SEC Release IA-1092
SEC Release IA-1092 is a release from the Securities & Exchange Commission (SEC) that provides uniform interpretations of how state and federal adviser laws apply to those that provide financial services. The act reaffirmed the definition of an investment adviser (IA) as described in SEC Release IA-770 and added some refinements: First, pension consultants and advisers to athletes and entertainers were included as providers of investment advice. Second, in some cases, firms that recommend investment advisers also had to register themselves. SEC Release IA-1092 builds on the Investment Advisers Act of 1940 or the Advisers Act that Congress enacted to protect persons who rely on investment advisers for advice on purchasing and selling securities. Guidelines for the Investment Advisers Act of 1940 can be found in Title 15 section 80b-1 of the United States Code, which notes that investment advisers are of national concern, due to: Their advice, counsel, publications, writings, analyses, and reports being in line with interstate commerce. The Investment Advisers Act of 1940 defines an investment adviser as any person who, either directly or indirectly through writings, engages in the business of advising others on the value or profitability of securities and receives compensation for this.
What Is SEC Release IA-1092?
SEC Release IA-1092 is a release from the Securities & Exchange Commission (SEC) that provides uniform interpretations of how state and federal adviser laws apply to those that provide financial services.
SEC Release IA-1092 builds on the Investment Advisers Act of 1940 or the Advisers Act that Congress enacted to protect persons who rely on investment advisers for advice on purchasing and selling securities.
Understanding SEC Release IA-1092
SEC Release IA-1092 is the result of a 1987 collaboration between the Securities & Exchange Commission (SEC) on the federal side and the North American Securities Administrators Association (NASAA) on the state side.
These organizations issued IA-1092 in 1987 as a memo in response to the proliferation of financial planning and investment advice professionals in the 1980s. The act reaffirmed the definition of an investment adviser (IA) as described in SEC Release IA-770 and added some refinements:
With regard to sports or entertainment agents, those individuals that negotiated contracts but did not render investment advice were excluded from the definition of an investment adviser.
SEC Release IA-1092 and the Investment Advisers Act of 1940
The Investment Advisers Act of 1940 defines an investment adviser as any person who, either directly or indirectly through writings, engages in the business of advising others on the value or profitability of securities and receives compensation for this.
Guidelines for the Investment Advisers Act of 1940 can be found in Title 15 section 80b-1 of the United States Code, which notes that investment advisers are of national concern, due to:
Related terms:
Broker-Dealer
The term broker-dealer is used in U.S. securities regulation parlance to describe stock brokerages because the majority of the companies act as both agents and principals. read more
Covered Security
A covered security is a type of security that receives federal exemptions from state regulations. read more
Investment Advisers Act of 1940
The Investment Advisers Act of 1940 is a U.S. federal law that defines the role and responsibilities of an investment advisor/adviser. read more
Investment Advisor
An investment advisor is any person or group that makes investment recommendations or conducts securities analysis in return for a fee. read more
Investment Company Act of 1940
Created by Congress, the Investment Company Act of 1940 regulates the organization of investment companies and the product offerings they issue. read more
North American Securities Administrators Association (NASAA)
The North American Securities Administrators Association (NASAA) is an organization of securities regulators whose aim is to protect investors from fraud. read more
Notice Filing
A notice filing is information about an investment advisor's education and business they may be required to submit to state securities authorities. read more
National Securities Markets Improvement Act (NSMIA)
The National Securities Markets Improvement Act is a law passed in 1996 to simplify U.S. securities regulation by apportioning more regulatory power. read more
Over-The-Counter (OTC)
Over-The-Counter (OTC) trades refer to securities transacted via a dealer network as opposed to on a centralized exchange such as the New York Stock Exchange (NYSE). read more
SEC Form 17-H
SEC Form 17-H is a risk-assessment report that all large broker-dealers must file with the Securities and Exchange Commission. read more