Arizona Administrative Code › Title 14 - PUBLIC SERVICE CORPORATIONS; CORPORATIONS AND ASSOCIATIONS; SECURITIES REGULATION › Chapter 6 - Corporation Commission - Investment Management › Article 1 - GENERAL PROVISIONS RELATING TO THE ARIZONA INVESTMENT MANAGEMENT ACT › Section R14-6-101 - Definitions

Current through Register Vol. 30, No. 28, July 12, 2024
A. The definitions set forth in A.R.S. §§
									44-1801
				  and
				  44-3101
				  shall apply to the rules promulgated under A.R.S. Title 44, Chapter 13.
B. The following definitions shall apply to all rules
				  promulgated under A.R.S. Title 44, Chapter 13, unless the context otherwise
				  requires:
1. "Advertisement" means, except as set forth in subsections
				  (B)(1)(d) and (e), any notice, circular, letter, or other written, oral, or
				  electronically generated communication addressed to or reasonably designed by
				  the investment adviser or investment adviser representative to be accessed by
				  more than one person, or any notice or other announcement in any publication or
				  by radio or television, that directly or indirectly offers:
a. Any analysis, report, or publication that either concerns
				  securities, or is to be used in making any determination as to when to buy or
				  sell any security or which security to buy or sell; or
b. Any graph, chart, formula, or other device to be used in
				  making any determination as to when to buy or sell any security, or which
				  security to buy or sell; or
c. Any other investment advisory service with regard to
				  securities.
d. A communication over a computer online service including
				  but not limited to an electronic bulletin board shall not be deemed to be an
				  advertisement when an investment adviser or an investment adviser
				  representative is either:
i. Engaged in a discussion regarding securities and does not
				  receive compensation from any person for the discussion; or
ii. Responds to unsolicited inquiries regarding the provision
				  of investment advisory services.
e. A communication by one or more investment advisers or
				  investment adviser representatives shall not be deemed to be an advertisement
				  when the communication is addressed solely to or is reasonably designed to be
				  accessed solely by other investment advisers or investment adviser
				  representatives.
2. "Certified public accountant" or "CPA" means an accountant
				  who has been registered or licensed to practice public accounting and is
				  permitted to use the title "certified public accountant" and to use the
				  initials "CPA" after the accountant's name.
3. "Custody" means holding, directly or indirectly, client
				  funds or securities, or having any authority to obtain possession of them.
				  Custody includes:
a. Possession of client funds or securities (but not of
				  checks drawn by clients and made payable to third parties), unless received
				  inadvertently and returned to the sender promptly, but in any case within three
				  business days of receiving them;
b. Any arrangement (including a general power of attorney)
				  under which the investment adviser is authorized or permitted to withdraw
				  client funds or securities maintained with a custodian upon the investment
				  adviser's instruction to the custodian; and
c. Any capacity (such as general partner of a limited
				  partnership, managing member of a limited liability company or a comparable
				  position for another type of pooled investment vehicle, or trustee of a trust)
				  that gives the investment adviser or the investment adviser representative
				  legal ownership of or access to client funds or securities.
4. "Federal covered adviser" means an investment adviser
				  registered under the Investment Advisers Act of 1940.
5. "Fixed fee basis" means an investment advisory fee that at
				  any given time can be precisely established in a dollar amount without regard
				  to the investment performance or value of an account and that is not based on
				  the purchase or sale of specific securities.
6. "Form ADV" means the Uniform Application for Investment
				  Adviser Registration,
				  17
				  CFR 279.1, as required by A.R.S. §
									44-3153.
7. "IM Act" means the Arizona Investment Management Act,
				  A.R.S. §
									44-3101 et
				  seq.
8. "Impersonal advisory services" means investment advisory
				  services provided solely:
a. By means of written material or oral statements that do
				  not purport to meet the objectives or needs of specific individuals or
				  accounts;
b. Through the issuance of statistical information containing
				  no expression of opinion as to the investment merits of a particular security;
				  or
c. Any combination of the foregoing services.
9. "Independent representative" means a person that:
a. Acts as agent for a client, including in the case of a
				  pooled investment vehicle, for limited partners of a limited partnership (or
				  members of a limited liability company, or other beneficial owners of another
				  type of pooled investment vehicle) and by law or contract is obliged to act in
				  the best interest of the advisory client or the limited partners (or members,
				  or other beneficial owners);
b. Does not control, is not controlled by, and is not under
				  common control with the investment adviser; and
c. Does not have, and has not had within the past two years,
				  a material business relationship with the investment adviser.
10. "Internet" means all proprietary or common carrier
				  electronic systems, or similar media.
11. "Internet communication" means the distribution of
				  information on the Internet.
12. "Investment-related" means pertaining to securities,
				  commodities, banking, insurance, or real estate, including but not limited to
				  acting as or being associated with a broker-dealer, investment company,
				  investment adviser, government securities broker or dealer, municipal
				  securities dealer, bank, savings and loan association, entity, or person
				  required to be registered under the Commodity Exchange Act, or a
				  fiduciary.
13. "Involved" means acting or aiding, abetting, causing,
				  counseling, commanding, inducing, conspiring with, or failing reasonably to
				  supervise another in doing an act.
14. "Management person" means a person with power to
				  exercise, directly or indirectly, a controlling influence over the management
				  or policies of an investment adviser that is a company or to determine the
				  general investment advice given to clients.
15. "NASAA" means the North American Securities
				  Administrators Association, Inc., or any successor organization.
16. "NASD" means the National Association of Securities
				  Dealers, Inc., or any successor or subsidiary organization.
17. "Qualified custodian" means:
a. A bank or a savings association that has deposits insured
				  by the Federal Deposit Insurance Corporation under the Federal Deposit
				  Insurance Act;
b. A broker or dealer registered under Section 15(b)(1) of
				  the Securities Exchange Act of 1934, holding the client assets in customer
				  accounts;
c. A futures commission merchant registered under Section
				  4f(a) of the Commodity Exchange Act, holding the client assets in customer
				  accounts, but only with respect to clients' funds and security futures, or
				  other securities incidental to transactions in contracts for the purchase or
				  sale of a commodity for future delivery and options thereon; and
d. A foreign financial institution that customarily holds
				  financial assets for its customers, provided that the foreign financial
				  institution keeps the clients' assets in customer accounts segregated from its
				  proprietary assets.
18. "Relative" means any relationship by blood, marriage, or
				  adoption, not more remote than 1st cousin.
19. "Rule 204-2" means United States Securities and Exchange
				  Commission rule 204-2, 17 CFR 275.204 - 2(1998), which is incorporated by
				  reference, does not contain any later amendments or editions, and is on file in
				  the Office of the Secretary of State. Copies of Rule 204-2 are available from
				  the Division and from the Superintendent of Documents, Government Printing
				  Office, Washington, D.C. 20402.
20. "SEC" means United States Securities and Exchange
				  Commission.
21. "Securities Act" means the Securities Act of Arizona,
				  A.R.S. §
									44-1801
				  et seq.
22. "Self-regulatory organization" or "SRO" means any
				  national securities or commodities exchange, registered association, or
				  registered clearing agency.
23. "Unincorporated organization" includes a limited
				  liability company for purposes of the definition of "person," as defined in
				  A.R.S. §
									44-1801.
24. "Wrap fee program" means a program under which any client
				  is charged a specified fee or fees not based directly upon transactions in a
				  client's account for investment advisory services, which may include portfolio
				  management or advice concerning the selection of other investment advisers, and
				  execution of client transactions.