1987 — Pub. L. 100-181 revised and expanded provisions relating to investment advisory contracts, and changed the structure of the section from a single un written paragraph to a paragraph composed of four subsections bearing points (a) to (d). However, the important realization for consultants is that negative consent is in principle allowed under a contract. The SEC confirmed this view with a series of no-action letters from the 1980s, which were later confirmed in other no-action letters from the 1990s. The General Staff did not previously grant Franklin Templeton Group of Funds measures in the opposite situation: the Fund attempted to unbundl a combined board and board agreement without obtaining shareholder approval on the basis of certain insurances.1 To Franklin Templeton and in this situation, the proposed amendments would indicate the nature or level of advisory or management services, which are provided to the Fund, do not diminish or change in any way. and the aggregate rate of advisory and management fees to be paid by the Fund would not exceed the aggregate royalty rate to be paid by the Fund in accordance with its existing agreements. At Franklin Templeton and in this situation, the funds asserted that the contract amendment described above should not require shareholder approval, as shareholders would not be disadvantaged by the amendment and obtaining shareholder approval would not serve any useful purpose and would result in unnecessary costs. The inclusion of appropriate provisions on the granting of negative consent in advisory contracts will help to prepare an advisory practice for a smooth transition in the event of a possible acquisition or merger. Such arrangements must also be taken into account when developing a viable continuity or succession plan, since obtaining positive consent from the client is often easier said than done when the plan is actually to be executed.
As the saying goes, “It is easier to ask for forgiveness than to ask permission.” Section 203(b) of the Consultants Act provides for five limited exceptions to registration. Section 203(b)(1) exempts any advisor whose clients are all in the same state as the advisor`s principal office and (2) who does not provide advice or reporting on securities listed on a national stock exchange. Section 203(b)(2) exempts consultants whose only clients are insurance companies. Section 203(b)(3) releases any advisor who: (1) has had fewer than fifteen clients in the last twelve months; (2) does not express itself generally to the public as an investment advisor; and (3) is not an investment advisor to a registered investment firm or business development company. Rule 203 (b) (3) -1 of the Consultants Act contains guidelines for counting clients when determining the authorization of this exemption. In determining whether a person or company is acting as an investment adviser within the meaning of Article 203(b)(3), the Department takes into account a number of factors, including, for example, whether the person or undertaking advertises; qualifies as an “investment advisor”; maintains a listing as an investment advisor in a telephone, commercial, real estate or other directory; expresses its willingness to welcome new advisory clients; or uses a letterhead indicating investment advisory activity. Section 203(b)(4) generally exempts any advisor who is (1) a not-for-profit organization or is employed by a non-profit organization and (2) provides advice, analysis or reporting only to non-profit organizations or non-profit funds. § 203 (b) (5) exempts advisers from ecclesiastical pension schemes. 1970 — Pub.
L. 91-547 replaced the reference to section “80b-3 (b)” with “80b-3 (b)” of that title in the first sentence, renamed the second sentence of the old third sentence, the existing provisions being called cl. . . .