No-Action Letter Under
Investment Advisers Act of 1940 - Rule 202(a)(11)-1
Morgan, Lewis & Bockius LLP
November 17, 2005
Investment Advisers Act of 1940 - Rule 202(a)(11)-1 — Applicability to Persons Associated with a Broker-Dealer Exercising Investment Discretion for Related Accounts
Response of the Office of Chief Counsel
Division of Investment Management
Our Ref. No. 20051117137
Morgan, Lewis & Bockius LLP
File 132-3
Your letter dated November 2, 2005, on behalf of your clients, requests that we clarify whether a broker-dealer will be deemed to exercise investment discretion for purposes of rule 202(a)(11)-1 under the Investment Advisers Act of 1940, as a result of the exercise of investment discretion by one of its associated persons over an account (“Related Account”) where the associated person’s discretionary authority stems from his or her serving as executor, conservator, trustee, attorney-in-fact or other agent as a result of a family or personal relationship, and not from employment with the broker-dealer.
Based on the facts and representations in your letter, and without necessarily agreeing with your analysis, we are of the view that a broker-dealer would not be deemed to exercise investment discretion for purposes of rule 202(a)(11)-1 as a result of the exercise of investment discretion over Related Accounts by an associated person of the broker-dealer.1 Our position is based on the facts and representations in your letter. You should note that any different facts or representations may require a different conclusion.
Very truly yours,
Douglas Scheidt
Associate Director and Chief Counsel
1 Cf. Custody of Funds or Securities of Clients by Investment Advisers, Investment Advisers Act Release No. 2176 (Sept. 25, 2003) [68 FR 56692 (Oct. 1, 2003)], at n.15.
Incoming Letter
The Incoming Letter is in Acrobat format.
http://www.sec.gov/divisions/investment/noaction/morganlewis111705.htm
