New Mexico Administrative Code › Title 12 - TRADE, COMMERCE AND BANKING › Chapter 11 - SECURITIES › Part 7 - INVESTMENT ADVISERS AND INVESTMENT ADVISER REPRESENTATIVES RULES OF CONDUCT AND PROHIBITED BUSINESS PRACTICES › Section 12.11.7.13 - PROHIBITED BUSINESS PRACTICES BY INVESTMENT ADVISERS

Current through Register Vol. 35, No. 13, July 16, 2024
The following are deemed to be unlawful, unethical, or
				  dishonest conduct or practice by an investment adviser or investment adviser
				  representative without limiting those terms to the practices specified
				  herein:
A. recommending to a client to
				whom investment supervisory, management or consulting services are provided the
				purchase, sale or exchange of any security without reasonable grounds to
				believe that the recommendation is suitable for the client on the basis of
				information furnished by the client after reasonable inquiry concerning the
				client's investment objectives, financial situation and needs, and any other
				information known by the investment adviser;
B. exercising any discretionary power in
				placing an order for the purchase or sale of securities for a client without
				obtaining written discretionary authority from the client within ten business
				days after the date of the first transaction placed pursuant to oral
				discretionary authority, unless the discretionary power relates solely to the
				price at which, or the time when, an order involving a definite amount of a
				specific security shall be executed, or both;
C. inducing trading in a client's account
				that is excessive in size or frequency in view of the financial resources,
				investment objectives and character of the account;
D. placing an order to purchase or sell a
				security for the account of a client without authority to do so;
E. placing an order to purchase or sell a
				security for the account of a client upon instruction of a third party without
				first having obtained a written third-party trading authorization from the
				client;
F. borrowing money or
				securities from a client unless the client is a broker-dealer, an affiliate of
				the investment adviser, or a depository institution engaged in the business of
				loaning funds;
G. loaning money to
				a client unless the investment adviser is a depository institution engaged in
				the business of loaning funds or the client is an affiliate of the investment
				adviser;
H. misrepresenting to any
				advisory client, or prospective advisory client, the qualifications of the
				investment adviser or any employee of the investment adviser, or to
				misrepresent the nature of the advisory services being offered or fees to be
				charged for such service, or to omit to state a material fact necessary to make
				the statements made regarding qualifications, services or fees, in light of the
				circumstances under which they are made, not misleading;
I. providing a report or recommendation to
				any advisory client prepared by someone other than the investment adviser
				without disclosing that fact; this prohibition does not apply to a situation
				where the adviser uses published research reports or statistical analyses to
				render advice or where an adviser orders such a report in the normal course of
				providing service;
J. charging a
				client an unreasonable advisory fee;
K. failing to disclose to clients in writing
				before any advice is rendered any material conflict of interest relating to the
				investment adviser or any of its employees which could reasonably be expected
				to impair the rendering of unbiased and objective advice including:
(1) compensation arrangements connected with
				advisory services to clients which are in addition to compensation from such
				clients for such services; and
(2)
				charging a client an advisory fee for rendering advice when a commission for
				executing securities transactions pursuant to such advice will be received by
				the investment adviser or its employees;