and investment adviser representatives using the Internet for general dissemination of information on products and services - statement of policy (a) Section 301(a) of the act (70 P.S. §1-301(a)) provides that "[i]t is unlawful for any person to transact business in this State as a broker-dealer or agent unless he is registered under this act." (b) Section 301(c) of the act provides that "[i]t is unlawful for any person to transact business in this State as an investment adviser unless he is so registered or registered as a broker-dealer under this act or unless he is exempted . . . " Section 301(c) further provides that: [i]t is unlawful for any person to transact business in this State as an associated person unless he is so registered or exempted from registration . . . " (c) The Commission acknowledges that the Internet, the World Wide Web, and similar proprietary or common carrier electronic systems (collectively, the "Internet") have facilitated greatly the ability of broker-dealers, investment advisers, broker-dealer agents and associated persons of investment advisers to advertise and otherwise disseminate information on products and services to prospective customers and clients. (d) The Commission also acknowledges that certain communications made on the Internet are directed generally to anyone having access to the Internet and may be transmitted through postings on Bulletin Boards, displays on "Home Pages" or similar methods (hereinafter, "Internet Communications"). (e) The Commission further acknowledges that in certain instances, by distributing information on available products and services through Internet Communications available to persons in this Commonwealth, brokerdealers, investment advisers, agents and associated persons, as defined under section 102 of the act (70 P.S. § 1102), could be construed as "transacting business" for purposes of sections 301(a), and (c) of the act so as to require registration in this Commonwealth under section 301 of the act, since the Internet Communications would be received in this Commonwealth regardless of the intent of the person originating the communication. (f) Broker-dealers, investment advisers, broker-dealer agents (hereinafter BD agents) and associated persons (hereinafter IA reps) who use the Internet to distribute information on available products and services through Internet Communications directed generally to anyone having access to the Internet, will not be deemed to be "transacting business" in this Commonwealth for purposes of sections 301(a) and (c) of the act based solely on that fact if all the following conditions are met: (1) The Internet Communication contains a legend in which it is clearly stated that: (i) The broker-dealer, investment adviser, BD agent or IA rep in question may only transact business in this Commonwealth if first registered, excluded or exempted from State broker-dealer, investment adviser, BD agent or IA rep registration requirements. (ii) Follow-up, individualized responses to persons in this Commonwealth by the broker-dealer, investment adviser, BD agent or IA rep that involve either effecting or attempting to effect transactions in securities, or rendering personalized investment advice for compensation, will not be made absent compliance with State broker-dealer, investment adviser, BD agent or IA rep registration requirements, or an applicable exemption or exclusion. American LegalNet, Inc. www.FormsWorkflow.com (2) The Internet Communication contains a mechanism, including and without limitation, technical "fire walls" or other implemented policies and procedures, designed reasonably to ensure that prior to any subsequent, direct communication with prospective customers or clients in this Commonwealth, the broker-dealer, investment adviser, BD agent or IA rep is first registered in this Commonwealth or qualifies for an exemption or exclusion from the requirement. Nothing in this paragraph relieves a broker-dealer, investment adviser, BD agent or IA rep registered in this Commonwealth from any applicable securities registration requirement in this Commonwealth. (3) The Internet Communication does not involve either effecting or attempting to effect transactions in securities or the rendering of personalized investment advice for compensation in this Commonwealth over the Internet, but is limited to the dissemination of general information on products or services. (4) In the case of a BD agent or IA rep the following apply: (i) The affiliation of the BD agent or IA rep with the broker-dealer or investment adviser is prominently disclosed within the Internet Communication. (ii) The broker-dealer or investment adviser with whom the BD agent or IA rep is associated retains responsibility for reviewing and approving the content of any Internet Communication by a BD agent or IA rep. (iii) The broker-dealer or investment adviser with whom the BD agent or IA rep is associated first authorizes the distribution of information on the particular products and services through the Internet Communication. (iv) In disseminating information through the Internet Communication, the BD agent or IA rep acts within the scope of the authority granted by the broker-dealer or investment adviser. (g) The position expressed in this section extends to broker-dealer, investment adviser, BD agent and IA rep registration requirements within this Commonwealth only, and does not excuse compliance with applicable securities registration, antifraud or related provisions. (h) Nothing in this statement of policy affects the activities of any broker-dealer, investment adviser, BD agent and IA rep engaged in business in this Commonwealth that is not subject to the jurisdiction of the Commission under the National Securities Markets Improvement Act of 1996 (Pub. L. No. 104-290, 110 Stat. 3416), which will be codified in various sections of 15 U.S.C. The provisions of this §604.020 adopted July 10, 1998, effective July 11, 1998, 28 Pa.B. 3302. American LegalNet, Inc. www.FormsWorkflow.com [Code of Federal Regulations] [Title 17, Volume 3, Parts 240 to end] [Revised as of April 1, 1998] TITLE 17--COMMODITY AND SECURITIES EXCHANGES CHAPTER II--SECURITIES AND EXCHANGE COMMISSION PART 275--RULES AND REGULATIONS, INVESTMENT ADVISERS ACT OF 1940 Sec. 275.203A-3 Definitions. For purposes of section 203A of the Act (15 U.S.C. 80b-3A) and the rules thereunder: (a)(1) Investment adviser representative. “Investment adviser representative” of an investment adviser means a supervised person of the investment adviser more than ten percent of whose clients are natural persons other than excepted persons described in paragraph (a)(3)(i) of this section. (2) 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. (3) For purposes of this section: (i) Excepted person means a natural person who: (A) Immediately after entering into the investment advisory contract with the investment adviser has at least $500,000 under management with the investment adviser, or (B) The investment adviser reasonably believes, immediately prior to entering into the advisory contract, has a net worth (together with assets held jointly with a spouse) at the time the contract is entered into of more than $1,000,000. (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. (4) Supervised persons may rely on the definition of “client” in Sec. 275.203(b)(3)-1 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. (b) 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. (c) 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. American LegalNet, Inc. www.FormsWorkflow.com COMMONWEALTH OF PENNSYLVANIA PENNSYLVANIA SECURITIES COMMISSION Eastgate Office Building, 2nd Floor 1010 North Seventh Street Harrisburg, PA 17102-1410 CERTIFICATION I, , hereby certify to the Pennsylvania Securities Commission that I have carefully reviewed the Pennsylvania Securities Act of 1972 ("1972 Act") (70 P.S. §1-101 et. seq), and that I understand the responsibilities of a licensed Investment Adviser and of an "associated person" of a licensed Investment Adviser [as defined in Commission's Regulation 303.032(d)]. In particular, I certify that I have specifically studied the following provisions of such Act and the corresponding rules and regulations promulgated thereunder: 1. Section 102(t), providing for the definition of "security." 2. Section 201, providing for the registration requirement for securities. 3. Section 203(d), providing the requirements for exempting sales to a limited number of purchasers. 4. Section 203(e), providing the requirements for exempting offers to a limited number of offerees. 5. Section 203(f), providing the requirements for exempting initial and preorganizational sales. 6. Section 301, providing for the registration, renewals, and cancellation requirements for Broker-Dealers, Agents, and Investment Advisers. 7. Section 303, relating to registration procedures. 8. Section 304, relating to post-registration requirements. 9. Section 305, providing the basis for Denial, Suspension and Revocation of Broker-Dealers', Agents', and Investment Advisers' registration. 10. Section 401, relating to fraud, misrepresentation, and deceit involving sales and purchases. 11. Section 402, relating to market manipulation. 12. Section 403, relating to prohibited transactions involving Broker-Dealers and Agents. 13. Section 404, relating to prohibited activities involving Investment Advisers. 14. Section 405, relating to contract requirements. American LegalNet, Inc. www.FormsWorkflow.com 15. Section 406, prohibiting unlawful use of inside information. 16. Section 407, prohibiting misleading filings and misrepresentations of Commission Approval. 17. Section 501 and 502, providing for civil liabilities. 18. Section 503, providing for Joint and Several Liability, Contribution, and Corporation's Right of Indemnification. 19. Section 511, providing for Criminal Penalties. 20. Section 606(c), prohibiting certain advertisements. I so certify and make this filing with the Pennsylvania Securities Commission in connection with my request for waiver of the Uniform Investment Adviser Law Examination as contained in Commission's Regulation 303.032 and • • My application for an Investment Adviser's license; or My proposed activities as an "associated person" of a licensed Investment Adviser. Dated this day of , 19 . (Signature) (Printed or typed name) INVESTMENT ADVISER CERTIFICATION I, , an officer, director, partner or sole proprietor of ("Investment Adviser"), certify to the Pennsylvania Securities Commission that the above person proposing to act as an "associated person" of the Investment Adviser has been provided adequate instruction with respect to his/her responsibilities under the 1972 Act, and particularly the provisions enumerated above. Dated this day of , 19 . (Signature) (Printed or typed name) American LegalNet, Inc. www.FormsWorkflow.com