What is 1A - 1092 Sec Release

This is a release from the Securities and Exchange Commission (SEC) aimed at providing a uniformed explanation on how both federal and state advisors law includes organizations that provide financial services.

The 1A - 1092 Sec Release is a build up on the Investment Advisers Act of 1940 or the Advisers Act enacted by the Congress to provide protection for those who rely on investment advisers for the buying and selling of securities.

Breakdown of 1A-1092 Sec Release

1A-1092 Sec Release is the result of a collaboration that happened in 1987 between the Securities and Exchange Commission (SEC) on the side of the federal government, and the North American Securities Administrators Association (NASAA) on the side of the state government. This collaboration was due to the proliferation of investment advice and financial planning. 1A-1092 was issued by the organizations in 1987.

Some of the definitions of IA (investment advisor) stated in the 1A 770 was reaffirmed in 1A-1092 with some modifications:

First, providers of investment advice include advisors to entertainers and athletes and pension consultants.

Second, in some very unique case organizations recommending investment advisers would be required to register. This does not apply to all situations.

Whether or not an IA engages in investment advice as its major business activity, just by doing this with some regularities in many cases qualifies it for registration as an IA.

In a case whereby a registered representative of a broker-dealer decides to start a separate business to provide investment advice or financial planning for profit, he or she would not benefit from the broker-dealer exemption from registration. This situation is what is known as the statutory investment adviser.

To fall under the definition, compensation does not necessarily involve money, other things like the receipt of products, services, and even discount can be used for compensation.

As regards entertainment or sport agents, individuals that negotiate the contract but refuse to offer investment advice are not seen as investment advisors.

Investment Advisers Act of 1940 and 1A - 1092 Sec Release

The Investment Advisers Act of 1940 explains an investment adviser as anyone who, either indirectly or directly carry out the business of advising others. The Investment Act of 1940 guideline can be found in Title 15 section 80b-1 of the United States Code