Current through September 24, 2024
(1)
Preliminary note. This Rule is a safe harbor and is not intended to specify the
exclusive method for determining who may be deemed a single client for purposes
of T.C.A. §
48-1-102(10)(E)(ii)
and
48-1-102(10)(F)
of the Act.
(2) General. For
purposes of T.C.A. §§
48-1-102(10)(E)(ii)
and
48-1-102(10)(F),
the following are deemed a single client:
(a)
A natural person, and:
1. Any minor child of
the natural person;
2. Any
relative, spouse, or relative of the spouse of the natural person who has the
same principal residence;
3. All
accounts of which the natural person and/or the persons referred to in this
subparagraph (2)(a) are the only primary beneficiaries; or
4. All trusts of which the natural person
and/or the persons referred to in this subparagraph (2)(a) are the only primary
beneficiaries;
(b)
1. A corporation, general partnership,
limited liability company, trust (other than a trust referred to in part
(2)(a)4. of this Rule), or other legal organization (any of which are referred
to hereinafter as a "legal organization") that receives investment advice based
on its investment objectives rather than the individual investment objectives
of its shareholders, partners, limited partner, members, or beneficiaries (any
of which are referred to hereinafter as an "owner"); and
2. Two or more legal organizations referred
to in part (2)(b)1. of this Rule that have identical owners.
(3) Special Rules. For
purposes of this Rule:
(a) An owner must be
counted as a client if the investment adviser provides investment advisory
services to the owner separate and apart from the investment advisory services
provided to the legal organization; provided, however, that the determination
that an owner is a client will not affect the applicability of this
subparagraph (3)(a) with regard to any other owner;
(b) An owner need not be counted as a client
of an investment adviser solely because the investment adviser, on behalf of
the legal organization, offers, promotes, or sells interests in the legal
organization to the owner, or reports periodically to the owners as a group
solely with respect to the performance of or plans for the legal organization's
assets or similar matters;
(c) A
limited partnership is a client of any general partner or other person acting
as investment adviser to the partnership;
(d) Any person for whom an investment adviser
provides investment advisory services without compensation need not be counted
as a client; and
(e) An investment
adviser that has its principal office and place of business outside of the
United States must count only clients that are residents in this state; an
investment adviser that has its principal office and place of business in this
state must count all clients.
(4) Holding Out. Any investment adviser
relying on this Rule shall not be deemed to be holding itself out generally to
the public as an investment adviser, within the meaning of subparagraph (1)(b)
of Rule 0780-04-03-.05, solely because such investment adviser participates in
a non-public offering of interests in a limited partnership under the 1933
Act.
Authority: T.C.A §§
48-1-102,
48-1-115,
48-1-116, §222 of the
Investment Advisers Act of 1940, as amended by §304 of the National
Securities Markets Improvement Act of 1996, and 17 C.F.R.
§275.203(b)(3)-1.
