Authority: IC 23-19-6-5

Affected: IC 23-19

Sec. 9. (a) An investment adviser shall furnish each advisory client and prospective advisory client with a written disclosure statement, which may be either a copy of Part II of Form ADV or a written document containing at least the information required by Part II of Form ADV.

(b) Except as provided in this section, an investment adviser shall deliver the statement required by this section to an advisory client or prospective advisory client:

1. (1) not less than forty-eight (48) hours before entering into any written or oral investment advisory contract with the client; or
2. (2) at the time of entering into any the contract, if the advisory client has a right to terminate the contract without penalty within five (5) business days after entering into the contract.

(c) Delivery of the statement required by subsection (a) need not be made in connection with entering into:

1. (1) an investment company contract; or
2. (2) a contract for impersonal advisory services, as defined in this section.

(d) Notwithstanding the provisions of this section, an investment adviser shall not be required to give a five (5) day right to terminate a transaction for the purchase or sale of securities, provided that, as follows:

1. (1) The investment adviser is also registered as a broker-dealer or agent under IC 23-19.
2. (2) The contract relates to the purchase or sale of a security.
3. (3) The provision of advisory services is incidental to the investment adviser's business as a broker-dealer or agent, and no special investment adviser compensation is received for the services.
4. (4) The disclosure is provided to the client or prospective client at or before the time the client makes the purchase or sale.

(e) An investment adviser shall annually, without charge, deliver or offer in writing to deliver upon written request to each of its advisory clients the statement required under this section.

(f) The delivery or offer required by subsection (e) need not be made to advisory clients receiving advisory services solely under either of the following:

1. (1) An investment company contract.
2. (2) A contract for impersonal advisory services requiring a payment of less than two hundred dollars ($200).

(g) With respect to an advisory client entering into a contract or receiving advisory services under a contract for impersonal advisory services that requires a payment of two hundred dollars ($200) or more, an offer of the type specified in subsection (e) shall also be made at the time of entering into an advisory contract.

(h) Any statement requested under this section in writing by an advisory client must be mailed or delivered within seven (7) days of receipt of the request.

(i) If an investment adviser renders substantially different types of investment advisory services to different advisory clients, information required by Part II of Form ADV may be omitted from the statement furnished to an advisory client or prospective advisory client if the information is applicable only to a type of investment advisory service or fee that is not rendered or charged, or proposed to be rendered or charged, to that client or prospective client.

(j) Nothing in this section shall relieve any investment adviser from any obligation under any provision of IC 23-19 or other federal or state law to disclose any information to its advisory clients or prospective advisory clients not specifically required by this section.

(k) As used in this section, "contract for impersonal advisory services" means any contract relating solely to the provisions of investment advisory services:

1. (1) by means of written material or oral statements that do not purport to meet the objectives or needs of specific individuals or accounts;
2. (2) through the issuance of statistical information containing no expression of opinion as to the investment merits of a particular security; or
3. (3) by or through any combination of the services required under subdivisions (1) and (2).

(l) As used in this section, "entering into", in reference to an investment advisory contract, does not include an extension or renewal without material change of any the contract that is in effect immediately prior to the extension or renewal.

(m) As used in this section, "investment company contract" means a contract with an investment company registered under the Investment Company Act of 1940 that meets the requirements of Section 15 of that Act (15 U.S.C. 80a-15).

(Securities Division; 710 IAC 4-9-9; filed Jun 28, 2010, 2:36 p.m.: 20100728-IR-710100044FRA; readopted filed May 12, 2016, 1:47 p.m.: 20160608-IR-710160136RFA; readopted filed Nov 30, 2022, 4:01 p.m.: 20221228-IR-710220301RFA)