15 CSR 30-51.180 - Exemptions from Registration for Broker-Dealers, Agents, Investment Advisers, and Investment Adviser Representatives

PURPOSE: This rule prescribes exemptions from registration for broker-dealers, agents,investment advisers, and investment adviser representatives.

(1) Canadian Limited Registration Exemption.

(A) Broker-Dealer Exemption. A broker-dealer that is registered in Canada and who has no office or other physical presence in this state is exempted from broker-dealer registration pursuant to section 409.4-401(d), RSMo, provided it complies with the following conditions:

1. Registered with or is a member of a self-regulatory organization in Canada, stock exchange in Canada, or the Bureau des services financiers;

2. Maintains in good standing its provincial or territorial registration and its registration with or membership in a self-regulatory organization in Canada, stock exchange in Canada, or the Bureau des services financiers; and

3. Effects or attempts to effect transactions in securities-

A. With or for a person from Canada who is temporarily present in this state, with whom the Canadian broker-dealer had a bona fide broker-dealer-client relationship before the person entered the United States; or

B. With or for a person from Canada who is present in this state, whose transactions are in Canadian self-directed tax advantaged retirement account of which the person is the holder or contributor.

(B) Agent Exemption. An agent who represents a Canadian broker-dealer that is exempt under this rule is exempt from agent registration under section 409.4-402, RSMo.

(2) Exemption from Agent Registration for Agricultural Cooperative Agents. An individual who represents an agricultural cooperative and who effects or attempts to effect transactions in the cooperative's securities exempted under 15 CSR 30-54.195 is exempt from registering as an issuer agent under section 409.4-402, RSMo, provided the following conditions are met:

(A) The individual is currently employed in the capacity of store or plant manager by the issuer agricultural cooperative or an agricultural cooperative that is a member of the issuer agricultural cooperative;

(B) The individual's name and address has been properly submitted by the agricultural cooperative in the most recent notice filing under 15 CSR 30-54.195(2)(A); and

(C) General solicitation is not made in connection with the offer to sell or sale of the securities.

(3) Exemption from Investment Adviser Registration for Broker-Dealers with Investment Adviser Capacity.

(A) A broker-dealer registered under section 409.4-401, RSMo, that transacts business in this state as an investment adviser is exempt from registering as an investment adviser under section 409.4-403, RSMo, provided that the broker-dealer complies with the following conditions:

1. The broker-dealer must control and supervise all investment advisory activities of the investment adviser representatives; and

2. The broker-dealer must comply with the notice filing requirement set forth in 15 CSR 30-51.020(1)(C).

(4) Exemption from Investment Adviser Representative Registration for Broker-Dealer Agents. A broker-dealer agent registered under section 409.4-402, RSMo, that transacts business in this state as an investment adviser representative is exempt from registering as an investment adviser representative under section 409.4-404, RSMo, provided that the investment adviser representative is under the control and supervision of the registered broker-dealer.

(5) Exemption from Investment Adviser Representative Registration for Solicitors. A person who is paid a solicitor fee pursuant to 15 CSR 30-51.145(1) is exempt from registering as an investment adviser representative.

(6) Exemption for Investment Advisers to Private Funds.

(A) Definitions. For purposes of this regulation, the following definitions shall apply:

1. "Private fund adviser" means an investment adviser who provides investment advice solely to one (1) or more qualifying private funds;

2. "Qualifying private fund" means a private fund that meets the definition of a qualifying private fund in U.S. Securities and Exchange Commission (SEC) Rule 203(m)-1, 17 Code of Federal Regulations (CFR) 275.203(m)-1;

3. "3(c)(1) fund" means a qualifying private fund that is eligible for the exclusion from the definition of an investment company under Section 3(c)(1) of the Investment Company Act of 1940, 15 U.S.C. 80 a - 3(c)(1); and

4. "Venture capital fund" means a private fund that meets the definition of a venture capital fund in SEC Rule 203(1)-1, 17 CFR 275.203(1)-1.

(B) A private fund adviser is exempt from registering as an investment adviser under section 409.4-403, RSMo, if-

1. Neither the private fund adviser nor any of its advisory affiliates are subject to a disqualification as described in Rule 262 of SEC Regulation A, 17 CFR 230.262;

2. The private fund adviser files with the commissioner each report and amendment thereto that an exempt reporting adviser is required to file with the SEC pursuant to SEC Rule 204-4, 17 CFR 275.204-4; and

3. In the event the private fund adviser advises at least one (1) 3(c)(1) fund that is not a venture capital fund, then the private fund adviser also-

A. Reasonably believes that those 3(c)(1) funds (other than venture capital funds) are beneficially owned by persons that qualify as either-

(I) An "accredited investor" as defined by 17 CFR 230.501(a)(1), (2), (3), (4), (5), (7), or (8). For purposes of this section, an "accredited investor" under 17 CFR 230.501(a)(8) excludes any entity which has an equity owner that only qualifies as an accredited investor under 17 CFR 230.501(a)(6); or

(II) A "qualified client" as defined by 17 CFR 275.205 - 3(d)(1)(iii);

B. Discloses to each beneficial owner of a 3(c)(1) fund in writing and at the time of purchase the following:

(I) All services, if any, to be provided to individual beneficial owners;

(II) All duties, if any, the investment adviser owes to the beneficial owners; and

(III) Any other material information affecting the rights or responsibilities of the beneficial owners; and

C. Delivers or causes to be delivered annually to each beneficial owner of the fund financial statements of each 3(c)(1) fund that is not a venture capital fund.

(C) The report filings described in paragraph (6)(B)2. above shall be made electronically through the Investment Advisor Registration Depository (IARD). For purposes of this section, a report is filed when the report is accepted by the IARD on the state's behalf.

(D) The above notwithstanding, a private fund adviser includes an investment adviser that-

1. Before the effective date of this rule, was exempt from registration in reliance on 15 CSR 30-51.180(6);

2. Advises a fund that-

A. The private fund adviser advised before the effective date of this rule;

B. Has one (1) or more owners who, before the effective date of this rule, the private fund adviser reasonably believed qualified as an "accredited investor" as defined by 17 CFR 230.501(a)(6); and

C. After the effective date of this rule, only sells its securities to persons who qualify as either-

(I) An "accredited investor" as defined by 17 CFR 230.501(a)(1), (2), (3), (4), (5), (7), or (8). For purposes of this section, an "accredited investor" under 17 CFR 230.501(a)(8) excludes any entity which has an equity owner that only qualifies as an accredited investor under 17 CFR 230.501(a)(6); or

(II) A "qualified client" as defined by 17 CFR 275.205 - 3(d)(1)(iii); and

3. Otherwise complies with the requirements of this rule.

Notes

15 CSR 30-51.180

AUTHORITY: sections 409.4-401(d), 409.4-402(b)(9), 409.4-403(b)(3), 409.4-404(b)(2), and 409.6-605, RSMo Supp. 2011.* Original rule filed Dec. 28, 2001, effective July 30, 2002. Emergency amendment filed Aug. 27, 2003, effective Sept. 12, 2003, expired March 9, 2004. Amended: Filed Aug. 28, 2003, effective Feb. 29, 2004. Amended: Filed May 26, 2004, effective Nov. 30, 2004. Emergency amendment filed Feb. 2, 2007, effective Feb. 12, 2007, terminated March 5, 2007. Emergency amendment filed Feb. 23, 2007, effective March 5, 2007, expired Aug. 10, 2007. Amended: Filed Feb. 2, 2007, effective July 30, 2007. Amended: Filed April 26, 2012, effective Oct. 30, 2012.

*Original authority: 409.4-401, RSMo 2003; 409.4-402, RSMo 2003; 409.4-403, RSMo 2003; 409.4-404, RSMo 2003; 409.6-605, RSMo 2003.