Ill. Admin. Code tit. 50, § 4430.20 - Required Disclosures
No pension fund shall engage an investment advisor, registered broker-dealer, bank, insurer or any other person for the purpose of providing investment services unless the following written disclosure requirements are met:
a) A description, expressed as a
set amount or range in dollars or as a percentage of the dollar value of a
particular transaction or transactions, of any and all commissions, fees,
penalties, or any other items of compensation related to a particular
transaction that may be received by any such person from the pension fund. The
written description must be furnished by any such person effectuating any
transaction with a pension fund, and the written description need not be
furnished with respect to each subsequent transaction to which the description
applies.
b) If the investment
service contemplated is one which might result in the pension fund acquiring an
asset from any inventory held by an investment advisor, registered
broker-dealer, bank, insurer, or other person, the written engagement or
contract must also include a statement disclosing:
1) The possibility that the investment
advisor, registered broker-dealer, bank or insurer may obtain a financial
benefit from such sale beyond the items listed under subsection (a) above;
and
2) That the realization and
extent of any such benefit is dependent upon market valuations as of the date
the inventoried asset was acquired as compared to the price at which the
pension fund acquires the asset; and
3) That the pension fund should take steps to
familiarize itself with the market in which any such acquisitions or
investments are to be made.
Notes
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