(a) Definitions. Words and terms used in this chapter are also defined in §107.2 of this title (relating to Definitions). The following words and terms, when used in this chapter, shall have the following meanings unless the context clearly indicates otherwise.
  (1) Applicant--A person who submits an application for registration as an investment adviser or an investment adviser representative.
  (2) Branch office--Any location where one or more representatives of an investment adviser regularly conduct investment advisory services or that is held out as such.
    (A) This definition excludes:
      (i) any location that is established solely for customer service and/or back office type functions where no advisory services are conducted and that is not held out to the public as a branch office;
      (ii) any location that is the investment adviser representative's primary residence, provided that:
        (I) only one investment adviser representative, or multiple representatives who reside at that location and are members of the same immediate family, conduct business at the location;
        (II) the location is not held out to the public as an office and the investment adviser representative does not meet with customers at the location;
        (III) neither customer funds nor securities are handled at that location;
        (IV) the investment adviser representative is assigned to a designated branch office, and such designated branch office is reflected on all business cards, stationery, advertisements, and other communications to the public by such representative;
        (V) the investment adviser representative's correspondence and communications with the public are subject to the investment adviser's supervision;
        (VI) electronic communications (e.g., e-mail) are made through the investment adviser's electronic system;
        (VII) all orders are entered through the designated branch office or an electronic system established by the investment adviser that is reviewable at the branch office;
        (VIII) written supervisory procedures pertaining to supervision of investment advisory services conducted at the residence are maintained by the investment adviser; and
        (IX) a list of the residence locations are maintained by the investment adviser;
      (iii) any location, other than a primary residence, that is used for investment advisory services for less than 30 business days in any one calendar year, provided the investment adviser complies with the provisions of clause (ii)(II) - (VIII) of this subparagraph;
      (iv) any office of convenience, where investment adviser representatives occasionally and exclusively by appointment meet with customers, which is not held out to the public as an office;
      (v) any location that is used primarily to engage in non-securities activities and from which the investment adviser representative(s) effects no more than 25 investment advisory services in any one calendar year; provided that any advertisement or sales literature identifying such location also sets forth the address and telephone number of the location from which the representative(s) conducting business at the non-branch locations are directly supervised; and
      (vi) a temporary location established in response to the implementation of a business continuity plan.
    (B) Notwithstanding the exclusions in subparagraph (A) of this paragraph, any location that is responsible for supervising the activities of persons associated with the investment adviser at one or more non-branch locations of the investment adviser is considered to be a branch office.
    (C) The term "business day" shall not include any partial business day provided that the investment adviser representative spends at least four hours on such business day at his or her designated branch office during the hours that such office is normally open for business.
  (3) Supervisor--The person named by the investment adviser to supervise the activities of a branch office and registered as an investment adviser representative.
  (4) Control--The possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person or company, whether through the ownership of voting securities, by contract, or otherwise.
  (5) In this state--
    (A) A person renders services as an investment adviser "in this state" as set out in the Texas Securities Act, §12.B, if either the person or the person's agent is present in this state or the client/customer or the client/customer's agent is present in this state at the time of the particular activity. A person can be an investment adviser in more than one state at the same time.
    (B) Likewise, a person renders services as an investment adviser representative "in this state" as set out in the Texas Securities Act, §12.B, whether by direct act or through subagents except as otherwise provided, if either the person or the person's agent is present in this state or the client/customer or the client/customer's agent is present in this state at the time of the particular activity. A person can be an investment adviser representative in more than one state at the same time.
    (C) Rendering services as an investment adviser or as an investment adviser representative can be made by personal contact, mail, telegram, telephone, wireless, electronic communication, or any other form of oral or written communication.
  (6) Investment adviser--A person who, for compensation, engages in the business of advising others, either directly or through publications or writings, with respect to the value of securities or to the advisability of investing in, purchasing, or selling securities or a person who, for compensation and as part of a regular business, issues or adopts analyses or a report concerning securities. The term does not include:
    (A) a bank or a bank holding company, as defined by the Bank Holding Company Act of 1956 (12 U.S.C. §1841 et seq.), as amended, that is not an investment company;
    (B) a lawyer, accountant, engineer, teacher, or geologist whose performance of the services is solely incidental to the practice of the person's profession;
    (C) a dealer or agent who receives no special compensation for those services and whose performance of those services is solely incidental to transacting business as a dealer or agent;
    (D) the publisher of a bona fide newspaper, news magazine, or business or financial publication of general and regular circulation; or
    (E) a person whose advice, analyses, or report does not concern a security other than a security that is:
      (i) a direct obligation of or an obligation the principal or interest of which is guaranteed by the United States government, or
      (ii) issued or guaranteed by a corporation in which the United States has a direct or indirect interest and designated by the United States Secretary of the Treasury under Securities Exchange Act of 1934, §3(a)(12), (15 U.S.C. §78c(a)(12)), as amended, as an exempt security for purposes of that Act.
  (7) Investment adviser representative or representative of an investment adviser--Each person or company who, for compensation, is employed, appointed, or authorized by an investment adviser to solicit clients for the investment adviser or who, on behalf of an investment adviser, provides investment advice, directly or through subagents, to the investment adviser's clients. The term does not include a partner of a partnership or an officer of a corporation or other entity that is registered as an investment adviser under the Texas Securities Act solely because of the person's status as an officer or partner of that entity.
  (8) Rendering services as an investment adviser--Any act by which investment advisory services are provided for compensation.
  (9) Solicitor--Any investment adviser or investment adviser representative who limits their activities to referring potential clients to an investment adviser for compensation.
  (10) Federal covered investment adviser--An investment adviser who is registered under the Investment Advisers Act of 1940 (15 U.S.C. §80b-1 et seq.), as amended. A federal covered investment adviser is not required to be registered pursuant to the Texas Securities Act.
  (11) Registered investment adviser--An investment adviser who has been issued a registration certificate by the Securities Commissioner under the Texas Securities Act, §15. (A federal covered investment adviser is not prohibited from being registered with the Securities Commissioner. If a federal covered investment adviser elects to register with the Securities Commissioner, it is subject to all of the registration requirements of the Act.)
Cont'd...