- (1) as to securities for which market quotations are readily available within the meaning of Rule 2a-4(a)(1) under the Investment Company Act of 1940, 17 CFR 270.2a-4(a)(1) (2020), the formula must include the realized capital losses and unrealized capital depreciation of the securities over the period;
(2) as to securities for which market quotations are not readily available within the meaning of Rule 2a-4(a)(1) under the Investment Company Act of 1940 the formula must include:
- (a) the realized capital losses of securities over the period; and
- (b) if the unrealized capital appreciation of the securities over the period is included, the unrealized capital depreciation of the securities over the period; and
- (3) the formula must provide that any compensation paid to the investment adviser under this rule is based on the gains less the losses, computed in accordance with Subsections R164-2-6(1) and R164-2-6(2), in the client's account for a period of not less than one year.
The compensation paid to an investment adviser for the performance of any securities over a given period must be based on a formula with the following characteristics:
KEY: securities, securities regulation, investment advisers, custody requirements
Date of Last Change: March 11, 2022
Notice of Continuation: December 18, 2024
Authorizing, and Implemented or Interpreted Law: 61-1-2; 61-1-24