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Are there individuals that cannot serve as a solicitor on behalf of a registered investment adviser under SEC Rule 206(4)-3?


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Individuals subject to a statutory disqualification under Section 203 of the Investment Advisers Act of 1940 (“Act”) cannot be paid a solicitor referral fee. Such a statutory disqualification would include the following:

  1. An individual barred or suspended by the SEC under Section 203(f) of the Act from associating with an investment adviser;
  2. An individual convicted within the previous ten years of any felony or misdemeanor involving conduct described in Section 203(e)(2)(A) through (D) of the Act;
  3. An individual who has been found by the SEC to have engaged, or has been convicted of engaging, in any of the conduct specified in paragraphs (1), (5) or (6) of Section 203(e) of the Act; or
  4. An individual that is subject to an order, judgment or decree described in Section 203(e)(4) of the Act.

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