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Indiana Code Title 23. Business and Other Associations § 23-19-4-13

Current as of January 02, 2024 | Updated by Findlaw Staff

Sec. 13. (a) For purposes of this section, “adviser” refers to any of the following:

(1) An investment adviser.

(2) A federal covered investment adviser.

(3) An investment adviser representative.

(b) A third party solicitor shall provide a copy of the third party solicitor's written disclosure document to a client at the time a solicitation is made.

(c) A third party solicitor's written disclosure document must include the following:

(1) The names of the third party solicitor and the adviser who have entered into an agreement for solicitation services.

(2) The nature of the relationship between the third party solicitor and the adviser, including any affiliation.

(3) A statement that the adviser will compensate the third party solicitor for solicitation services.

(4) A statement that the adviser will charge the client for:

(A) the solicitation services;  and

(B) the adviser's fee.

(5) The amount of any difference in the adviser's fee if:

(A) the client is charged an adviser's fee that is greater than the adviser's fee charged to other clients;  and

(B) the difference is attributable to the third party solicitor and the adviser's arrangement for solicitation services.

(d) Except as provided in subsection (e), an adviser who is employed by or associated with an investment adviser shall not, directly or indirectly, compensate a third party solicitor for solicitation services performed in Indiana.

(e) An adviser may compensate a third party solicitor for solicitation services performed in Indiana if all of the following apply:

(1) The adviser is properly registered with the division or exempted from registration under this article.

(2) The adviser receives from the client, before entering into an investment advisory contract, a signed and dated acknowledgment that the client received:

(A) a Form ADV Part II, or any successor brochure form required to be filed under:

(i) 17 CFR 203-1(a);  or

(ii) rules promulgated under this article;  or

a written disclosure statement including all the information required by a Form ADV Part II;  and

(B) the third party solicitor's written disclosure document.

(3) The adviser makes a good faith effort to ascertain whether the third party solicitor complies with the written agreement.

(4) The adviser has a reasonable basis for believing that the third party solicitor has complied with the written agreement.

(5) The third party solicitor is compensated under a written agreement that the adviser is a party to.

(6) The third party solicitor is not the subject of an order listed by IC 23-19-4-12(d)(5).

(7) The adviser and the third party solicitor have entered into a written agreement that:

(A) describes the third party solicitor's:

(i) services on behalf of the adviser;  and

(ii) compensation for the services;

(B) contains the third party solicitor's agreement to perform the third party solicitor's duties consistent with:

(i) the adviser's instructions;  and

(ii) this article;  and

(C) requires the third party solicitor, when performing solicitation services described in the agreement, to provide the client with:

(i) a current copy of the adviser's Form ADV Part II, or any successor form;  and

(ii) a copy of the third party solicitor's written disclosure document.

(f) This section does not relieve an adviser of any fiduciary or other obligations under any law.

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Cite this article: FindLaw.com - Indiana Code Title 23. Business and Other Associations § 23-19-4-13 - last updated January 02, 2024 | https://codes.findlaw.com/in/title-23-business-and-other-associations/in-code-sect-23-19-4-13/

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